Gravitas Protocol is a comparatively new interest-free shopping protocol on Ethereum. This decentralized protocol is gaining recognition attributable to its distinctive function that permits customers to borrow towards their Liquid Securities Tokens (LSTs) with out incurring any curiosity prices.
In comparison with conventional lending platforms, Gravitas Protocol stands out as a safer and clear possibility attributable to its decentralized nature. Customers have the flexibleness to repay the mortgage at any time with out the burden of accrued curiosity prices, as they solely must pay again the principal quantity borrowed.
Primarily, Gravita acts as a development catalyst that goals at decreasing focus amongst Ethereum LSTs for minority initiatives on this vertical. Furthermore, Gravitas Protocol is user-friendly, permitting anybody with an Ethereum Pockets to entry its companies seamlessly.
What’s Gravitas Protocol?
The Gravitas Protocol works upon Liquity’s economic model, which kinds the underlying basis of the protocol. It ensures the environment friendly borrowing course of and well timed liquidations of tokens inside the ecosystem. Whereas the protocol doesn’t cost curiosity, customers should pay a typical 0.5% borrowing charge upfront for every new debt or debt enhance.
Supply: Twitter
Nevertheless, the protocol refunds the borrowing charge if the consumer repays the debt inside six months to incentivize short-term borrowings. There’s a minimal charge equal to at least one week’s curiosity that also applies in such circumstances.
When it comes to the multi-collateral design of the Gravitas Protocol, every place is proscribed to a single collateral sort. All collaterals inside the protocol are linked to the identical stability pool, guaranteeing consistency and ease in collateral administration. Moreover, the loans issued via the Gravitas Protocol are in GRAI tokens, incorporating a volatility-dampening mechanism just like Liquity’s LUSD.
Debtors can mint $GRAI tokens by leveraging the worth of their collateral. Customers can then use these tokens to trade for different belongings, present liquidity, or take part within the protocol’s stability mechanism.
How does Gravita Protocol work?
Gravitas Protocol makes use of a collateralized debt place (CDP) mannequin. However how does it work? When customers want to borrow funds, they deposit their LSTs right into a CDP, which serves as collateral. The worth of the deposited collateral determines the quantity borrowable. As soon as the borrowing course of is full, customers are free to speculate or use these funds.
The mortgage process within the Gravitas Protocol revolves round an idea referred to as a “vessel.” A vessel represents a mechanism the place customers can deposit their collateral by opening a vessel and borrowing GRAI tokens towards it. Every Ethereum handle is allowed to have one Vessel per collateral sort.
Supply: Gravita Protocol Docs
Customers can obtain GRAI tokens once they deposit collateral into their Vessels. As we mentioned earlier than, the quantity of GRAI tokens borrowed is decided by the worth of the deposited collateral, permitting customers to borrow as much as 90% of their collateral’s worth. Gravitas operates via a easy three-step course of:
Step 1: Borrow GRAI
To start, customers can open a Vessel and deposit their collateral. By doing so, they will borrow GRAI tokens with a most charge of 0.5%.
One notable benefit is that these loans are interest-free indefinitely. It permits customers to leverage their collateral with out the burden of accumulating curiosity prices.
Step 2: Deploy GRAI
As soon as customers have obtained GRAI tokens, they’ve varied choices. Every GRAI token holds a worth equal to $1. Customers can select to swap or spend their GRAI tokens as they like.
Moreover, they will deposit their GRAI tokens into the Gravitas Stability Pool, which presents the chance to buy WETH (Wrapped Ethereum) and LSTs (Liquid Securities Tokens) at a reduced fee. This state of affairs gives customers with flexibility and extra utility for his or her GRAI tokens.
Step 3: Repay GRAI
The borrower can shut their Vessel and withdraw their collateral at their comfort. This step marks the compensation of the mortgage.
Notably, if the borrower repays the mortgage inside six months, they could be eligible for a partial refund of the 0.5% charge paid in the course of the borrowing course of. This function incentivizes well timed mortgage repayments and rewards accountable borrowing habits.
Supply: Gravita
Easy methods to Deposit to Stability Pool to Acquire Revenue?
The soundness pool performs a vital position in supporting GRAI by appearing as its main line of protection. Its function is to make sure constant and adequate collateral backing for the GRAI token provide.
Gravita achieves it by permitting customers to deposit GRAI into the steadiness pool. The protocol then makes use of GRAI tokens obtained from customers to take part in collateral liquidations.
Upon liquidation of the Vessel, the protocol burns an equal quantity of GRAI tokens from the steadiness pool’s stability to repay the debt related to the Vessel. In return, the Vessel transfers all its collateral to the steadiness pool. This mechanism permits stability suppliers to regularly accumulate a pro-rata share of the liquidated collateral, regardless of experiencing a corresponding discount of their GRAI deposits.
So, depositing in a stability pool is the most effective wager for producing revenue for the customers. Customers who act as stability suppliers can revenue from liquidations. When the market is favorable, it may probably profit by buying collateral at a reduction to its market worth.
As an example, prospects can anticipate receiving WETH at a roughly 10% low cost when a WETH Vessel will get liquidated. The liquidations make sure that your entire GRAI provide stays absolutely backed by collateral, and Vessels that exceed the utmost Mortgage-to-Worth (LTV) ratio get liquidated. The Stability Pool assumes the Vessel’s debt, whereas the Stability Suppliers share in its collateral distribution, and the Vessel’s proprietor retains your entire GRAI borrowed.
Easy methods to purchase GRAI tokens
Supply: CoinGecko
To acquire GRAI tokens, you possibly can comply with these steps:
- Go to a decentralized trade equivalent to Uniswap.
- Join your pockets to the chosen DEX.
- Choose Ethereum ($ETH) and $GRAI
- Assessment the transaction particulars and make sure the transaction.
That’s it! As soon as the community completes the transaction, you’ll obtain the tokens in your pockets.
Conclusion
Gravitas is making waves within the crypto neighborhood, attracting customers from all elements of Web3 drawn to its interest-free mannequin. The platform’s increasing presence on social media and its assist for a number of LSDs on Ethereum contribute to its growing recognition and recognition.
⬆️ For extra cryptocurrency information, take a look at the Altcoin Buzz YouTube channel.
⬆️ Our common Altcoin Buzz Access group generates tons of alpha for our subscribers. And for a restricted time, it’s Free. Click on the hyperlink and be part of the dialog at this time.
