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Banks take a portion to invest a portion in Risky, Illikid Assets – this is what they make money.
This “Borrowed Short, Laund Long” business model is otherwise known as partial reserve banking. Everyone is happy until every depositor wants his money at once!
When the Sankat Mode hits and the users run to exit, the risk model of banks is put into the test.
The center of the problem has non-transparency around the liabilities of a bank and the available assets. You can theoretically avoid this problem if this information was visible, as you can cure your own risk model.
Enter Infinifi, a new Defi protocol on Etreum, which aims to repeat the entire pile of differential reserve banking onchain.
how it works:
- Users collect stablecoins for IUSD receipt stablecoin.
- For low risk yield, IUSD stake for SIUSD. This is liquid.
- For high risk yield, lock the IUSD for Liusd. This is Ilyakid.
Now the “differential reserve banking” component comes.
Infinifi Liusd deposes liquid transcends capital to low risk returns such as Aave or Fluid, while alternatively deployed SIUSD Illique Tranche in high risk returns strategies. (Governance will eventually be Tanna This decision.)
That accurate ratio is informed by the displayed preferences of the depositors and what option they select (SIUSD vs Liusd).
The result of positive amount? Get to distribute amplifted yields for infinifi Both If he personally chased his strategies if he personally pursued his strategies compared to groups of depositors.
Source: Insinififies
Based on the Infinifi website, whether you are choosing for a liquid (SIUSD) or Liusd yield, you get comparatively better yield than the underlying protocols.
This is a clean business model.
But what the infinifi is doing in itself – borrowing less and lending for a long time – not all that is usually different from banks.
Innovation comes from the fact that the entire stack is on blockchain.
It is that you, as a user, can sleep easily at night-you know that your bank is not pulling a Sam Bankman-Fride and pursuing uncontrolled lens against the most uncontrolled assets.
Infinifi’s reserved composition is a completely transparent onchain, so you do not have to rely on a quarterly call report.
You can easily see the USDC deposit and IUSD tokens against it, if any, to determine its exact asset-liability mismatch.
You can also check the breakdown of the yield strategies of the protocol, or whether the protocol is following by its liquidity buffers – below the amount and type of assets they are made of.
In the event of hack or “bank run”, a clearly coded damage waterfall will determine who is paid in order.
The highest yield and closed liusd tokee holders First In the firing line, the first absorbing damage.
SIUSD stakes (low yield, no lock) are hit only after being wiped out to lock users. Plain IUSD holders come final.
Nobody wants to see this, but users can at least get some relief in the fact that they will not have to wait two years as if FTX Depositors did.
Infinifi has attracted $ 33 million In tvil And six months running score The program was launched in early June.
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