Before Decentralized finance (DeFi), the traditional banking system was and is still controlled by a centralized authority, from transactions to loans to stock prices.
With Decentralized finance (DeFi), the banking system became more flexible, allowing people to lend and borrow money without much hassle. Although decentralized finance (DeFi) is not entirely risk-free, it is more competent than the traditional banking system. HypaSwap (HYPA), one of the DeFi platforms built on the Ethereum (ETH) blockchain, allows users to exchange assets through a liquidity pool.
This exchange involves two parties; the lenders, who lend their assets to the HypaSwap (HYPA) and earn an interest rate for locking their assets, and the borrowers, who borrow from the liquidity pool in exchange for collaterals.
How does HypaSwap (HYPA) work?
HypaSwap (HYPA) aims to establish a strong market position and bring DeFi to every corner of the world. As a decentralized liquidity protocol, the main features of the HypaSwap (HYPA) protocol, as earlier mentioned, are lending and borrowing.
Users lend their assets to the HypaSwap (HYPA) protocol to create a liquidity pool consisting of cryptocurrencies. A derivative is created upon the deposited amount on a 1:1 valuation. Once the token is sold from the liquidity pool, the ownership is transferred to the owner of the derivative token.
Lenders earn interest rates and HypaSwap (HYPA) incentives. When a borrower pays off their loan with the given interest rate, the amount is distributed among all the lenders whose money was involved, and they get a share of the interest rate.
However, if the borrower fails to pay, the collateral is liquidated to pay off the lenders. Since lending keeps the protocol buoyant, lenders are also incentivized with HypaSwap (HYPA) incentives to keep lending and lock in their assets for extended periods.
Borrowers take money out of the liquidity pool in exchange for collateral. Once the amount borrowed is paid back with interest, the collateral is released. However, the collateral must be substantially more significant than the value of the amount borrowed.
The requirement for collateral is 150%; therefore, if 100 Bitcoin is borrowed, 150 Bitcoin must be collateralized. The collateral is liquidated and shared among the lenders if the borrower does not repay the loan.
HypaSwap (HYPA) Tokenmics
HypaSwap (HYPA) deals with multiple currencies and tokens. The driving token is HYPA, an ERC-20 token based on the Ethereum (ETH) blockchain. HYPA is used to carry out activities like interest rates, penalties, and staking incentives. HYPA can be bought on cryptocurrency exchanges and earned on the platform.
The HypaSwap (HYPA) platform has derivative tokens issued as a certificate of deposit to the liquidity pool. The number of derivative tokens issued is balanced with the number of assets locked in the pool. Once the user redeems the Tokens held, the Tokens are burned to prevent inflation.
HypaSwap (HYPA) also benefits individuals who stake their HYPA tokens. The longer the staking period, the higher the Annual Percentage Yield (APY) generated.
Governance rights are also offered to the holders of (HYPA) tokens while unlocking financial reward opportunities. More benefits of buying the (HYPA) token are the bonuses rewarded depending on the buying stage and the cryptocurrency used to purchase the token while in the presale.
If a user buys the HYPA token using the Ethereum (ETH) cryptocurrency in the second stage of the presale, there will be an 11% bonus for using the ETH token and a 4% bonus for buying in the second stage of the presale.
HypaSwap (HYPA) protocol is a liquidity pool protocol that allows every individual to participate in the cryptocurrency world by making any amount of any cryptocurrency available in its liquidity pool. This will enable individuals and organizations, irrespective of financial status become more interested in the crypto market.
HypaSwap (HYPA);
Website: http://hypaswap.io/
