Decentralized financing is not exclusive to one platform or network, and the Polkadot-based MANTRA DAO intends to unify the disparate world of DeFi under one decentralized autonomous roof.
Polkadot’s entry into the top ten cryptocurrencies by market cap spelled the rise of one of Ethereum’s most serious competitors to date. With that rise comes the obligation to support decentralized finance, allowing the burgeoning industry to evolve and become more consumer-friendly.
The solution may already be within reach MANTRA DAO, a decentralized autonomous organization that was the first application launched on the Polkadot blockchain. It provides a gateway to the world of decentralized restocking, borrowing and yield farming.
DeFi for the masses
Yield farming emerged in the summer of 2020 as a way to encourage participation in decentralized applications (dApps), allowing users to temporarily commit their tokens in exchange for daily payouts. Coupled with the passive income enabled by Proof-of-Stake (PoS) – where users are rewarded for locking coins to the blockchain – yield farming and stakeout are the epitome of crypto financing.
MANTRA DAO is a decentralized stakeout and lending platform, where token holders decide how to manage the protocol and deploy their cryptocurrencies in exchange for regular payouts from the native token, OM. Borrowing and borrowing can be done between users, with participants being rewarded in OM tokens for their fair behavior and participation. Only one OM token is required to participate in the governance process of the platform.
Several OM liquidity pools are already in use, the most recent be an OM / ETH pool on Uniswap. Rewards can also be earned by betting coins on a limited number of exchanges.
Interoperability and scalability are key priorities for MANTRA DAO, which explains the decision to build on Polkadot – a platform that also aims to connect disparate blockchains. MANTRA DAO itself is well positioned to act as a bridge between Polkadot applications and those of Ethereum as the OM token is fully compatible with Ethereum’s ERC20 architecture.
This means that users can use their tokens on Ethereum based decentralized applications. Likewise, holders of ERC20 tokens can communicate with MANTRA DAO and other applications built on Polkadot.
MANTRA DAO Co-Founder Will Corkin has said interoperability is key to driving DeFi mainstream, adding: “Not only can we bring Ethereum DeFi to Polkadot, but we can also bring all DeFi to all peers on all platforms.”
Spreading the DeFi tax
Although the DeFi industry is worth it $ 15 billion at the time of writing, most of its activity is on an Ethereum blockchain that has been struggling under its own weight for a while. End users felt the pressure of this weight in September 2020, when the average fee for transactions on Ethereum rose to just under $ 15. Responsibility for the sudden surge in network activity and subsequent rise in transaction fees was placed on the door of the runaway DEX success Uniswap, which became a gateway to the world of yield farming.
Since Polkadot is expected to process more than 100,000 transactions per second (a number that could reach 1 million as the network expands), the bottlenecks caused by Ethereum’s current transaction count of 15 per second should not be a problem for DeFi users.
The potential for the next DeFi boom to attract the average non-technical user depends a lot on its accessibility and ease of use. With this in mind, MANTRA DAO has been designed so that functions such as stakeout, vote, and borrow and loan can be used with a few clicks of a button. The OM token will reportedly be available for purchase via bank transfer, as will credit and debit cards.
In order for DeFi to live up to its hype and potential, it will need to attract the average user and not just the tech-savvy. In such a scenario, user choice will be much less important than interconnectivity for a consumer base that has become accustomed to having their credit, debit and mobile payment options interchangeable.
A meaningful DeFi landscape will have to share the same level of interoperability, and that’s where MANTRA DAO wants to make its mark.
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