Nolus Protocol has launched an innovative decentralized finance (DeFi) product called the “DeFi Lease,” aiming to address common risk management challenges in the DeFi sector. With features like interest-free leverage and advanced risk controls, Nolus seeks to redefine borrowing, lending, and asset management in the DeFi and reinsurance spaces.
DeFi has emerged as a transformative alternative to traditional financial systems, allowing users to borrow, lend, and invest without intermediaries. However, despite its advantages—such as increased transparency and accessibility—DeFi lending platforms face significant risks, particularly when users leverage their positions in volatile markets.
The absence of robust risk management systems often leads to full liquidations during rapid market shifts, forcing borrowers to sell at a loss and exacerbating the complexities of managing fluctuating interest rates and trading slippage.
Nolus Protocol addresses these challenges by bridging traditional finance (TradFi) and DeFi. Central to Nolus’s approach is its innovative “DeFi Lease” model, which enables users to gain exposure to assets with minimal upfront capital.
This allows borrowers to leverage their holdings while mitigating the risks of margin calls and full liquidations.
Key features of Nolus Protocol include:
- 150% Financing with Collateral: Nolus offers up to 150% financing based on collateral, providing users with increased flexibility and security. This minimizes margin call risks and enhances potential investment returns.
- Interest-Free Leverage Promotion: As part of a limited-time promotion, Nolus is offering interest-free leverage until Nov. 1. This temporary incentive allows borrowers to maximize their returns without incurring interest costs, providing a unique opportunity for users to benefit from zero-cost leverage.
- Global Liquidity Pools: Nolus operates global liquidity pools, enabling borrowers to access funds for leveraged positions. By sourcing assets from liquidity providers, users can control more assets than their initial capital allows, expanding their investment potential.
- Partial Liquidation Mechanism: A standout feature of Nolus is its partial liquidation engine, which minimizes the risk of full liquidation during market volatility. Instead of liquidating the entire position, Nolus performs partial liquidations, allowing borrowers to retain a portion of their assets. This reduces losses and protects liquidity providers from significant exposure.
- Fixed Interest Rate Structure: Nolus employs a fixed interest rate system linked to the utilization of its liquidity pools. As utilization increases, interest rates rise, but they are capped at a set threshold to prevent excessive borrowing costs. This offers borrowers more predictable and transparent costs compared to the variable rates commonly found on other DeFi platforms.
- Onchain Liquidity and Slippage Management: By sourcing assets from decentralized exchanges, Nolus ensures that borrowers can manage slippage and onchain liquidity. Higher liquidity reduces slippage, leading to lower overall costs when executing trades or maintaining leveraged positions, further enhancing the cost-efficiency of the “DeFi Lease” model.
Nolus Protocol stands out by offering a more secure and flexible financial model than traditional onchain leverage protocols. With its combination of 150% financing, fixed interest rates, and advanced risk management strategies, Nolus is positioned to become a compelling option for both borrowers and liquidity providers in the DeFi space.
