Reducing Risk and Enhancing Liquidity in Crypto Markets

The cryptocurrency and decentralized finance (DeFi) ecosystems at present lack entry to secure, high-quality collateral past stablecoin. Crypto and DeFi merchants usually depend on risky belongings akin to bitcoin or ether as collateral for loans, staking and liquidity swimming pools. Whereas this technique is efficient, it carries vital dangers as the worth of those belongings can fluctuate wildly inside a brief time period, which might result in over-collateralization to restrict danger. The choice is to position stablecoins that solely present returns to the stablecoin issuers or choose market members via opaque revenue-sharing agreements.