Defi Lending Protocol - Africa focused- Kenya

Funding Proposals Grants
1

Name of Project

Moved from the DAO Category

[Summertime Finance DAO]

Proposal overview

[Describe in less than 2,000 words on how this will benefit the blockchain ecosystem. Be specific about the goals and outcome of the proposal, with go-to-market and/or user-acquisition strategies if possible.

SummerTime Finance is a decentralized stablecoin issuing protocol leveraging over-collateralization of locked yield-bearing liquidity.

SummerTime allows you to keep your yield-bearing crypto capital and its keep the upsides and be able to access & spend some of its value. There’s no need to sell your crypto to have a wonderful summer when you can have both at the same time.

The Problem: Capital Illiquidity

There are billions of dollars locked & concentrated in numerous DeFi protocols/platforms represented as yield-bearing tokens to the user from the likes of automated market makers (AMMs) LP tokens e.g PancakeSwap, or yield-farming optimizers e.g Yearn, Beefy, Autofarm & PancakeBunny.

Locked is not necessarily a bad thing here, but this removes these billions of dollars out of circulation in DeFi, reducing overall liquidity available across the DeFi ecosystem, with no way for the ecosystem to access some or all of this value.

The Product

SummerTime protocol’s 1st product is the SHELL stablecoin.

SHELL is a decentralized, censorship-resistant, unbiased, over-collateralized backed stablecoin, soft pegged to the U.S Dollar. Every SHELL token minted is backed by at least 110% of locked yield-bearing collateral from the user.

AMM LP token holders e.g BTCB-BNB, ETH-BNB, USDT-USDC, and others, driven to keep the upside to their portfolio can borrow up to 90.9% of their collateral by minting SHELL. Upon paying back their SHELL debt they will regain access to their collateral, which they have to lock in their protocol-controlled provisioned vaults.

What stage of the product or idea are you (and your team) at? Is it live on Harmony and/or another chain? How many active users do you currently have, or aim to acquire? How much funding do you need? What are your milestones? What help do you need, or what gaps are there in your team?]
We are at 60% Development. Here are links tour our milestones:

Proposal ask

[$697,024]

Metrics for success

[Milestones, number of users/transactions]
We will consider our initial form of success when at least $10M worth of the SHELL stablecoin has been minted & is in circulation. Our true success is unlimited as proven by the likes of UST and DAI with billions currently minted, in circulation, stable and the amount in circulation is actually growing steadily every year.

[Describe in less than 2,000 words on how this will benefit the blockchain ecosystem. Be specific about the goals and outcome of the proposal, with go-to-market and/or user-acquisition strategies if possible.

Although Defi is global, we are initially focusing on Africa and Kenya will be the country that we will start with. We plan on offering education and training/development with our non-profit African women lead organization. Our partners have hosted conferences in Africa over the past 7 years and the partnership included Community Dev Groups, Universities and Co-working spaces.

External links

https://summertime.finance/

[Project link, demo, whitepaper, video]

2

Thank you for submitting a proposal to Harmony’s $300M Ecosystem Fund. We are in the process of reviewing your proposal and will assign a representative on behalf of the Grants Ops team.

We would also love :blue_heart: to have the Harmony community participate to ask questions and provide feedbacks.

If you have more details to add, please do so by replying to this thread.

1 Like
4

Thank you, I look forward to it.

5

Hi @AAkpe,

Novel idea. Few questions regarding your project.

  1. Do your fees (withdrawal/liquidation) rebate back to community treasury?
  2. Overcollaterlization by crypto assets or centralized stablecoins?
  3. Will this be custodial or non-custodial?
  4. What is your protocol on vesting period in your treasury?

Thank you

1 Like
6

How does this benefit the ecosystem (as in being africa focused? why?
harmony currently has tranquil,aave,hundred finance and wepiggy. ALL of them being borderless, focused on ANYONE.
and for stablecoin minting, we got OIN finance, is it great? no
but certainly better than an africa focused protocol.

4 Likes
7

no
why would a finance product be focused on one specific group? And we have other projects that are up and running as serenity stated so I personally don’t see why we need to have another. And the fact that yall are asking for a 700k grant lmaooo, truly ridiculous

8

Thank you for the question:

Do your fees (withdrawal/liquidation) rebate back to community treasury?

Yes we do. The structure is:

Withdrawal fees: 0.5%

Liquidation fees: 12.5%

2.5% goes into treasury

10% goes to the stability pool

We’ll also have yeild farming lock in period for 21 days. We’re considering many options to enhance it rather than the predatory yield farming we’ve seen. We are defi 2.0 :slight_smile:

Overcollaterlization by crypto assets or centralized stablecoins?

Decentralised stablecoin.

Yes, over collateralized. At least 160% collateral coverage ratio.

Will this be custodial or non-custodial?

Noncustodial. The collateral is held by the protocol itself.

What is your protocol on vesting period in your treasury?

Yes, both the team funding and treasury fund are subjected to 1 year cliff, and a monthly vesting schedule for 3 years.

