Inverse Finance, which is considered to be one of the strangest experiences in the DeFi sector has just made an announcement for the crypto-industry. It was just recently announced by Inverse Finance that it was going to cut down the number of users that had been inactive on the protocol for quite a while.
After the culling of the inactive users, Inverse Finance has announced the launch of a new service. The firm has revealed that it is currently in the process of launching a new product that will be part of the stablecoin lending universe.
It was on Wednesday, February 24, 2021, when the firm had announced the launch of the new product. Inverse Finance has revealed that the name of the new stablecoin lending product is the Anchor Protocol.
The Anchor Protocol has been built around DOLA that will exist as a money market in the industry. The DOLA token will act as a synthetic stablecoin that will be native to the Anchor Protocol.
The founder of the Inverse Finance firm, Nour Haridy has confirmed that the Anchor Protocol has been based on the Compound fork but it has been modified. The founder has also gone onto compare the Anchor Protocol with Synthetix. The Synthetix Protocol is used for issuing credit to the users in the form of synthetic assets. These synthetic assets are backed by overleveraged collateral.
On the other hand, the Compound is essential for issuing credits that are in the form of cryptocurrency asset loans. These assets are also backed by the collateral which is overleverage in nature.
To summarize the above, Haridy views that both of the models tend to offer the same kind of utility to the users. Both the synthetic and lending protocols are known for providing the same kind of service. This is where Anchor Protocol comes in and successfully combines both protocols turning it into a new unified protocol essential for borrowing.
The Anchor Protocol is aiming to achieve this goal by introducing an architecture that will be unique in nature and mechanism. The architecture will be responsible for always dealing with DOLA tokens as $1 collateral.
The users will be able to use the DOLA $1 collateral whenever they need to borrow other assets. The users will be able to execute this without any difficulties despite the peg or market conditions of the DOLA.
The protocol would allow the users to deposit the collateral they would have in their possession. Then they will be able to carry out minting for the DOLA tokens. Then the users will be able to use the DOLA tokens in order to acquire loans for other cryptocurrency assets. If the users do not wish to acquire loans, they can simply go for yields through the DOLA tokens.