Unleashing the Power of Decentralized Finance: Exploring Arcus - A Gateway to Trustless BTC and BRC-20 Lending
🌟 INTRODUCTION:
In the ever-evolving landscape of decentralized finance (DeFi), Arcus emerges as a groundbreaking protocol that seamlessly bridges the security of Bitcoin Layer 1 with the versatile functionalities of decentralized lending and borrowing. In this article, we delve into the intricacies of Arcus, exploring its lending and borrowing mechanisms, benefits, and the revolutionary potential it holds for the broader crypto community.
📉 LENDING WITH ARCUS:
Arcus empowers users to become lenders by connecting their Bitcoin wallets to the protocol. Supported non-custodial wallets like Unisat provide a secure and user-friendly experience. By simply pressing 'Connect Wallet' on the Arcus lending page, users can deposit Bitcoin (BTC) or Bitcoin BRC-20 tokens such as ORDI into available lending pools, initiating the journey of supplying liquidity.
The variable yield earned on supplied assets is determined by the lending pool utilization, reflecting the ratio between the total borrowed amount and the total available liquidity. Higher utilization triggers increased yield rate incentives, dynamically attracting more lenders. During periods of low lending demand, when pools are oversupplied, yields decrease gradually, ensuring sustainability.
Arcus Lending Pools are designed to be over-collateralized, ensuring a minimum 150% collateralization ratio at all times. This robust model enhances the security of the protocol, mitigating risks associated with lending. Funds borrowed from these pools are backed by real assets, instilling confidence and trust within the Arcus ecosystem.
📈 BORROWING WITH ARCUS:
To leverage the borrowing capabilities of Arcus, users need to collateralize their loans with Bitcoin (BTC) or supported Bitcoin BRC-20 tokens, ensuring a minimum collateralization ratio of 150%. This safeguard protects lenders from default risks. After repaying the loan, users can withdraw their collateral, providing flexibility and security.
Borrowers can choose between varying loan-to-value (LTV) ratios, ranging from 155% to 200%, with higher collateralization securing lower stable interest rates. The interest rates, whether stable or variable, are influenced by factors such as LTV ratio, asset volatility, and current borrowing demand. Variable rate loans adapt to market conditions, charging higher rates during periods of high borrowing demand, while stable rate loans offer consistent interest.
🤝 CONCLUSION:
Arcus stands at the forefront of DeFi innovation, offering a decentralized platform that seamlessly integrates with Bitcoin Layer 1. From empowering lenders to earn variable yields to providing borrowers with flexible collateral options and interest rates, Arcus redefines the landscape of trustless BTC and BRC-20 lending.
• TWITTER: https://twitter.com/arcusbtc
• DISCORD: https:https://discord.com/invite/CKjB4wPv4a
• WEBSITE: https://arcusbtc.com/
