Hashstack’s Open protocol is the world’s first autonomous lending framework enabling under-collateralized loans upto 1:3 collateral-to-debt ratio. This means, on Open, you can borrow upto $300 by providing only $100 as a collateral. Of this, you can withdraw $70, while utilising $230 as in-platform trading capital. We have integrated Paraswap to facilitate in-app market swaps. In comparison, defi lending as of today is over collateralised. For example, on Compound you have to provide $100 as collateral, to borrow $70. On Aave, some markets are so steep that a borrower provides $100 in collateral to secure $20 loan. Yet DeFi lending dominates the defi ecosystem with 64% of total TVL.
Open improves upon the known inefficiencies in the present day decentralized financial lending space through effective asset utilisation, facilitating under collateralized loand , & compartmentalization of deposits & loans by commitment periods. Commitment periods provide liquidity predictability for the Open protocol.
Open supports 3 primary markets [ONE, Stable coin, STACK], along with 30 secondary markets. Supply/borrow is facilitated in the primary markets only, while debt can be swapped to & fro, in the secondary markets.
What’s Unique
Open is the first meaningful step towards providing autonomous under-collateralised loans. No credit score, no anchorage required.
DeFi lending is a 66bn economy by TVL. Harmony has a major opportunity to capture a bigger piece of this TVL.
Open is not a fork of any existing DeFi. We have painstakingly built this through many iterations over a period of 6 months. It is completely decentralised with two oracle dependencies - price feed & liquidation monitor. We have integrated Chainlink for price feeds.
Open will bridge assets of other chains such as Ethereum as an expansion of its primary markets
State of product
Deployed to bsc testnet on 19th October.
October 31 to Nov 02: Public testnet.
Nov 15: Audit
Nov 28-30: Mainnet[Alpha]
72,000+ strong community across all platforms.
Support
Soft support: Technology, comarketing, partner network[investors, and projects]
Monetory support: Launch grant, Investment.
Roadmap
Q4, 2021: Open protocol mainnet.
Q1, 2022: Cross-chain bridge to support non-native chain assets.
Q2, 2022: Open v1.0
Q3, 2022: Product market fit.
Team
Max comes with 8 years of product experience in consumer technology & finance. He has been through multiple product development cycles from concept to traction.
Dinh is a core blockchain developer at Hashstack. With past experiences at Sushi & LaToken.
Charan is a computer science grad, with almost a decade experience programming in the latest technologies including RUST. In his recent emplyoment, he lead engineering division at a reputed blockchain analytics firm in Bangalore, India.
Proposal ask
Launch grant: 50k USD
Bounty: 50k USD
Investment: 750k USD
Partnership[Co-marketing, technical support, facilitating interactions with Harmony’s partner network]
Justification
The grant will be utilised to acquire a security audit.
Bounty will incentivise security researchers to diagnose critical errors early-on.
Investment will be utilised in 3 key areas - talent acquisition & product development, user acquisition, in-app incentives for staking & borrowing.
Metrics for success
Total value locked
Q1. 2022: 50mn
Q2, 2022: 100mn
D2D: Deployment to deposit ratio aka effective asset utilisation
After reading the Open protocol whitepaper i can say that i found very interesting the whole idea and the way it’s implemented. Besides the uniqueness, a solid, reliable team is unquestionably needed. Their team answers everything in details in their community channel so it’s a very strong plus towards the projects reliability. I believe Harmony’s grand should take a closer look here. Maybe we have a strong defi player in the nurturing phase…
Thanks for your question
Short answer: Yes. But, we are trying to utilise Harmony as a base chain.
While developing Open, our focus had been to utilise Binance smart chain for its low gas fees, high throughput at the risk of centralised nodes. However, with Harmony, we would be able to meet our requirements in a better way.
This is a very interesting project at its birth. I will keep a close eye till the launch. Hope this collaboration with harmony to flourish. Congrats to all team .
I have been reading the whitepaper (half way through) and have already some questions. Please, be patient with me:
I see that the whitepaper only refers to BSC. As I got you are planing to do the same with ONE as base token. Am I right?
In over-collateralised platforms it’s in the best interest of the borrower to return the borrowed amount but how do you make the borrower return the borrowed amount in Open?
Example: If I borrow 100USD on AAVE I need to deposit more than that (lets say 200USD). If I want to get back my 200USD I better return what I borrowed.
If in Open, I borrow 200USD but only have to deposit 100USD, what impedes me to never come back to Open and return the borrowed 200USD? It’s an easy 100% gain.
