Liquidify is a decentralized smart contract protocol designed to improve the liquidity and growth potential when it comes to long-tail crypto assets investing by using a mechanism inspired by traditional finance to operate with non-performing loans.
By using the protocol, holders of long-tail crypto-assets can easily collateralize them by using Liquidify asset pools which are then synthesized by the liquidity accelerator into a fixed amount of tokens: Liquidity Accelerator Tokens (LAT) and Liquidify Tokens (LFY).
Liquidify is Helping to Power an Important Sector
The cryptocurrency ecosystem has seen 2021 as one of the best years in terms of both adoption and capitalization value as millions of individual and institutional investors jumped into the cryptocurrency, NFT, Decentralized Finance (DeFi), and blockchain markets.
With mainstream media and financial institutions paying close attention to the evolution of the crypto ecosystem, new projects continue to emerge to provide new use cases and cover the lackings of existing protocols, creating a whole new set of opportunities for interested parties.
While Centralized Exchanges used to be the go-to option for crypto investors, the advent of DeFi has given place to decentralized financial protocols that have facilitated the launch and exchange of the digital assets introduced by these projects but there are there multiple barriers that need to be overcome.
Crypto assets with low liquidity, low trading volume, and low market capitalization (long-tail crypto assets) have represented a challenge for crypto investors due to the difficulty they present at the time of trading them, while still representing huge potential in the crypto market.
The DeFi ecosystem has grown exponentially over the past year but no single solution has been created to address this concern. However, a new project was announced earlier in February of 2021 that was designed to capitalize on the potential of long-tail crypto assets: Liquidify.
What is Liquidify?
Liquidify tokens can be converted back into long-tail assets with real-time prices, allowing the exchange for other types of crypto assets and swapping of long-tail assets. They are also able to be used with smart-contracts, and a range of other tools in the Liquidify ecosystem.
The project was launched with the expectation of reinvigorating the existing community of long-tail assets investors and allow new users to join by providing a dedicated protocol that allows them to lock their assets in the liquidity pools, receiving rewards in exchange and facilitating the tracking of prices in a way similar to the use of indexes.
No other platforms in the crypto ecosystem have focused so far on offering a liquidity acceleration function to long-tail crypto assets but have focused on the creation and exchange of synthetic assets, which are fundamentally different from the used cases offered by Liquidify.
As Ruth Porat said: “Liquidity is oxygen for a financial system”.
To reinvigorate and maintain the healthy status of the long-tail crypto-asset market, and therefore the potential for innovation of the whole crypto ecosystem, a solution to accelerate and facilitate liquidity of such assets was much needed.
How Does LiquidifyWork?
By using LAT to track prices of the long-tail assets locked up in it, liquidify essentially operates as an index that not only provides speculative advantages and improved liquidity but also offers essential information about the general crypto market.
This infomation can provide a competitive edge when it comes to executing investment strategies.
The protocol claims to provide several value propositions that no other platform offers at this time beyond the creation of liquidity for longtail crypto assets.
The protocol also provides market reentry channels and price exposure, reduced risk of prices falling due to synthesis, expansion of investor population on the long-tail crypto asset community, and price discovery functions.
The liquidity protocol has been built on top of Binance Smart Chain (BSC) and Huobi ECO Chain (HECO), which allow it to offer higher performance at lower prices than protocols built on the Ethereum network while also providing better scalability in the long term.
By using the Liquidify liquidity accelerator to mint LAT and LFY tokens in combination with Liquidify Long-tail Crypto Assets Pool, users can collateralize any ERC-compliant token by taking advantage of the protocol’s Oracles to establish prices in the process.
While only ERC-20 tokens will be supported to start with, the development team expects to add more tokens in the future.
LAT and LFY: The Ying and Yang of Liquidify
As previously mentioned, Liquidify uses two different tokens to provide users with its functionality: Liquidity Accelerator Tokens (LAT) and Liquidify Tokens (LFY).
LAT is an ERC-20 token issued by the protocol in which prices will be anchored to the assets composing the portfolio locked into the liquidy crypto-asset pool, allowing users to then redeem it to recover the locked assets.
The LAT token will take on DEX liquidity mining, LAT staking, payment of platform fees, and “entry tickets” for participating in asset collateralization functions, which will make it operate as the fuel behind the protocol.
LFY on the other hand will operate as the governance token of the platform, being issued as a reward for interacting with the protocol and allowing holders to take part in the decision-making process by granting them voting and proposing privileges.
The Team Behind Liquidify
Liquidify’s development team consists of 20 members with ample experience in the tech and blockchain industry.
The team includes winners from the Google coding champions, Binance’s Hackaton, and multiple members who have worked for Fortune 500 companies such as Microsoft, IBM, Google, etc.
The project’s executive team consists of 5 people with a combined experience of over 60 years in the technology industry and 20 years in the crypto market, which has provided them with different insights and inside knowledge of the needs of the industry.
Despite the diverse backgrounds in the industry, the development team behind Liquidfy agrees on two basic principles that drive their work on the project: That markets live and die by liquidity, and Liquidify can be the battery that drives that liquidity to boost the ecosystem.
The project has also partnered with companies and projects like Blockchain Wave, Binance Chait, XBOT EX, and Huobi ECO Chain, to improve their features and reach to create new investment opportunities for crypto enthusiasts around the world.
The Future of Liquidify
While Liquidify is still a new project when it comes to development, the team behind it has already established goals for what the project will look like during the next year, all of them based on credible deadlines.
The protocol’s beta platform is expected to be launched in April of 2021 and will see the deployment of the Collateral Synthetization feature, which will transition the official Liquidify 1.0 stable version launch later the same month.
Version 2.0’s Beta will be launched in May and will see the addition of Long-tail Asset Pool syncretization with extended multi-token allowlist, which will provide added flexibility to protocol users. The stable 2.0 version is planned to be launched in June.
Lastly, the beta for Version 3.0 will be launched sometime in August with the addition of more flexible asset pool setup rules, which will then be launched as a stable version in October of 2021.
During all this time, the Liquidify team will also be working on promoting the platform and implementing new features depending on the needs of its users, as well as establishing new partnerships.