Welcome to this post, where we are going to see how Vires Finance, the main lending protocol of the Waves network, works.
Vires Finance has become very popular due to the rise of Waves, being the main lending protocol and with good annual % for depositing funds on this platform. It is a fork of AAVE, the #1 lending platform on DEFI. So if you have used AAVE, the operation is the same on this platform.
What is Vires Finance
Vires.finance is a decentralized non-custodial liquidity protocol based on Waves Blockchain, where users, wallets and dapps can participate as depositors or borrowers. Depositors provide liquidity to the market for passive income, while borrowers can borrow on an overcollateralized basis.
Vires.finance uses common pool-based mechanics in which all deposited funds participate equally in interest-bearing activities. Being based on Waves Bockchain, it uses extremely low fees (~only a few cents per transaction), which makes it very attractive for both high and low volume deposits and loans.
The operation is the same as AAVE being a fork of this platform, but on Waves. With the main tokens available such as WAVES, USDT, USDC, USDN, EURN, BTC, ETH.
You will be able to deposit funds on this platform to borrow with over collateral. Which means that if you deposit $100 in USDT, for example, you will be able to borrow up to $50 of another cryptocurrency. This is an example, and each platform has a % of over collateral, so you may be able to borrow more than $50 with $100, but you will never be able to borrow more than the amount you deposit.
The supply option allows us to deposit funds and get an annual %, which comes from people borrowing and paying interest on it. In addition to getting that annual %, we can use that amount as collateral and also borrow another cryptocurrency if we want.
In markets you can find all the relevant information before depositing your funds. As it is total supply the total amount deposited in each cryptocurrency, the annual % you will receive in supply apr. On the other hand, you will also be able to see in total debt the amount borrowed from that cryptocurrency and the annual % you have to pay for borrowing.
To deposit funds, click on supply of the cryptocurrency you want. Here, we will indicate the amount in supply, you can leave marked use as collateral or if you do not want to use it as collateral, uncheck that option. Check all the information and click on supply. Confirm in your wallet and you are done.
Keep in mind that the annual % that you can find in supply APR usually varies a lot, so do not expect that it is a fixed % that you are going to get all year. With this, you will already have your cryptocurrencies deposited in this platform and getting a profitability for it.
With the cryptocurrencies deposited, now we can borrow another cryptocurrency, or the same one if there is a positive % between depositing and borrowing.
To do so, we will go to borrow the cryptocurrency we are interested in. Here, we will indicate the amount, and we will be able to see relevant information such as borrow APR which is the % we will have to pay for borrowing as interest. The rewards in Vires for borrowing, as the platform to encourage users to use it, distributes its token to users who participate in it, either by depositing funds, or borrowing.
In market available, you will be able to see the available amount of that cryptocurrency. Sometimes, there is no more amount to borrow of that cryptocurrency, and you will have to wait for new users to deposit that token to be able to borrow. With the amount indicated, all you have to do is click on borrow and confirm the transaction in your wallet.
In this way, you will already have your cryptocurrencies generating an annual % for depositing, and you can use it as collateral to borrow another cryptocurrency. Always take into account the health factor to avoid being liquidated and losing your deposited cryptocurrencies. So if you want to borrow, I recommend you always ask for an amount with little risk of being liquidated if the cryptocurrency drops in value.
Finally, you will be able to block the platform’s native token, Vires in exchange for an annual % as staking. Unlike other platforms, here you will only be able to block your Vires in exchange for the rewards you can see.
The estimated time that your tokens will be blocked is 8 months, so after this time, you can have your tokens back to sell them or put them back in staking. The APR is currently 208%, so it really encourages you to lock your tokens by having a fairly high annual %. By locking your tokens you will receive the gVIRES token that will allow you to vote on the platform for new proposals and changes.
I hope it has helped you to learn more about how vires finance works and all that it can offer you in the Waves network. Remember that if you don’t have an account with binance, you can create one just below.