To create a bridge between the traditional financial economy and the blossoming decentralized finance ecosystem, Orbs blockchain is introducing a new liquidity-as-a-service application, Liquidity Nexus. With the introduction of this application, Liquidity Nexus will make access to defi easier for more traditional and professional investors, as well as provide a massive source of new liquidity for interested defi projects.
One of the most jarring problems within the blockchain ecosystem is interoperability: how to make applications more compatible with one another and legacy systems. As a public, open-source, and free blockchain infrastructure designed to support scalable enterprise-grade applications, Liquidity Nexus’ liquidity-as-a-service platform on Orbs will drive down the barriers to greater defi adoption. Orbs hosts both permissioned applications for businesses and fully decentralized applications, putting it in a prime position to provide services from the best of both worlds.
Making Defi More Accessible to Risk-Averse Investors
The defi market has undeniably exploded in the last year, growing parabolically with no signs of slowing down. Although the market has experienced massive growth, there is still a key group of investors who have been excluded from this opportunity due to the inherent risks of cryptocurrency and defi. As a highly complex field to navigate and interact with, most defi opportunities are limited to a small group of sophisticated investors. Liquidity Nexus is launching to make involvement in the defi space as easy as possible for all.
Liquidity Nexus acts similarly to a conventional interest-bearing savings account, but offers much better rates of return. Instead of the profits getting skimmed off by corporate executives and company shareholders, Liquidity Nexus is able to return the majority of the value generated directly to the end user. Using the Liquidity Nexus protocol, any company or professional investor can transfer funds in the form of stable assets to get started.
Once the assets are deposited, Liquidity Nexus will automatically begin to reroute the funds across its partner applications on Ethereum or Binance Smart Chain to start generating yields on the position. Unlike regular savings accounts, which may charge penalty fees, withdrawal fees, or other unnecessary fees to disincentivize you from removing your money, Liquidity Nexus provides the ability to withdraw all or a portion of your principal plus the interest generated at any time. The withdrawal will occur in the original currency or stable asset used by the depositor, making the transfer process straightforward.
Benefitting Defi Ecosystems
The benefits that companies and professional investors receive from this application are clear, but it is also highly beneficial to participating defi projects. Any defi project that is interesting in expanding its liquidity pool can integrate its positions into Liquidity Nexus smart contracts. This will allow Liquidity Nexus to utilize incoming stable assets to direct funds to the project’s liquidity pool, generating yield for the end user while strengthening the individual defi application ecosystem. Liquidity Nexus offers a great option for defi applications to immediately expand on their liquidity provisions.
Simplifying Defi Access
Following the introduction of Liquidity Nexus, on pace to be launched in Q3 of this year, greater access to the defi industry will become available to investors of all kinds. Liquidity Nexus removes a lot of the risk traditionally associated with involvement in the defi market, such as holding highly volatile and potentially unstable cryptocurrencies that can experience a significant loss of value in a short space of time. This risk is one that many established investors are not willing to take.
By exclusively utilizing stable assets, cefi and professional investors will not need to expose themselves to unnecessary risks. Beyond volatility, these risks have the potential for impermanent loss, reduction of capital through slippage and market inefficiencies, and more. The onboarding of cefi investors into this new market will have a major effect on legitimizing blockchain and cryptocurrencies. Liquidity Nexus has the opportunity to play a vital role in bridging cefi and defi and making this vision a reality.