9

Thank you for the question. We are a global company with a special focus on Africa. With that being being said, when we mention Africa we think of Financial Incision and education

Here’s a bit of background:

A large part of the Africa’s adult population is unbanked. The continent had 298 million adults with bank accounts in 2017 according to data by Statista. In 2022, the number of banked adults will likely rise to 456 million, or roughly 38% of the continent’s population. The United Nations estimates that three-quarters of the continent’s population is under the age of 35.

Africa’s need for financial inclusion is rising as its young population grows. Banking is vital for poverty reduction and sustainable growth. The traditional banking system has however failed to bridge the gap. Consequently, mobile money and open banking platforms have quickly taken over most banking roles.

These two financial sectors have leveraged mobile phone technology and data to build efficient domestic payments and financing systems. Introducing defi (with education) to the continent’s largely youthful population can leapfrog the region’s financial development, creating a new paradigm.

Also Africa’s major banking challenge is its existing inferior and redundant banking system. The infrastructure is poor and financial education is short. For decades, banks have been trying to reach out to the unbanked, but their efforts are marred by the underdeveloped state of the market. Most of the population has low income and the judicial systems are fragile.

Political instability has constrained the advancement of the classic banking system. Most banks rely on expensive technology, limited talent, branch networks, and inadequate systems. For this reason, businesses and individuals have turned to mobile money for payments because of high account maintenance charges.

By educating the African community on Defi, we would be allowing some within the population the ability to save on high fees, which is why most avoid the banking system.

In the developed world, reinventing the financial sector calls for massive human and financial investments. There would need to be lots of research, and a willingness to move from what is working systems to DeFi. The comfortable population would have to accept blockchain’s efficiency and choose it over ATMs and online banking.

Africa is different. With DeFi, people in Africa with adequate access to banking can finally gain access to financial tools such as being provided liquidity, borrowing, lending and saving that will be essential in a growing economic market.

With Summertime Finance, people become their own bank and enjoy all the services offered by traditional banking system seamlessly and more profitably. Summertime Finance will also provide access to crypto loans. Which for most throughout the continent is outside of their reach.

Lastly you mentioned tranquil,aave,hundred finance and wepiggy. I can say that while DeFi is a liberation tool to the people of Africa, there is still a wide knowledge gap as most Africans have no idea about decentralized systems, never mind how they work. Most of the mentioned companies have educational programs on their websites and that’s where it stays.

10

Thank you for your question, please see my response to Serenity above. Additionally, here is more information to your question:

The popularity of mobile banking in Africa has increased in recent years because of the arrival of cheap smartphone brands like Infinix and Techno. Most people in rural communities cannot afford expensive smartphones like the iPhone. There were more than 500 million internet users in Africa by December 2019, which means most African communities are connected to the internet.

The rise of mobile banking and USSD have increased recently. Many fintech companies like Paystack, Opay, and Flutterwave have come out with solutions that can improve transactions’ speed. The speed of transaction is essential for the growth of Small and Medium Enterprises (SMEs) and is also essential for the growth of the economy. Many businesses in Nigeria prefer to collect large payments through bank transfers or cards to protect themselves from theft.

TechCrunch reported that Flutterwave processed 107 million transactions worth US$ 5 billion. The companies working on these solutions still have to work under the central authority to achieve their aims. Their operation rules are mostly dictated by the government’s central bank, unlike DeFi, which has no central authority.

Education leads to Financial Inclusion and that is our goal for Summertime Finance.

11

Miss gurl, from what I understand you are trying to promote people in Africa to Defi right? Why not just teach them about the existing projects that is perfectly up and running?? And what does that have to do with YOU want to create your own protocol and ask for a 700k grant? How is your project any special beside educating the African community on Defi?

2 Likes
12

Thank you for the follow-up question. The main players like MakerDao, do not support AMM (Automated Market Makers) LP Tokens.We are building a decentralized stablecoin lending platform that can be backed by your AMM LP Token. Which allows you to borrow against. it. You get to keep all the upsides and still extract value.

. Currently the only defi platform that is offering what we’re building is Myfinance (Qidao) which is only offered on the Phantom Blockchain on selected AMM LP Tokens. There’s no one offering this on any other blockchain. Yes education is a plus but no one built what we’re building.

Please see attached budget breakdown within this document.

Thank you for asking these questions, it definitely adds to our purpose

13

The reason for that is the risk of Impermanent loss, its all to protect stable liquidity.
Also, QiDao is present in harmony, but im unaware of how well the product is in the network vs its presence in fantom, could arguably be roughly the same.

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We at Summertime Finance have a focus on the top/popular tokens pairs such as ETH-BTC, ETH-BNB, BTC-USDT which for us is less of a concern as we see they have the highest concentrated liquidity and they have very little volatility against each other

Also most of the AMM LP pairs will use are yield farmed, thus we are also plugging the ability auto farm & compound their LP tokens, and still allow them to borrow against it. This gives us extra abilities such as paying down their loan automatically over time

15

So basically Xenon Finance? :face_with_raised_eyebrow:
You still haven’t convinced me why you need a 700k grants when Xenon has built an up and running project with only 50k.

