RAMP DEFI — Unlock Liquid Capital from Your Staked Digital Assets
The DeFi Landscape
The growth of the decentralized finance (DeFi) ecosystem in 2020 has been explosive, despite DeFi being an almost unknown concept in 2019. According to data from DeFi Pulse, while it took close to two years for DeFi deposits to reach USD1 billion in Total Locked Value (TVL) as of Q4 2019, it took less than six months (March to July 2020) for DeFi TVL to spike from ~USD550 million to ~USD4 billion (~727% increase).
DefiPulse snapshot as of 1 August 2020.
The continued launches of innovative products with attractive returns in the DeFi ecosystem are expected to sustain DeFi’s exponential rise, with more and more market players observing with increasing clarity that the DeFi market, dubbed as the “Internet of Money”, is poised at the brink of an unprecedented bull run.
The Staked Capital Problem
DeFi innovation is largely happening on Ethereum, underpinned by the major lending and borrowing platforms such as Compound and Aave, and to a large extent, powered by widely-adopted stablecoins (USDT, USDC, TUSD and DAI).
This means that DeFi participants typically need a pool of stablecoin capital on the Ethereum network to participate in “yield farming”, which arises from one or more of the following activities: (i) interest generated from lending and borrowing activities; (ii) provision of deposits into liquidity pools; and (iii) farming of DeFi project tokens.
While this growth of DeFi on the Ethereum network is extremely exciting, a large group of users have been unable to participate effectively, or even been excluded, from Ethereum-based DeFi participation. These users are users who have capital invested into digital assets outside of the Ethereum ecosystem (non-ERC20 digital assets), and are either anticipating capital gains on this portfolio, or have these assets staked into the respective staking ecosystems.
Should these users wish to participate in DeFi without injecting additional fresh capital, they need to exit their existing positions, and swap into widely-adopted ERC20 stablecoins (i.e. USDT, USDC, TUSD or DAI). This is sub-optimal, as these users can no longer participate in any future capital gains or the staking rewards that may accrue to their staking portfolio.
The RAMP Solution — Liquidity “On/Off Ramp” Across Blockchains
RAMP DeFi proposes that the staked capital on the non-ERC20 staking blockchains be collateralized into a stablecoin, “rUSD”, which is issued on the Ethereum blockchain via a gateway bridge. Similarly, users on the Ethereum blockchain can mint “eUSD” by depositing their ERC20 stablecoins into RAMP’s eUSD liquidity pool.
rUSD holders and eUSD holders can borrow, lend or exchange rUSD/eUSD freely, creating a seamless capital “on/off ramp” for users with capital locked into staking arrangements.
Benefits for Ecosystem Users
The benefits for a rUSD holder are multi-fold:
- Unlocking staked capital held in the form of non-ERC20 digital assets;
- Access to trading or investment opportunities requiring the use of ERC20 fiat-equivalent stablecoins without needing to inject more capital;
- Continue receiving staking rewards, even after minting rUSD;
- Retain capital appreciation potential of collateralized portfolio; and
- Farming of RAMP tokens by committing their digital assets as collateral for rUSD issuance.
An eUSD holder will derive value from:
- Interest generated on lending;
- Optimized yield farming across the global yield pools;
- Enhanced yield from potential farming of other DeFi tokens; and
- Farming of RAMP tokens by committing their digital assets as lending liquidity.
RAMP DEFI — Market Size Estimates
The market cap of value locked in Proof-of-Stake (PoS) staking as of 31 July is USD13.7 billion (data source: StakingRewards.com). If we assume the unlocking of just 1% of this staked capital, the implied TVL of USD137 million will propel RAMP DEFI into the top 10 DeFi platforms globally by TVL.
The current market leader in DeFi is MakerDAO, which uses Ethereum-based digital assets as the underlying collateral for DAI stablecoin issuance, with USD1.2 billion of value locked (representing ~30.5% of the global TVL) as of 31 July 2020.
Staking Market Data from stakingrewards.com
Blockchain Foundation Partnerships
RAMP DEFI aims to work directly with existing blockchain foundations to deliver the RAMP solution for their users.
Official blockchain partners can potentially gain from multiple angles:
- Allowing their users immediate access to the broad, global DeFi ecosystem without needing to unstake or exit the native digital asset;
- Increase the existing staking ratio by providing an additional utility use case for the native digital asset;
- Enhanced digital asset stability through users’ commitment to ensuring that their positions are sufficiently collateralized;
- Allowing their users to leverage on existing capital without any additional capital injections; and
- Issuance of a collateralized native stablecoin, which can be used to independently adopted within the partner’s native ecosystem.
In the evaluation of potential blockchain partners, RAMP DEFI recognizes that the collateralized assets need to be sufficiently liquid with reasonably high trading volumes. As such, RAMP DEFI, in its initial stages, shall only work with blockchain partners that have substantial daily trading volumes, and are listed on the leading global exchanges (e.g. CoinBase, Binance, Huobi, etc).
RAMP DEFI already has multiple blockchain partners on board, which shall be announced in due course. Stay tuned!
Join the RAMP Community
If you are interested to follow RAMP DEFI and get in touch with the project team members, you can participate and receive timely updates from the following official channels:
- Twitter: https://twitter.com/RampDefi
- Telegram: https://t.me/rampdefiofficial
- LinkedIn: https://www.linkedin.com/company/rampdefi
- Discord: https://discord.gg/WY5TU7b
- Medium: https://medium.com/rampdefi
