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$2.25 Million Raised For Moma Protocol's Infinite Liquidity And Permissionless Lending

May 6, 2021 10:41 am
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$2.25 Million Raised For Moma Protocol's Infinite Liquidity And Permissionless Lending

Moma Protocol is opening the door to a wealth of assets to enter decentralized lending. The implications this poses for the defi community are significant as whispers of infinite liquidity abound. 

According to its CEO and Founder, Ocean Liao, Moma will provide “an expandable, scalable and flexible infrastructure for the defi world in 5-10 years, in a way that everyone can freely participate.” Thanks to a round of funding led by Fundamental Labs, SevenX Ventures, and a host of big names in crypto, $2.25 million has been acquired for the protocol’s fully operational launch in Q2 2021. 

More Decentralized Lending, More Decentralized Trade

While lending protocols have proven themselves one of the backbones of defi, their asset spread can be described as less than decentralized. Currently, just a few currencies like Bitcoin, Ether, and the most popular stablecoins are commonly deposited and borrowed against in kind. Now, the world is about to find out what happens when anything can be taken to the defi pawn shop.

Already running in beta, Moma’s official launch will allow a growing defi community the space to activate a plethora of unused assets, beyond the big-name cryptos, for borrowing and lending. This could mean you won’t have to shake out your bag of moonshots into a DEX every time new opportunities arise and your onhand stash of stables has run dry. 

Imagine a market with action pumping beyond the spectre of “If only I held onto that bag” hanging over traders’ heads. MetaMask is going to see a lot more clicks, and Moma is about to bring tons of unrealized value into the TVL of a dApp near you.    

Lending Beyond Permission, Liquidity Beyond Infinity

Moma’s proprietary smart contract factory seeks to do for defi lending what Uniswap did for trading. Inspired by the permissionless nature of Uniswap, Moma CEO Ocean and his team began working on a way to bring the same trustless and user-led financial transactions to lending in October of 2020. 

As Liao mentioned in an AMA from early May, “We decided to adopt this [smart contract] factory pattern to produce customizable launch pools and lending pools, and the two types of pools provide use case scenarios for each other, so in theory, infinite liquidity could be generated in this close loop platform design.” Yes, you read that right: he said the words infinite liquidity. 

Mo(ma) Money, Less Problems

While infinite liquidity is an exciting prospect that Moma brings to the defi table, diversifying lendable assets could also lead to a more sustainable future for defi growth. At its height in April, defi lending saw a strong rise and reached $1.59 billion in interest per year, and charts are quickly trending back to these numbers. 

However, these numbers have went down due to the April 16 flash crash that liquidated over $13 billion worth of positions and dragged all of crypto below the $2 trillion market cap it fought to ascend just prior to that power outage in NW China. Looking at those lending charts again, one can only assume that when Bitcoin’s price unexpectedly fell by over $10,000, traders leveraging way over their heads were not the only ones caught up in the tumble. 

Telegram chats lit up with people asking, “What’s a good health score for my borrows?” and a lot of people learned the hard way that whatever their score was wasn’t enough. If lending is the backbone of defi, then a power outage in China rocking the foundations of the community’s health is scary news. Fortunately, a future backed by Moma’s diversified lending could help reduce these shocks across defi as a whole, making it a more stable environment for investors facing an unpredictable yet alluring future. 

Image Sourced from Pixabay

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