What catastrophic event could make the system collapse? On over-collateralised platforms the excess in collateral is preventing this exact thing to happen. There is more money put in than taken out at any given time. I see that you have a statistical approach that improves the efficiency of the needed capital at any time to prevent a collapse, but crypto markets are incredibly volatile in price and also in volume traded.
These are easy concepts for someone that is deep into lending and borrowing but I am having a hard time to get it all together. Overall I think that the market was needing something like this, that works more similar to traditional tradfi lending. If this works as smooth as conceived, it could be a killer app. So far I like this
DeFi lending is an emerging economy, no doubt about that. For sure Open protocol will have a positive impact in our ecosystem. This project is definitely something we should keep an eye on.
Thank you so much for spending time to read the white-paper. I have answered your questions in the same order.
Right. At the time of white-paper release, our development efforts were focused on BSC as a base chain.
In the proposal overview section above, we have answered this question. Pasting the same for your reference - on Open, you can borrow upto $300 by providing only $100 as a collateral. Of this, you can withdraw $70, while utilising $230 as in-platform trading capital. We have integrated Paraswap to facilitate in-app market swaps. We have plans to integrate defi synthetics to provide expansive options to utilise the remnant $230 effectively. Let me know if you need additional explanation on this
The blackswan event in our opinion would be the cascading sells in a bear market structure. One of our approaches involves, clear demarcation of the markets[tokens] supported, into primary & secondary. Primary markets in the current version are limited to three. ONE, Hashstack’s governance token, stable coin. The goal is to limit primary markets to an exclusive list of markets with significant liquidity, and low slippage probability. So in the case of a blackswan event, the slippages would still be comparably acceptable in comparison to the lesser liquid markets. Additionally, we are developing in-house data analytic capabilities to constantly determine the risk to the protocol.
I am no crypto expert but this sounds promising. Found this project proposal from @kratos_harmony tweet, so count me in. I only wish it was already live, Bull run + under collateralized loans =
thanks a lot for your reply. Only now I had time to answer.
Ok, that was an easy one
Ok, I read all that but didn’t process it correctly. I get it. Through limiting the % of the loan that can leave the platform, the stability of the whole system is controlled.
Here I get lost a bit. The 3 primary tokens could suffer a hefty sell cascade in a bear market or black swan event the same way than the secondary tokens. The stable coin in the mix might be the key but at the end, it’s all based on a statistical model and the better that model is, the better and more resilient the whole system becomes…I guess.
My noob questions have been satisfactory answered
Thanks again!
@MaxTakahashi thank you for submitting a well-described proposal with some metrics for success.
Let’s be clear that this isn’t a Port (from another chain that has found product-market fit) nor a Bounty (Harmony helps define the scopes, the estimated hours and the deliverables of tasks).
It’s a Launch project.
We understand that you’re also looking for funding, and our guidelines in Harmony Grants and Investments (Paused) has clarified that we recognize the need for teams to look for funding, and we can be a follow-on investor.
To keep things simple:
Can we scope this grant to a $50K Launch grant?
The launch guidelines state the following, will you be able to abide by these updated guidelines?
Applications of each launch must have prototyped a feature-full product. Harmony helps incubate these founding teams with product development, fundraising, and talent recruit. We recommend a $50K equity-free contribution each:
$10K after launching a feature-complete product on our testnet $10K after forming a DAO with 5-out-of-9 multisig with our DAOs $10K after launching on our mainnet with audit $10K after 1K daily active users (with launch video, full PR promotion) $10K after 10k daily active users (with a detailed roadmap, governance process)
We recommend a 5-out-9 multisig account on Gnosis Safe with 3 governors from the project team, 3 governors from the project community, and 3 governors from Harmony DAOs – namely, ONEcommunityDAO, ONEdeveloperDAO, ONEincubatorDAO.
In all cases, we ask for 3-month exclusive campaigns with Harmony before more porting with other chains. We also offer follow-on investments – see 50 Investments ($20M) above; but, at the moment, you must have an outside, lead investor for us to match the funding terms. All codes, development materials and production assets must be fully open, preferrably with MIT or BSD licences; weekly updates must on sent on forum; and, all server deploys or mobile apps must be easily clonable.
Thank you for choosing Harmony. We look forward to hearing from you.
Looking forward to the first milestone for a Testnet Launch.
“Testnet Launch” means launching a feature-complete product on Harmony Testnet. We define feature complete to include a user interface, connection to a wallet (Metamask, Harmony ONE Chrome Extension, etc.) on Testnet, and can be tested end-to-end by at least 100 users.
