17 Dec 2021 · 2 min read

Themis ushers you into DeFi 2.0

Disclaimer: The text below is a press release that was not written by Cryptonews.com

Before we step into Defi 2.0, let’s recap what DeFi truly is and how it began..

Decentralized Finance, as a financial movement that is sweeping the world, is only just taking shape; However even in its infancy it is hard to ignore DeFi’s compelling value proposition - i.e., both individuals and institutions making use of broader access to financial applications without the need for a trusted intermediary. 

The core tenet of DeFi is to open traditional financial services to everyone, and to provide a permissionless, financial ecosystem that resides on blockchain infrastructure. This is especially beneficial for people without access to financial services. Even more so, DeFi promises a full-fledged capital market.

DeFi witnessed a cambrian explosion in mid-2020 also famously known as ‘DeFi Summer’, with the advent of liquidity mining that started with Compound’s valueless governance token $COMP. Essentially users were incentivised to provide liquidity with a reward, a token minted as an IOU to the early users bootstrapping the protocol.

Now DeFi 2.0 as the name denotes - is a new and improved version of the original financial revolution. Several stalwarts such as Aave, Uniswap and newer entrants such as Popsicle Finance have strived to address the capital inefficiencies inherent in the system.

Of particular note is Uniswap V3 and it’s answer to solve the dilemma of optimal capital utilization.

On Uniswap v3, liquidity provider (LP) positions are represented as NFTs (ERC-721) as opposed to the fungible, ERC-20 tokens on Uniswap V1 and V2. 

Based on the pool and the parameters selected on UNI v3’s liquidity providing interface i.e., the tokens in the underlying pool, the liquidity concentration, the ratio at which the tokens were deposited, so on and so forth.. a unique, one-of-a-kind NFT is minted.

Uniswap provides three fee tiers & concentrated liquidity ranges to choose from. This has led to reduction in IL (impermanent loss) and a massive increase in capital efficiency.

However, surprisingly no DeFi protocol has yet devised a way to utilise the immense capital (~4 Billion!) locked up as Uniswap v3 NFTs.

Here’s how Themis changes the paradigm

Themis is an ERC-721/ERC1155 compatible collateralised lending protocol. Themis allows users to anonymously lend by creating pools of funds against valuable NFTs. Themis brings lending to the metaverse as well as the GameFi economy.

As of now Themis accepts Uniswap v3 NFTs as valid collateral making it the ultimate money lego to Uniswap v3.

The ~4 Billion liquidity that currently lies in Uniswap v3 NFTs can be put to work in the capital efficient protocol that Themis has built (currently in testnet).

When everything DeFi seems to be just another UNI/ OHM/ SNX fork, Themis is a breath of fresh air, innovating to stay ahead of the curve, factoring the immense growth potential of the imminent metaverse economy.

Themis is hence poised to take the reins of DeFi 2.0 by steering the momentum brought on by the popularity of NFTs, enabling them to be used as collateral, thereby achieving greater capital efficiency in the ecosystem.