By Michael Scott
Flux Finance announced the launching of a lending protocol compatible with the bond fund created by the Ondo government (OUSG). The firm revealed that OUSG represents a tokenized form of exchange-traded fund created on the blackrock treasury bond.
Decentralized Lending Protocol Accommodating OUSG
Flux Finance statement confirmed the introduction of a decentralized lending platform that would enable users to deposit DAI and USDC. The update portrayed Flux’s protocol as backed by OUSG. Depositors will abstain from fUSDC and fDAI as derivative rewards of the USDC and DAI within the Flux protocol.
Flux involves a fork linked with Compound that specializes in borrowing and lending services. By Thursday, February 9, Compound protocol’s holding estimated billions of dollars in the wealth of locked tokens.
Smart Contracts to Replace Intermediaries in Financial Services
The statement conveyed by the management portrayed Flux as a decentralized finance protocol that utilizes smart contracting when offering financial services. It eliminates intermediaries previously involved in executive lending and borrowing services. Besides eliminating intermediaries, Flux undertakes yield farming, where users receive tokens as rewards for injecting liquidity into a particular project.
A recent update conveyed by Flux clarified that users could utilize their fDAI and fUSDC holdings as collateral when borrowing. Also, the fDAI and fUSDC tokens as security for derivative protocols.
The firm observed that the Flux protocol mirrored the mechanism deployed by other liquid staking protocols. The statement indicated that the liquid staking protocols mechanism is evident in the Lido issue tokens. In particular, stETH illustrates the Ether staked within the host platforms in a matching ratio that could support yield farming.
Boosting Incomes Through Treasury-Backed Lending
The revelation of Flux investing in treasury-backed lending will boost incomes for users through interest earned from tokenizing government debt. The secondary stream of earnings will help navigate the struggle confronted by the leading DeFi platform in 2022. It offers secondary consolation for users concerned about the chaotic crypto market as the Fed sustains the hawkish stance to curb inflation by raising interest rates.
The introduction of the Flux lending protocol backed by treasury bonds coincides with increased DeFi activity in tokenized investments. Recently, DeFI Prime reported that the USDC lending rate increased by 1.68%. Also, TradFi neobanks announced 4% payouts for deposits, while Discover offers 3.3% and CapitalOne 3.4%.