Parallel Finance — the best in its field

The modern financial system originates in the distant past with the emergence of commodity-money relations between our ancestors. At first it was barter. People exchanged goods of their own production, but over time this form of exchange became inconvenient and impractical. Since it was often difficult to assess the equivalence of the transaction. Therefore, people began to look for an alternative to barter.
Thus, universal values appeared in different parts of our planet, for which it was possible to buy or sell any product. Rare shells, glass beads, bird feathers, stones, animals, grain acted as a universal unit of exchange. But over time, all these items lost their value, so they were not unique and were not rare enough.

The appearance of gold and silver marked the beginning of a new financial era. The development of new monetary relations has begun in all corners of the planet. The states began to develop the production of their own coins made of gold and silver. Then the first banks and banking began to appear.
The modern banking system has gone far in its development from the beginning of its origin, but the mechanism of work and the main goal remain unchanged — to become even richer and more powerful.

At first glance, the appearance of the banking system contributes to the development of the country’s economy and the well-being of its residents, but in fact, people’s savings and deposits are not in a very favorable position, which are often exposed to inflation, are not protected from economic crises and bank failures.
But in 2009, Bitcoin appeared, which was created as an alternative to the modern banking system. And for 10 years of the existence of cryptocurrencies, there has been a rapid development of a new economic model of digital assets. There are a lot of new projects that act as direct competitors to centralized financial institutions, namely banks. And one of these projects is Parallel Finance.
The birth of the gem

Information about the Parallel Finance project appeared in 2021, when the founder of the company Yubo Ruan attracted investments in the amount of $ 2 million from such large funds as Alameda Research, Polychain, Pantera Capital, 8 Decimal, Lightspeed, Breyer Capital, Web3 Foundation, Hypersphere, Halborn.
The Parallel Finance platform offers margin staking, an auction loan and an AMM curve for derivatives, which can significantly increase the efficiency of capital use for DOT and KSM holders.
Margin staking

The essence of margin staking is that users can simultaneously make a loan and staking their assets. This function is especially useful in the case when a user has thrown his DOT or KSM into staking, but wants to increase his profit by performing trading operations. Therefore, there is an opportunity to borrow and trade, doubling your profit. This creates a kind of alliance between stakeholders and creditors.
Insured staking
Proof-of-Stake blockchains use slashing (cutting) in order not to stimulate the dynamics of bad nodes. Users who have been nominated as validators experiencing slashing also suffer from this. Therefore, Parallel Finance protects against such risks by charging a small commission from each user who makes a staking, and redistributes this commission in the case of slashing. A specially created validator algorithm is responsible for this, which selects the most high-performance nodes, thereby simplifying the interaction of users with the platform.

The projected yield curve
One of the most important innovations on the Parallel Finance platform is a more efficient curve for interest-bearing tokens, such as xDOT, xpDOT, cTokens. This curve uses the future value of interest-bearing tokens, which reduces the slippage to zero. This allows you to simulate high liquidity with each swap. It also gives the user the opportunity to change percentage positions and exit them with the maximum possible value.

Parallel Finance also uses a three-way pool instead of two-way AMM pools, where the first consists of a native token, the second consists of a percentage token, and the third is a stability reserve. The stability pool works by insuring slippage on the AMM curve. Parallel Finance can insure slippage for swaps that use up to 1/6 of the pool. Swaps that use more than this percentage will get a slip.
Auction loans
Projects interested in finding DOT and KSM sources for their parachain crowdloans will be able to use Parallel as a coordination level without permission to request loans with a fixed or floating interest rate and encourage contributions themselves.

Parallel Finance will also solve the problem of the liquidity of users who have blocked their DOT and KSM to participate in crowdloans by offering the opportunity to tokenize deposits as purchased shares, so that depositors remain liquid for the duration of the contribution.
From all the above, we can conclude that the Parallel Finance project has a huge potential for development and to be very popular and successful among its users, as well as among projects that want to launch their own parachains. I really like the project, as it will be an integral part of the Polkadot and Kusama ecosystem.

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