How To Lend Your EOS For Interest
EOS is the native token of the EOS.IO blockchain, a high-speed smart contract platform.
EOS.IO is a high-throughput platform, which operates using a delegated proof-of-stake (dPoS) consensus algorithm. dPoS systems typically perform more transactions per second than proof-of-work (PoW) chains such as Ethereum, as only a handful of trusted nodes process transactions.
This is more efficient than using thousands of nodes for processing transactions, however also makes some sacrifices to network decentralization and security.
EOS.IO has no fees for sending or receiving transactions, but rewards nodes for processing transactions by providing them with newly minted EOS coins.
The project was funded via a year-long ICO, which raised a whopping USD$4 billion worth of Ethereum by the time it ended in 2018.
Although some concerns about remain about the security of the network, EOS.IO smoothly runs dApps and DeFi platforms due to its network speed.
EOS DeFi Lending Platforms & Dapps
EOSDT is a decentralized, EOS-backed stablecoin, which can be thought of as the EOS.IO’s version of Dai.
Each EOSDT token is pegged 1:1 with the US dollar, and is over-collateralized with EOS. The protocol runs via a smart-contract system called “The Equilibrium Framework.”
EOSDT utilizes a governance token, NUT, which is used to vote for changes to the protocol, pay for fees, and access liquidated EOS collateral.
One of the biggest differences between EOSDT and DAI is that collateral tied-up in EOSDT is re-invested, with interest distributed to EOSDT issuers.
EOS REX is a DeFi platform that was designed to combat the idle-resource problem in EOS.IO.
This problem stems from the fact that EOS holders who stake their coins are “reserved” network resources but don’t necessarily use them. Ultimately, this leaves much of the network under-utilized, causing unnecessary congestion problems.
EOS REX solves this by allowing users to lease their network resources to other users but maintain their coin’s voting rights and custody of the coins.
This exchange of EOS resources is facilitated using the REX token, which is used only for internal accounting purposes. REX is non-tradable outside of the platform.
EOS REX currently only permits 30-day loan terms.
Newdex is a Decentralized Exchange based on the EOS.IO blockchain.
It’s designed to enable the exchange of EOS-based tokens and assets without a trusted third party.
Newdex applies a flat 0.1% transaction fee across all trades. It does not take any listing fees from project developers, making it easy to launch a new project and have its token trade publicly.
To trade on Newdex, you only need an EOS account and wallet; there is no need to register.
Best EOS Exchanges
Coinbase is a cryptocurrency exchange headquartered in San Francisco, which has been around since 2012.
They’re a highly-trusted trading platform, well-known for their careful selection of supported assets, as well as compliance with regulations.
The exchange is user-friendly and perfect for newcomers, but there is also a more complex platform (Coinbase Pro) for more advanced users.
EOS Trading Volume: ~$0.9M (December 2019)
Number of EOS Trading Pairs: 3
Huobi Global is a Singapore-based exchange, which was originally founded in China in 2013.
The exchange boasts large trading volumes, and has offices across the world, including the United States, Japan, and Korea.
The platform has one of the highest EOS trading volumes of any well-established exchange, of over $42 million daily.
Unfortunately, Huobi no longer allows users from the United States to trade on their platform.
EOS Trading Volume: ~$79M (December 2019)
Number of EOS Trading Pairs: 6
Why Is EOS Great For DeFi?
EOS.IO can facilitate a huge number of transactions per second. This makes it quick and smooth for running dApps and DeFi platforms. In theory, the network should be able to manage liquidations of collateralized debt positions much more quickly and accurately than Ethereum.
While the volume of EOS DeFi activity and innovation still pales compared to that of the Ethereum network, EOS and other alternative networks could play key roles in making DeFi affordable and scalable.
Frequently Asked Questions
EOS runs on its own blockchain, EOS.IO, which is not directly compatible with Ethereum-based DeFi platforms.
To be incorporated into Compound Finance or another DeFi platform based on Ethereum, it would have to be issued as an ERC20 token, in a similar way to WBTC.
There are two key reasons which may explain this.
The first, is that EOS is a smaller platform than Ethereum, with a smaller market-cap, user base, and pool of developers.
Another possible reason is that DeFi users favor decentralization and security, over speed. dApps built on EOS tend to be those which are less dependent on decentralization and security, such as gambling games. Although Ethereum is slower, it provides more decentralization and security. This ensures that user funds in DeFi systems are as safe as possible.