By
Steve Muchoki
May 10th, 2024
As the cryptocurrency ecosystem matures, liquidity bridges like RAMP will play an increasingly important role in enabling interoperability between different chains and native yields.
Decentralized finance (DeFi) protocols and their applications are experiencing unprecedented attention and parabolic growth. Total Value Locked of staked USD currently exceeds $6.6bn, with no signs of slowing down. Indeed, last week’s yield farming flavour of the day ‘Yam Finance’ serves as a perfect example of the mania, with over $500m locked within 24 hours. Unaudited code and faulty rebase protocol programming resulted in $750k of lost funds and hundreds of millions wiped from its market cap.
With interest in DeFi, staking and yield farming reaching fever pitch, projects that increase access, safety and profitability for those looking to maximise their yield has never been more important.
Enter RAMP DEFI. Created to alleviate the capital inefficiencies associated with staking, RAMP DEFI aims to help cryptocurrency holders unlock the full potential of their staked capital through a novel cross-chain liquidity bridge, all whilst retaining staking rewards.
Efficient Capital Allocation
The biggest challenge often facing cryptocurrency investors is where to allocate their capital. The myriad of yield opportunities, alongside attractive speculative crypto investments, can be overwhelming. How do investors make the choice between staking yields and the opportunity cost of having their capital illiquid?
Staking Economy
With billions of dollars locked up within the staking economy, investors are struggling to efficiently balance investment allocations. Switching between different currencies and yields can be rife with potential pitfalls and transaction costs. Reallocating capital often means forgoing the compound interest accrued from the staked assets. To make matters worse, positive cryptocurrency price movements often happen quickly, making efficient capital allocation paramount in order to avoid unnecessary opportunity cost.
RAMP DEFI aims to facilitate the collateralization of staked assets, minting cross-chain stablecoins in order to enable value transference through their protocol bridge. Users will be able to mint either rUSD and eUSD by depositing their staked digital assets. Tokenized USD can be borrowed, exchanged, or lent; creating a seamless asset liquidity on/off ramp that is easy to manage.
By using this novel cross-chain liquidity bridge, stakeholders are able to fully leverage their assets in exchange for liquid capital, whilst retaining the underlying staked APR. RAMP’s liquidity solution via the issuance of rUSD/eUSD creates exciting opportunities for cryptocurrency yield farmers and holders looking to maximize their returns.
Role of Liquidity Bridges
As the cryptocurrency ecosystem matures, liquidity bridges like RAMP will play an increasingly important role in enabling interoperability between different chains and native yields. Without a way to efficiently recycle liquid assets from staked funds, cryptocurrencies and their underlying protocols run the risk of becoming awkward and less valuable. After all, cryptocurrency technology should be about enabling liquidity, not re-creating the legacy market’s siloed asset pools.
We’re likely to see an increase in the adoption of interest-generating assets, with people turning to advantageous yields, investment opportunities and protection from fiat inflation. Liquidity bridges will become an essential component of decentralized finance.
Team
RAMP is backed by a number of seasoned professionals, drawing on expertise honed within finance, artificial intelligence and blockchain. Their team members and advisors have previously served in leading organizations such as JPMorgan, Binance, Microsoft, Blackrock, and more.
Conclusion
RAMP DEFI is building an exciting, essential decentralized finance solution that focuses on unlocking liquid capital from staked assets. With cryptocurrency yield options ever-expanding and changing, seamless cross-protocol liquidity bridges will play an increasingly important role within the efficient allocation of staked capital.