1 Like
16

Thank you for the information on Xenon Finance, though it has similarities to Summertime Finance, it is not what we’re building.

Xenon allows LPs to deposit their LP tokens to allow other LPs to borrow from them so they can make more mutually. The borrowing LP provider earns more and the lending LP provider earns from Xenon and the LP provider that borrowed from them.

We are solely a stablecoin lending platform, backed by specific LP tokens provided by willing LP providers. They still keep the upside of their LP tokens as we do restake them in the respective platforms, and let them continue earning while they’ve borrowed the SHELL stablecoin from Summertime. This enables us to self repay down gradually the stablecoin lent to them while still compounding their earnings back into their collateralized LP holdings.

Xenon is much similar to Alpaca finance and Alpha Alohomora.

We (Summertime Finance) is similar to MakerDao, Yearn, and Alchemix finance (from the ETH blockchain), if they all had one baby but now solely using LP tokens from AMMs.

And since such a complex platform doesn’t exist, we were not able to fork from anywhere (please note, Xenon is a fork). We’ve had to borrow concepts from all of them and bring them all together by writing all the code ourselves.

We’d love to launch with the protocol audited, and also bootstrap some liquidity to get the project going. This itself would cost upwards of $200K, please see the budget, not including the normal day to day operations of the project to hire so as build fast enough & launch the rest of the features of the protocol such as our innovation NFTs gamification to our yield farming, please see the roadmap here, while also working on the Africa expansion starting with Kenya.

17

@AAkpe - With the recent tail risk in the market. I would like to get some clarity on your stablecoin.

  1. Which fiat are you planning to peg to?
  2. Which collateral type will your stablecoin be? ie Fiat, Crypto, Commodities, or Algos
  3. Which coins are you purchasing for your reserves to maintain stabilization?
18

Thank you for the question Cheualx,

  1. Which fiat are you planning to peg to?

SHELL token is a decentralized, unbiased, overcollateralized backed token, soft pegged to the U.S Dollar. It is not an algorithmic stablecoin.

  1. Which collateral type will your stablecoin be? ie Fiat, Crypto, Commodities, or Algos & Question 3. Which coins are you purchasing for your reserves to maintain stabilization?

SHELL borrowing (minting) is non-custodial. This means the user has complete control over their capital and can deposit their capital, borrow SHELL (by minting), pay back SHELL (by destroying), and withdraw their collateral anytime, at their will, instantly.

Every SHELL token minted is backed by at least 150% of the yield-bearing collateral locked by the user.

SHELL tokens are majorly backed by LP tokens from AMM or yield-optimizing protocols eg. PancakeSwap BNB-ETH LP tokens or Beefy Finance IOU LP tokens. The user’s yield-bearing LP tokens continue to generate yield and are compounded by the protocol. Think of MakerDao having a child with Beefy Finance.

Eg. If the user’s BNB-ETH liquidity pool capital is generating a 10% yield per annum, and the SHELLs borrowed debt interest rate is 4.5%, then the protocol will overall take 4.5% overall within the year to pay down the debt interest rate being accrued, making the debt interest free. 6.5% of the yield earned will be compounded back into the LP collateral.

The user will be able to borrow SHELL tokens at an initial interest of 4.5%

Plus here is additional information from our Litepaper:

### The Problem: Capital Illiquidity

Through the exponential growth of TVL(total value locked) in DeFi, there are billions of dollars locked & concentrated in numerous DeFi protocols/platforms represented as yield-bearing tokens to the user from the likes of automated market makers (AMM) LP tokens, such as Uniswap, Sushiswap, PancakeSwap, QuickSwap, or yield-farming optimizers such as Yearn, Beefy, Autofarm, PancakeBunny.

Platforms such as AutoFarm and PancakeBunny do not give you IOU tokens that represent your deposits, so users like you are left, generating & compounding your yields, but also completely locked out of accessing the value of this capital in any way.

Locked out is not necessarily a bad thing here, but this removes these billions of dollars out of circulation in DeFi, reducing overall liquidity available across the DeFi ecosystem.

In short, these are billions of dollars sitting, technically are in use, in these protocols, but leaves the user not being able to spend its value when they’d like to without exiting from these yield generating platforms triggering the end of the user’s capital generating yield.

SummerTime protocol’s 1st product is setting out to make the value of this yield-bearing illiquid capital accessible. We’ll achieve this by introducing the SHELL stablecoin.

19

Here is a short answer:

Which fiat are you planning to peg to?

USD, U.S Dollar

Which collateral type will your stablecoin be? ie Fiat, Crypto, Commodities, or Algos

Crypto. AMM LP tokens. 150% overcollaterized.

Which coins are you purchasing for your reserves to maintain stabilization?

10% of every liquidation goes into the reserves. We will also have a stability pool. And after the initial product launch we will have a product that supports the minting of the SHELL stablecoin using USDT, USDC & DAI.

20

After careful review, we have concluded to decline your proposal. We hope you continue to build on this concept and circle back when it is ready to be discussed further.

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Thank you for choosing Harmony.

1 Like