JellyFi is a capital-efficient DeFi lending protocol
that enables crypto loans without collateral
Most DeFi applications require institutional borrowers to over-collateralize their loans using crypto as collateral, limiting the wide range of use cases possible with crypto lending. Collateralized loans not only restrict borrowers from using capital how and when they want, but also limit the potential for enhanced return for lenders.
JellyFi is a capital-efficient DeFi lending protocol that enables crypto loans without collateral, where institutional borrowers can obtain competitive loan terms, and lenders get access to higher returns while having more granular control over their investment portfolios. Zero-collateral loans are similar to a revolving line of credit where the borrower only has to pay a maintenance fee on unused capital in their own liquidity pool.
Institutional borrowers include audited dApps and protocols.
Once borrowers are whitelisted, the JellyFi platform only uses one liquidity pool per borrower that strengthens security. Borrowers have access to instant loans at a fair rate via JellyFi’s bid order book. Borrowers have flexibility on the JellyFi platform as they do not have to lock any collateral in order to meet their needs for recurrent and short-term liquidity. Interest and principal on the crypto loans are repaid at maturity.
Lenders have the ability to choose the borrowers that they trust to lend to, as well as their preferred lending rate. This gives lenders more granular control over their portfolios as they are able to make their own risk assessment, and select their lending rate based on their investment profile. An NFT represents each lending position with original artwork.
JellyFi’s platform for uncollateralized borrowing encompasses the values of permisionlessness and trustlessness of blockchain technology.
Whitelisted borrowers get access to a liquidity pool they can withdraw from that functions similar to a revolving line of credit. There is only one pool per borrower that is not limited in size. Borrowers can borrow up to a pre-agreed limit and repay from their liquidity pool as needed, only paying a maintenance fee on unused capital and interest fees on used capital.
For example, if a borrower only uses 20 ETH from their liquidity pool and has a borrowable capacity of 100 ETH, they pay a maintenance fee on the 80 unused ETH and a borrowing fee on the 20 borrowed ETH. At maturity of the loan, the borrower will repay their position with interest and can then withdraw from their liquidity pool without going through the whitelisting process again. This allows the borrower much more flexibility to access capital when and how it is needed.
In other words, JellyFi enables trusted borrowing and lending through its capital-efficient DeFi lending protocol and opens up a wide range of use cases for borrowers.
Lenders on the JellyFi platform have more control over their risk exposure compared to uncollateralized lending platforms that use shared liquidity pools. Lenders get more granular control over their portfolios.
With the JellyFi platform, lenders can perform their own risk assessment, specify their preferred lending rate, and choose who they lend to. Lenders do not have to lend to borrowers they do not trust, or expose themselves to unnecessary defaults because they got outvoted during loan approval. Lenders also do not have to wait for any minimum loan or terms to be agreed upon by a DAO. An NFT represents each lending position with original artwork that can be resold.
Lenders earn interest on used capital corresponding to the lending rate they selected when they entered the liquidity pool. In addition, idle capital is placed on a trusted third-party liquidity protocol, and lenders can benefit from its APY and earn a maintenance fee from the JellyFi platform. Therefore, lenders benefit from both earning a maintenance fee on top of the third-party yield provider’s APY on unused capital, and earning interest on used capital on the JellyFi platform. By choosing which borrowers to lend to and their lending rate, lenders have more control over their risk profile.
JellyFi has created a more capital-efficient environment for crypto loans through its decentralized finance (DeFi) lending protocol using blockchain technology. Each pool creates recurring liquidity that borrowers can withdraw from when they need it, similar to a revolving line of credit. As a result, borrowers are not forced to post collateral to get capital, unlocking a much more comprehensive range of use cases at the institutional level.
Zero-collateral loans are similar to a revolving line of credit where the borrower only has to pay a maintenance fee on unused capital in their own liquidity pool. Whitelisted borrowers get access to open a crypto credit line through a liquidity pool that is limited in size by the maximum amount they might need to borrow. Thus, borrowers can borrow and repay from their liquidity pool as needed, only paying a maintenance fee on unused capital and interest fees on used capital.
The bid order book is built around the concept of fair rate discovery. This allows lenders to specify the rate they are willing to lend funds to the borrower of their choice. Borrowing always starts from the lowest bid rate to the highest bid rate, which allows the interest rate to be discovered by the market.
Once a lender chooses a borrower, an NFT is generated on-chain that represents the parameters of the agreement. Each NFT comes with unique artwork. In addition, the NFT displays essential information about the agreement between the borrower and lender that can be viewed on-chain at any time. Each position can be sold to another person.
JellyFi, a capital-efficient DeFi lending protocol that will soon enable uncollateralized crypto loans, has closed a seed funding round of $4.4 million from leading crypto venture capital firms.