Ribbon Finance Archives - Crypto Insider https://cryptoinsider.asia/post_tag/ribbon-finance/ Crypto and Blockchain News Thu, 06 Oct 2022 09:06:18 +0000 en-US hourly 1 https://wordpress.org/?v=6.7.1 https://cryptoinsider.asia/wp-content/uploads/2021/11/cryptocurrency-icon.png Ribbon Finance Archives - Crypto Insider https://cryptoinsider.asia/post_tag/ribbon-finance/ 32 32 199368904 DeFi Platform Ribbon Finance’s Unsecured Lending Product Sees Crypto Firms Folkvang and Wintermute Borrow Over $10M https://cryptoinsider.asia/defi-platform-ribbon-finances-unsecured-lending-product-sees-crypto-firms-folkvang-and-wintermute-borrow-over-10m/ Thu, 06 Oct 2022 09:06:18 +0000 https://cryptoinsider.asia/defi-platform-ribbon-finances-unsecured-lending-product-sees-crypto-firms-folkvang-and-wintermute-borrow-over-10m @ Crypto Insider

Ribbon’s Lend, which went live on Monday, allows institutions to borrow funds without having to…

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Ribbon’s Lend, which went live on Monday, allows institutions to borrow funds without having to lock in collateral.

Unless you have been underwater for months, you have probably heard that adverse macroeconomic conditions have made crypto market participants risk averse.

However, the early activity in the Ethereum-based structured product firm Ribbon Finance’s recently launched high-stakes lending product, Lend, suggests otherwise.

Ribbon’s Lend, which went live on Monday, allows depositors to lend unsecured funds to institutional market makers of their choosing with high liquidity.

The protocol has seen users deposit 15 million USDC, the U.S. dollar-pegged stablecoin. Of that, more than 10 million USDC has been borrowed by Alameda-backed quant trading firm Folkvang Trading and market maker Wintermute, which recently lost $160 million in a hack.

“We see that there is still demand in decentralized finance for high yields. Users are willing to move out the risk curve if the risk-reward makes sense,” Julian Koh, co-founder and CEO of Ribbon, told CoinDesk.

“Undercollateralized lending to reputable institutional trading firms seems to fit that category well.”

At press time, the annualized percentage return for loaning out USDC to Folkvang and Wintermute was nearly 7%. That’s significantly greater than the 0.5% available on top decentralized platforms like Aave and Compound.

Uncollateralized Aave

Ribbon describes Lend as “an uncollateralized Aave, offering best of both traditional finance and decentralized finance.”

An institution can borrow USDC from AAVE at a much lower cost but at the expense of locking another cryptocurrency as collateral. In other words, the borrower stands to lose the liquidity of the collateral locked, which isn’t the case with Ribbon’s Lend.

Meanwhile, Lend users stand to make higher yields from unsecured lending to institutions that have been evaluated for their creditworthiness by Credora. Besides, lenders can exit their positions at any time, subject to availability of liquidity in the pool. According to Ribbon, most unsecured lending in Decentralized Finance (DeFi) is for the fixed term, meaning lenders cannot withdraw deposits until the loan maturity. DeFi is a term used to describe financial activities carried out on a blockchain without the help of intermediaries.

“Borrowing through Ribbon is more capital efficient,” Folkvang’s CIO Jeff Anderson said. “With the advent of Lend, Ribbon now offers a one-stop shop for the full DeFi product suite and we are proud to be pioneers on the platform.”

“Borrowing through Ribbon is more capital efficient,” Folkvang’s CIO Jeff Anderson said. “With the advent of Lend, Ribbon now offers a one-stop shop for the full DeFi product suite and we are proud to be pioneers on the platform.”

Ribbon recently launched a crypto options exchange Aevo, having pioneered the concept of decentralized options vault (DOV) in 2021. The DOVs have simplified options trading, whereby investors simply stake their assets in vaults which deploy those in yield-generating option strategies.

Ribbon’s foray into unsecured lending perhaps indicates the sector dominated by the likes of Maple Finance, Clearpool and TrueFi, is heating up. A recent Reuters report cited TrueFi putting the total value of the unsecured lending market at $25 billion. Further, a Reuters survey of 11 lenders showed willingness to continue with unsecured lending despite the broader market meltdown.

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Ethereum Project Ribbon Finance Launches Crypto Options Exchange to Boost Growth https://cryptoinsider.asia/ethereum-project-ribbon-finance-launches-crypto-options-exchange-to-boost-growth/ Wed, 28 Sep 2022 10:15:26 +0000 https://cryptoinsider.asia/ethereum-project-ribbon-finance-launches-crypto-options-exchange-to-boost-growth @ Crypto Insider

Ribbon said it expects trading volumes to reach over $100 million a day within the…

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Ribbon said it expects trading volumes to reach over $100 million a day within the first six months.

SINGAPORE – Decentralized finance (DeFi) protocol Ribbon Finance, known for its on-chain structured products, said it is launching an options exchange to boost demand for its services among savvy crypto traders.

Announced at Token 2049 in Singapore, Aevo will allow users to initially trade ether (ETH) options, with plans to launch options for bitcoin (BTC) and other tokens in the coming months.

Ribbon founder Julian Koh said he expected the options exchange to see over $100 million in daily trading volume in the next few months, adding that the Ethereum ecosystem had “gained momentum” after the Merge event earlier this month.

“With the majority of TVL in our platform coming from the Ethereum ecosystem, we have always regarded it as our home ground, and have strategically launched Aevo while the Ethereum network continues to build momentum after the Merge,” Koh told CoinDesk, using an acronym for total value locked, or the amount of crypto tied up in DeFi projects.

Ribbon locked over $75 million worth of various cryptocurrencies as of Wednesday. At its peak, in May, It held over $300 million, though the value of assets held on its platform fell as the broader market declined.

Ribbon is known in crypto circles for its Decentralized Option Vaults (DOV) product, which allows users to generate yield through different strategies that involve financial instruments such as options, derivatives and other fixed-rate crypto products.

The DOV for USD Coin (USDC) on Ribbon pays some 25% in annual yields to users, compared with rates of less than 4% on lending protocols like Aave or Compound.

Crypto options trading has been a rare bright spot in the bear market, building momentum even as crypto prices have plunged, as previously reported. Some $10 billion worth of options products has been traded so far in September, data show.

Earlier this year, fund manager Darius Sit of QCP Capital called options trading the next growth driver in the crypto sector, explaining at the time that such products were much more familiar to institutional investors and that they were much more likely to use options rather than niche DeFi products to trade cryptocurrencies.

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