Hundred Finance: Multi-chain Borrowing and Lending
Mission
Since the explosion in popularity of the decentralized finance ecosystem in 2020, borrowing and lending platforms have become core infrastructure within the cryptocurrency space. Not only do they provide the average user the ability to “hodl” their crypto assets while obtaining liquidity from their investment (a crypto-backed loan), they also underpin the workings of many other protocols. The movement of liquidity from the Ethereum mainnet to EVM-compatible blockchains and scaling solutions has done nothing to alter this. Platforms that grant the ability to borrow and lend are one of the key components new users look for in any emerging chain. Hundred Finance is looking to play this role in the multi-chain environment that has flourished since early 2021, delivering the freedom to earn yield and borrow assets to a growing number of users in a trustless and secure manner.
Project Summary
Hundred Finance - Hundred Finance is a decentralized application (dApp) that enables the lending and borrowing of cryptocurrencies. A multi-chain focused protocol, it integrates with Chainlink oracles to ensure market health and stability, while specializing in serving long-tail assets.
Users of Hundred Finance are able to lend select cryptocurrency assets and borrow against the token’s loan-to-value ratio, earning variable interest on the supply side and accruing it on the borrow side. Interest rates on Hundred Finance are calculated automatically and expressed per token as an annual percentage yield (APY). These rates adjust on a by-block basis in response to demand for a particular asset and the liquidity available to supply that demand. This encourages users to stake funds when demand increases, helping to maintain ongoing market health.
The Hundred Finance platform has its own token, HND. Once sufficiently distributed among users, the HND token will allow protocol decisions to be made in a decentralized manner through its implementation in governance. The distribution of HND to users based on their provision of liquidity to the protocol also incentivizes interaction and assists in bootstrapping the Hundred Finance project.
Background
Hundred Finance first launched its protocol on Ethereum’s Kovan testnet in late-June of 2021. Following a two-month period of extensive testing, the HND governance token was then generated, shortly after which the Arbitrum version of the dApp deployed and began incentivizing use of the lending and borrowing markets. The incentivization structure has been designed to attract stablecoin liquidity to the platform (USDC and USDT deposits qualify for emissions), as well as DEX liquidity in the form of an ETH-HND pool created through a collaboration with DODO’s Arbitrum application. This pool allows for the staking of LP tokens in order to receive rewards paid out in a combination of HND and DODO.
Since going live on Arbitrum on the 25th of September, the protocol has acquired a total of around $15 million USD in liquidity. This figure merits special analysis, however, as unlike other lending platforms that see the accuracy of their figures embellished by allowing users to collateralize their stablecoins and then borrow that same stablecoin against this collateral (folding), Hundred Finance does not support this practice. While supplying USDC and USDT is rewarded, they have a Loan-to-Value of 0%. This approach prevents farming practices that would see the HND governance token farmed in a manner potentially detrimental to its future utility as a governance token.
Having enjoyed a successful first multi-chain deployment, Hundred Finance is now in the process of porting its dApp to new chains and increasing its user base, and has made Harmony its priority for our next deployment.
Community and Outreach
The Hundred Finance community is concentrated primarily on Discord, with the server having over 1000 members as of October 14th. We expect this community to rapidly grow once the project moves from its launch phase to a marketing phase, now that our first multi-chain deployment has proved successful.
In terms of capacity for community growth and outreach, the project’s founder and lead developer, vfat, will be a strength in this regard. vfat.tools is a popular website within the DeFi ecosystem, regularly receiving in excess of 12,000 unique visitors daily. Publicizing the protocol more actively to these users would create a means of increasing community size in a short space of time, as well as bringing these users to the Harmony ecosystem.
Grant
-
400k ONE
-
$20k USD for a concurrent marketing campaign
Proposal
As a part of its multi-chain mission, Hundred Finance will be launched on the Harmony blockchain. In order to encourage the users of our borrowing and lending services to be active participants on Harmony, we will be offering HND tokens as an incentive to bridge assets and supply them as liquidity. During the opening phase of our port to Harmony, we would like to provide the additional incentive of ONE token rewards received in combination with our HND emissions. This would encourage new members to join the Harmony ecosystem and use their acquired ONE tokens for their operational costs and HND as a stake in the future governance process.
Further to emissions for protocol use, a small portion of the grant ($20k USD) would be designated for a marketing campaign that would publicise Hundred Finance’s Harmony deployment over the course of the launch phase.
Success Metrics
- $25m in total liquidity (supplied + borrowed) within the first month
- 5000+ Discord members within the first month
- $1 Billion in transactional volume within the first year
Milestones
| Weeks | ||
|---|---|---|
| 1-8 | Implementation and Testing | Complete |
| 9 | Mainnet Deployment | Complete |
| 10 | Token Launch (Liquidity Provision & Airdrop | Complete |
| 12 | Launch on Arbitrum & Incentivization Commencement | Complete |
| 16 | Commencement of Marketing Campaign | Upcoming |
| 16 | Launch Harmony & Incentivization Commencement | Upcoming |
| - | Ongoing Multi-chain Deployment | Upcoming |
| - | Governance Implementation | Upcoming |
| - | Implementation of R&D Output | Upcoming |
Long Term Vision
The first year of the protocol will be devoted primarily to three key tasks:
- Multi-chain expansion
- User acquisition
- HND distribution
It is the intention that Hundred Finance, by utilizing multiple chains, will be first to market in some instances, contributing to the user acquisition carried out through our launches on major blockchains such as Harmony. Our deployment approach also ties into our goals for a wide distribution of the HND token, as our emission (farming) parameters have been carefully tuned to avoid intensive farming and selling. Instead, we have implemented an emission schedule designed to build a robust base of interested parties.
The multi-chain distribution of HND to a large number of users will subsequently provide the foundation for the implementation of a first-of-a-kind multi-chain governance system and the creation of mechanisms that allow the collateralization of assets across chains (supplying collateral on chain A facilitating borrowing on chain B). This particular innovation will have the major advantage of overcoming the lack of Chainlink availability of some chains. While both of these initiatives are still in the research phase, the two functionalities are planned to provide unique value propositions to the Hundred Finance platform and contribute to our growth within a competitive field.
The current development fund of Hundred Finance has been conservatively estimated to provide a runway of at least 4 years. Protocol fees will supplement the treasury during this time, facilitating the building of a robust protocol that serves its community of users by providing economical and efficient services in an increasingly multi-chain industry.
Team
vfat — Hundred Finance Lead Smart Contract Developer
acidbird — Community and Social Manager
nipa — Hundred Finance Web Developer
Bluecrypt — Interest Rate Modeller and Liquidity Manager
TerraBellus — Communications Manager
Backers
- MCN Ventures is a decentralized venture capital fund that focuses on incubating and growing key DeFi protocols such as lending/borrowing protocols, collateralized stablecoins, DEXes and DEX aggregators, and yield farms and aggregators. MCN is able to act as a broker on behalf of Hundred Finance in its interactions with new chains.
Links
Website: https://hundred.finance
Github: Hundred Finance · GitHub
Twitter: https://twitter.com/hundredfinance
Discord: Hundred Finance