There are many products and services that are available in the traditional financial system but have not been introduced in the crypto industry yet. However, there is a project that is going to provide crypto holders with financial services modern people got used to receiving but without any intermediaries.
Equalizer Finance has become the first dedicated platform for flash lending, and now it offers a number of benefits to crypto enthusiasts. Would you like to learn more about them?
Look: this Equalizer Finance review will clear up all the points about this platform and the way it works.
Table of Contents
What is Equalizer Finance
Equalizer Finance is a next-generation decentralized flash lending marketplace that brings together borrowers and liquidity providers. It offers liquidity providers to get passive income for the tokens owned when they provide it as liquidity. This income is paid out in the same token proportional to the funds given by the Liquidity provider and the lending duration. As a result, borrowers that are also called arbitrageurs get access to the variety of liquidity tokens and use them for a variety of purposes including trading, executing market-marketing activities, and taking advantage of liquidation opportunities. However, not only borrowers but also 3-rd party apps get a number of benefits from the liquidity pools too. They can rebalance their portfolios and provide short-term collateral for DeFi services including lending, deposits, and interest swaps.
How does it work
Flash loans allow borrowers to take advantage of uncollateral loan options that must be returned in the same block transaction. If this does not happen, the transaction is reversed and it is a guarantee that funds are safe in the vaults. Flash loans can be used in several use cases described below too.
Problem and solution
It is easy to get a loan in a traditional bank, but where can you borrow cryptocurrency? Equalizer Finance platform was created with the goal to bring affordable and reliable flash lending services to the DeFi space. Flash loans are an integral part of the DeFi ecosystem and its main apps including arbitrage, rebalances, liquidations, and collateral swapping are required for its smooth operation. Furthermore, Equalizer can mitigate different financial exploits and other risks.
There is a number of features that prove that Equalizer Finance is designed especially for DeFi loans and these are the majority of them:
- Dynamic fees: flash loan fees are calculated on the basis of the governance votes decision or an algorithmic approach to find the right balance between offer and demand. They are big enough to attract more liquidity providers, and at the same time, they are low enough to be borrowed by arbitrageurs;
- Exclusive incentive scheme for consistent liquidity providers to stake their funds continuously even in case of the high market volatility;
- Infrastructure scalability that guarantees high transaction speeds;
- Unlimited number of tokens to select from since everyone can list them on the platform;
- Focus on the flash loans: this is the main service of the platform that is characterized by flexibility and adaptability to market changes;
- Easy and fast integration with other protocols, scripts, or bots in the market thanks to a standardized and open toolbox (API);
- Compatibility with any EVM-based blockchain and a plan to develop flash loan applications for any other chain supporting smart contracts too.
Lending and flash lending
Everyone understands the notion of the term “lending” and it is often associated with household things or financial and banking services. However, thanks to the appearance of the DeFi space, these services can be provided in a decentralized way using a blockchain infrastructure. The range of these services is quite various including savings and checking accounts, loans, asset trading, insurance, and others.
One of the latest trends in DeFi apps is flash loans. These are financial operations when one user borrows tokens and returns them in some time with an interest rate. However, if a borrower does not pay back the amount with interest rate within the transaction execution cycle, the transaction is reverted.
Flash loans have a number of characteristics that differentiate them from traditional loans:
- No risk for a lender;
- Limited loan size;
- No need for collateral to cover the risk.
Staking is a popular way of getting dividends by locking different amounts of tokens. However, it acts a little differently on Equalizer Finance.
Known as liquidity mining, this service is used in the DeFi market when users provide liquidity to exchanges and are rewarded for that. Users called liquidity providers should provide two assets to a given trading pair and they will receive LP tokens instead that can be staked in secure pools.
There are two staking pools offered on the platform and the reward depends on the length of the staking period:
- EQZ/ETH for 120 days with an annual percentage yield of 105%;
- EQZ/BNB for 120 days with an annual percentage yield of 105%.
Equalizer Finance use cases
There are 5 Equalizer Finance use cases:
- Arbitrage. This use case is interpreted as a trading strategy that takes advantage of different asset prices in the market. If there are different prices for assets on several exchanges, you can take a flash loan and buy them for less money and sell on the other exchange for more.
- Liquidations and self-liquidations. A person can flash borrow from one of the major platforms, payback on behalf of the borrower, release its deposit, swap it for the token in which the flash loan is taken, pay back the flash loan and gain the bonus. All this is done automatically by the flash loan smart contract.
- Collateral swapping. This is a mechanism when a borrowed asset can replace a collateral position even if the borrower cannot return the funds. Flash loans allow closing the collateral positions with borrowed funds and immediately opening a new collateral position with a different asset.
- Loans refinancing. If a user has a collateral debt position with a certain amount of loan taken out, he can flash borrow this amount, close out the Vault, deposit the remaining funds into Compound and use Uniswap to swap them into DAI which is used to pay back the flash loan.
- Flash minting. The idea hidden behind this use case is to allow instantaneous minting of an asset arbitrary amount, and the newly minted assets will exist only during one transaction to be burned at the end of the transaction cycle.
EQZ governance token
The native token to govern the Equalizer platform is EQZ. It represents the ERC20 token used for platform governance. The total supply of tokens to be minted by the platform is 100 million tokens. It will be distributed to the core team, advisors, early adopters, early investors and the rest will be for further development of the platform. Being not a financial instrument, the main role of this token is to fine-tune the platform parameters and adapt to the DeFi market evolution.
How to get EQZ
There are two ways to get EQZ tokens: to become a member of the community and get them as a reward or purchase coins on the exchange. Currently, EQZ is listed on three popular exchanges including Kucoin, Uniswap, and Pancakeswap.
Being an ERC20 and BEP20 token, EQZ can be stored in any compatible wallet that supports this kind of token. A few examples of wallets where EQZ token is already listed: Metamask, imToken and Trust Wallet. But any other ERC20 wallet is compatible by adding a custom token and using the smart contract address of the token: 0x1Da87b114f35E1DC91F72bF57fc07A768Ad40Bb0 .
Like any crypto project Equalizer Finance has its strengths and weaknesses, so let’s consider them.
- Usability and high platform speed;
- Clear step-by-step guides;
- Affordable and transparent fees;
- Wide range of tokens available;
- Multi-chain and cross-chain capabilities.
- No mobile app;
- Not yet launched in main-net.
What is Equalizer Finance?
This is the first platform to equalize the decentralized markets and offers risk-free flash loans on the blockchain protocol.
What makes flash loans beneficial?
They offer low fees, a wide variety of tokens, high liquidity, and multi-chain capabilities.
What is the role of EQZ?
EQZ is a governance token of the Equalizer platform that is used to provide an incentive for liquidity providers, stimulate the uptake and integration the Equalizer platform in other existing DeFi markets, and being a funding pool for R&D projects.
Can you stake EQZ?
There are two staking pools supported by EQZ but the main peculiarity of this token staking is doing that in pairs.
You won’t find many Equalizer Finance reviews since this project roadmap begins at the beginning of 2021 and currently, you can try only its mock-up. However, the description, use cases, and features of this platform say about its promising future and interest for potential investors.