Holdefi (HLD): A Double-Audited Multichain DeFi Protocol on Ethereum Mainnet

Holdefi, a PeckShield and Open Zeppelin-audited, multichain non-custodial money market protocol, is operating full throttle after activating on the Ethereum and Binance Smart Chain (BSC) mainnets early July 2021.

What is Holdefi?

It is one of the many DeFi protocols leveraging on the distributed base chain for users’ benefit. 

For instance, there are over $58 billion of assets under management in various DeFi protocols in Ethereum alone at the time of writing. Most of these assets are in lending and borrowing protocols like Maker and AAVE. 

These are legacy platforms and among the first ones enjoying first-mover advantage, like how Bitcoin and Ethereum cemented their positions, emerging as leaders in their respective categories.

However, new emerging platforms promise better security, transparency, and flexibility by tapping on interoperability.

Uniquely, this is without distorting their original arrangement and core functions of allowing users to provide liquidity as suppliers while earning passive income through interest. 

At the same time, borrowers have express access to loans with competitive interest rates and over-collateralization due to the trustless nature of the protocol’s operation.

Separating Collateral Pool from Interest-Earning Liquidity Pool

Holdefi allows borrowers and lenders to participate with the distinguishing feature that borrowers are guaranteed their collateral is separated from the lenders’ liquidity. 

This enhances transparency in fund monitoring, critical when auditing. At any instance, borrowers’ collateral, kept in a secured pool, won’t receive interest. 

Furthermore, for easier tracking, the backing of a loan can only be one collateral asset. This asset can, nonetheless, be used to borrow different assets. 

By the third week of July 2021, Holdefi supported two assets—BNB and ETH—the second and third most valuable digital assets—as collateral for borrowers seeking to borrow loans.

For every locked asset as collateral, a user received POWER tokens. POWER directly tracks the price of the collateral and the collateral’s value to loan (VTL) ratio. 

In this case, the deposited collateral makes it possible to borrow a higher loan amount but with limitations of asset’s price fluctuation and the VTL. The lower the VTL, the higher the chances of liquidation of collateral. 

Besides VTL variation, an account’s inactivity for 365 days can make the protocol forcefully liquidate the collateral for debt recovery. Every liquidation, via the Collateral Auction page, has a penalty depending on its collateral. It shall be done until the collateral power is within acceptable levels. 

Holdefi’s Expanding TVL and Collateral Pool Size

As of July 22, over $209k of collateral has been deposited by borrowers receiving over $120k of loans. 

At the same time, suppliers have availed more than $201k. 

Holdefi currently allows liquidity providers to supply BUSD with varying APRs depending on the originating blockchain. 

The ERC-20 version of BUSD will see suppliers earn 2.93 percent and 3.14 percent if they are BEP-20 tokens. 

Meanwhile, borrowers receive BUSD as loans and payback using BUSD with either ETH or BNB as collateral. Over $198k of ETH and $79k of BNB had been locked in the collateral pool during this period. 

Eventually, Holdefi will support more stablecoins to include USDC, USDT, and DAI since borrowing demand remains high as per their research. 

Even with expectations to draw more borrowers, the protocol’s admin can increase or decrease the borrowing interest rate to incentivize repayment of loans or accelerate the uptake of new loans. Even so, borrowing interest rates can be changed every seven days. Nonetheless, for the interest of the borrower and to attract more, the protocol prefers stability over rapid borrowing rate changes. Regardless, the borrowing interest rate is capped below 40 percent irrespective of collateral asset price fluctuation.

The HLD Governance Token: Liquidity and Partner Status

Through Holdefi’s ERC-20 governance token, HLD, holders can vote for changes such as lending and borrowing rates or which collateral asset can be added. 

HLD has a total supply of 100 million, most of which is to aid in growing the ecosystem. 

Since the mainnet launch, HLD is available for trading on PancakeSwap and Uniswap DEXes. The token is also accessible at Bithumb Global, but the team is negotiating with more CEXes for listing. 

For holders and analysts, HLD’s key metrics can be tracked at some of the leading tracking and analytics platforms like Coingecko, DappRadar, CoinPaprika, CryptoRank, CoinCodex, and more.