Regardless of rebranding to Parallel Finance for a larger deal with the decentralized finance (DeFi) ecosystem, the nonfungible token (NFT) lending protocol ParaSpace will proceed to deal with its core product amid sector woes.
In a dialog with Cointelegraph, Yubo Ruan, founder and CEO of ParaSpace (now Parallel Finance), explains that the protocol makes use of a mix of diversified liquidity swimming pools, dynamic loan-to-value ratios and price-discovery partnerships to mitigate the dangers related to high volatility, which may usually lead to an absence of bidders on the underlying asset.
“Regardless of the market downturn, we imagine NFT margin lending stays viable,” mentioned Ruan. “It serves a distinct segment but rising sector of collectors and traders on the lookout for leverage of their investments.”
Through the previous yr, NFT trading quantity has plunged by 99% from its peak in Might 2022, though there have been indicators of stabilization with blue chip collections. “Within the close to future, we see the implementation of NFTs as digital passports that allow entry to each digital and real-world utilities,” Ruan commented. “Additionally, we’re wanting on the evolution of soulbound tokens that function non-transferable proofs of expertise, ability and repute.”
Because the protocol rebrands to supply a larger number of DeFi providers, Ruan mentioned the 2 essential focuses are liquid staking and Parallel L2. Together with the acknowledged goals of reaching quick transactions with low fuel charges, Parallel L2 additionally incorporates zero-knowledge proofs and Arbitrum Orbi to optimize for safety and scalability. In the meantime, Ruan defined that the protocol is “exploring the chances of integrating liquid staking with NFT lending” to permit NFT holders to earn yields on their staked property.
“Customers obtain a tradable spinoff token, representing their staked funding, which could be traded or used like different crypto tokens. This method addresses the everyday liquidity problem in staking, permitting customers to have interaction in different funding alternatives with out unstaking their property.”
Ruan based ParaSpace in 2022. Since then, the corporate has grown to a valuation of $500 million, with over 340,000 proclaimed customers. It reached a peak whole value locked of $900 million in Might and subsequently merged with Parallel Finance in August.
We’re nonetheless working in our SF workplace. Simply need to give a fast replace to our neighborhood @ParaX_ai @ParallelFi
1. Parallel/ParaX is one dynamic model. ParaX is now Parallel (solely a reputation change).
2. Apologies for the LTV confusion – mounted!
3. Pudgy Penguins Oracle & LTV… pic.twitter.com/joHIepUXxh
— Yubo Ruan (@yuboruan) November 26, 2023
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