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What is OnX Finance?
Over the last year we have seen tremendous growth on Ethereum for projects within the decentralized finance ecosystem, including Uniswap, Sushiswap, Aave, Curve, Compound, Yearn, and many others.
The OnX Finance team believes there is an important piece of the puzzle missing on top of the existing foundation - A DeFi hub specifically for collateralized tokens, which can be Liquidity Pool tokens, vault tokens, Liquid Staking tokens, Parachain Liquid Bonding tokens, and other reward-earning tokens.
The objective of OnX Finance is to enable DeFi users to easily benefit from yield farming opportunities combining collateralized tokens, Farming, Staking, Lending, Stablecoins, and Yield Aggregators/Vaults.
Staking is an important function of Proof-of-Stake protocols as it contributes for the security of the network in a more energy-efficient way than Proof-of-Work protocols.
Energy efficiency comes with a cost : capital inefficiency. Indeed, stakers are required to stake their tokens to validate transactions and earn staking rewards, without the ability to use the value of their staked tokens.
Liquid Staking is the solution to the capital inefficiency problem of Proof-of-Stake protocols. By tokenizing the value of staked tokens, Liquid Staking enable its users to benefit from enhanced financial flexibility and benefits from:
- Increased liquidity (Liquid staking)
- Borrow against Liquid Staking tokens
- Composable passive income (enable users to receive multiple layers of rewards on top of staking rewards thanks to yield farming)
- Simplify staking experience
- Enable trading opportunities (arbitrage opportunities)
- Creation of stablecoins backed by Liquid Staking tokens
Ankr, the first company enabling Liquid Staking on staked ETH in December 2020 and one of the strategic partners of OnX Finance, has been supporting the team with its know-how and experience to create products that leverage the benefit of Liquid Staking.
OnX Finance includes the following three core products:
- OnX Lending: Collateralizing Liquid staking tokens (e.g. ETH2 bonds) at fair value and borrow non-generating yield tokens (e.g. ETH)
- OnX Alpha vaults: Yield Aggregator automating yield farming strategies
- onSable: Composed of onEthereum (onETH), which is a ETH stablecoin based on ETH2 bonds, onStable token (onS), and the governance token of onStable.
OnX Finance is not just another yield aggregating platform or just another lending platform. The combination of vaults, lending, and stablecoins as an alternative and cheaper source of financing, are the main ingredients for OnX Finance's future product development to create yield generating products that generate enhanced yield in a sustainable way using smart leverage (without leveraging market volatility of tokens including in a specific strategy).