Decentralized credit platform BNPL Pay is all set to revolutionize DeFi lending with its launch in January 2022.
This launch could signal a significant first step toward DeFi 2.0, creating a way to effectively utilize the influx of capital in DeFi to service off-chain borrowers.
In recent times, the unprecedented success of DeFi has baffled financial experts across the globe. With its global accessibility, higher returns, and transparency, DeFi managed to bring about a paradigm shift in almost every aspect of the financial system. But, when it came to lending, DeFi too had no choice but to stick with the good old collateralized lending. This created entry barriers for people with no capital, hindering the full potential of DeFi.
Well-established DeFi protocols like AAVE have been recently experimenting with Trust Systems for uncollateralized lending. But, the emergent BNPL Pay is in a league of its own, with the introduction of the world’s first fully peer-to-peer network of lenders and borrowers. Distributed protocols like BNPL Pay can take the best in class open source products, like AAVE, and innovate in a very short period of time rather than creating from scratch like centralized products.
To achieve their vision, BNPL utilizes a decentralized network of banking nodes. Once the protocol goes live in January, any individual or organization can set up banking nodes to start accepting lender capital and loan requests from both on-chain and off-chain borrowers. Yes! Off-chain borrowers too.
The USD $100 billion influx of capital into DeFi recently brought about the challenge of effectively redistributing this capital. As Stani Kulechov, CEO of AAVE said, “I truly believe that DeFi as it’s now growing all the time, it’s becoming pretty much like a vacuum of liquidity where we will see more and more funds going in then the next step will be, how do we get those funds out of the system.”
In this regard, BNPL Pay’s new approach to credit paves the way for this capital to be redistributed across the global financial system by connecting DeFi lenders to TradeFi borrowers. BNPL’s banking nodes act as a bridge between on-chain lenders and off-chain borrowers, providing an on-ramp for their entry into DeFi. Moreover, the higher and more sustainable yields on BNPL could be the tipping point for DeFi’s mainstream adoption.
This new protocol is the brainchild of a team of individuals who have significant expertise in both TradeFi and DeFi. Having seen both the financial systems closely, the team at BNPL took up the challenge of creating a protocol that shatters the barriers between them. This unique vision has garnered the attention of global financial experts with Australia’s Clee Capital joining in as an early backer.
Along with this, the protocol is also backed by QI Capital, 0x Ventures, RuneBase, and Airspeed18. As BNPL Pay gears up for launch in January, it has been audited by the security firm Hacken and a partnership with ImmuneFi is due post-launch for bug bounties.
With the creation of a truly peer-to-peer network, BNPL Pay could be a game-changer for DeFi functioning both as a protocol and an application to achieve efficiency while simplifying the process of lending.
About BNPL Pay
BNPL (Buy Now, Pay Later) is a decentralized lending protocol that puts credit in the hands of those who need it the most: users without capital. We tackle the problems presented by uncollateralized borrowing through a unique design in which a decentralized network of banking nodes services the needs of the industry. With this protocol, anyone can become a lender, and anyone can apply for a loan.
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