Hashstack launches Open Protocol Testnet, the first-ever under-collateralized DeFi loans

Hashstack Finance, a decentralized finance (DeFi) platform, has launched the first-ever under-collateralized DeFi loans protocol called Open Protocol. The Open Protocol aims at disrupting the DeFi space by allowing DeFi participants to get up to 3X the amount of the collateral.

The Open Protocol testnet marks a great milestone within the DeFi world where crypto investors are forced to deposit crypto assets worth more than the loans they are taking. It is also a significant accomplishment in Hashstack’s roadmap with the mainnet slotted for launch in coming weeks.

The Open Protocol

Open Protocol is an autonomous lending solution that allows users to access under-collateralized loans that are three times larger than the value of the used collateral. The ratio of collateral to loan is 1:3.

In a nutshell, it means that if a user wants to get a loan worth $300, they only need to have crypto assets worth $100.

Additionally, a user can withdraw up to 70% of the loan and use the remaining amount for in-platform trading capital.

After launching the Open Protocol testnet, the Hashstack Finance founder Vinay said:

“Today, if you want to borrow $100 on Compound, or Aave, or even MakerDAO, you are required to provide a collateral of at least $142. This breaks the primary intent behind loan procurement, and has restrictive use-cases for the borrower. In comparison, through Hashstack’s Open protocol you would be able to borrow the same $100 with collateral as little as $33.33. This 4.25x value-add against every established market player today, is a remarkable milestone for the DeFi ecosystem in general, and will drive further adoption.”

The Open Protocol gives crypto borrowers a glimpse of the future of DeFi lending. Anyone can access under collateralized loans for personal cash needs, for use as trading capital, or use as a leveraged investment in Initial DEX Offerings (IDOs)

Integration with other DeFi protocols

Hashstack integrates with other DeFi protocols like PancakeSwap to allow an in-app market swap to improve the utilization of the loans taken through the Open Protocol.

Open Protocol borrowers can swap the borrowed cryptocurrencies with other primary or secondary tokens without needing to switch platforms.

To begin with, the Open Protocol only supports highly liquid cryptocurrencies like BTC, BNB, USDC, USDT, and Hashstack’s native governance token HASH. It however aims at bridging crypto assets from different blockchains including Avalanche and Ethereum as it expands the list.

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Author: Charles Thuo