Genius Loans, a revolutionary offering from MELD, redefine the traditional loan structure by introducing the concept of self-repayment. Through leveraging the decentralized nature of DeFi and the unique capital efficiency of the MELD protocol, Genius Loans enable users to repay their loans automatically using the yields generated from their supplied assets.
Yield Boost, a cornerstone of the MELD protocol, makes Genius Loans possible. By staking unused liquidity in the MELD vaults, suppliers can experience more capital-efficient loans than most competitors in the market today. This innovative approach turns 'idle' assets into a source of continuous yield for suppliers, irrespective of borrowing demand.
Mechanics of Genius Loans
The Genius Loan mechanism is both straightforward and innovative. Users supply cryptocurrency as collateral to take out a loan. If they choose the Genius Loan option, the yield generated by their collateral is used to automatically pay down their loan debt.
A user starts a Genius Loan with $100 of AVAX supplied at a 7% yield and borrows $50 USD at 4% interest. Over a year, the collateral generates $7 of yield. After the interest of $2 is paid, the remaining $5 automatically repays part of the debt. This process repeats each year, gradually reducing the debt until it's entirely paid off, solely through the yield generated by the collateral.
Advantages of Genius Loans
Genius Loans offer a unique opportunity in the financial industry, delivering a loan that repays itself by utilizing supplied yields and yield boost. This model, unique to the MELD protocol, enables efficient use of crypto assets and provides a method for debt repayment that requires minimal user intervention.
Automation and Compliance
MELD prioritizes user convenience and regulatory compliance. All parts of the Genius Loan process are automated, including the necessary KYC/AML procedures. This automation not only ensures a seamless user experience but also aligns with regulatory requirements.
The Genius Loan product by MELD represents a monumental step forward in DeFi lending. It harnesses the power of DeFi to offer self-repaying loans, providing a highly capital-efficient and profitable way for users to leverage their cryptocurrency assets. Through complete transparency and auditable terms, Genius Loans underline MELD's commitment to bringing innovative, accessible, and secure financial services to the blockchain space.