EFG dApp is a lending and borrowing platform which created by ECOChain team. It aims to make DeFi simple and accessible for everyone.
EFG is not a bank. It never holds your funds and never manages your funds. However, DeFi gives us some amazing options with the way that we control our own funds, loan them out, or borrow more. EFG dApp is a platform that enables this to be an intuitive experience while we generate excellent interest on our funds.
The smart contract architecture enables advanced financial exposure while maintaining control of your own funds without a middleman or counterparty.
At a traditional bank, customers deposit money, and the bank manages those funds to generate a return on the interest charged to the borrower. Banks typically make the largest portion of their revenue on lending. In the centralized banking model, the customer gives the bank funds, the bank lends out the funds, collects the interest, takes their cut, and pays interest (minus bank costs & revenue) back out to the original customer.
What if you could use smart contracts instead of a bank? What if you could let the middle portion of this lending process be run by machines that take fractions of a cut instead of large revenues that banks take?
This is the idea behind EFG dApp, and like other DeFi lending platforms, they create open lending and borrowing so users can skip the bank middleman, still retain a relatively low risk of losing their funds, and create a stable base for their own DeFi investment portfolios.
What cryptocurrencies does EFG dApp support?
Currently, EFG dApp supports 3 currencies; ECOC, EFG, and GPT which are developed form ECOC Blockchain.
What are the risks of DeFi platforms?
DeFi, and any such platforms such as EFG dApp has the main feature of being decentralized. Yet, it is decentralization that brings associated risks. This is because instead of trusting a central authority to supervise the transactions, we are trusting the code which the smart platform was built upon. If there is a mistake in the smart contract e.g. the conditions for release of funds are set incorrectly, there is no overriding body which can correct this mistake or any customer service representative that can help. And the biggest risk of all is if the developer did not code the contract correctly making it vulnerable to hackers.
Risks of using EFG dApp: EFG’s liquidation clause
For EFG dApp, there are risks associated with trying to earn EFG through borrowing on the platform. EFG has a liquidation clause that kicks in when borrowing on the platform. For instance, if the EFG you are borrowing increases in value and exceeds the value of your collateral, your borrowing account will become insolvent.
To prevent your account from liquidation, you can use GPT to delay the settlement of mortgage assets. So, if you deposit GPT, the delay process will start and end 7 hours later and the amount to be used will depend on the collateral amount. In the meantime, users can buy more EFG to redeem their collateral back.
GPT is designed through ECRC-20 standard and becomes the main factor in the protection of investors’ risk extension benefits in EFG’s lending behavior.
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