Meet Folks Finance: Pioneering the cross-chain DeFi Revolution from Algorand to EVM
The Genesis
Folks Finance, originally a lending protocol on Algorand, embarked on its journey with a clear vision, to build the best DeFi possible. Despite the challenging market conditions marked by the Terra collapse, Folks Finance persisted, fueled by a successful fundraising round and a rapidly growing community. Rapidly, it achieved a staggering Total Value Locked (TVL) of over $180 million, a testament to its ingenuity and the trust of nearly 10,000 monthly users.
Folks Finance's journey transcends its success on Algorand. The team, envisioning a future in a cross-chain ecosystem where boundaries between blockchains become increasingly fluid, set their sights on expansion. Their goal was to enter the Ethereum Virtual Machine (EVM) universe. By integrating Chainlink’s Cross-Chain Interoperability Protocol (CCIP), Folks Finance aimed not only to extend its reach but also to bring a transformative impact to the DeFi landscape.
Transitioning into a DeFi Hub
The transformation of Folks Finance from a lending protocol to a comprehensive DeFi hub marked a significant evolution. The platform's focus shifted towards simplifying the user experience, akin to what one might expect from centralized exchanges, but within a decentralized context. This shift meant prioritizing ease of use and accessibility, thereby broadening its appeal and functionality as a DeFi hub.
The Core: A Revolutionary Lending Protocol
Folks Finance’s interface
At the heart of Folks Finance is its innovative approach to lending. Recognizing the centrality of the lending protocol to its DeFi hub, which the team has concentrated on building around it. This approach has facilitated integrating multiple services around the lending protocol, forming a comprehensive DeFi experience.
Folks Finance's deposit feature enables users to provide liquidity, which is crucial for the platform's lending operations. By depositing assets, users directly support the lending process, creating a cohesive ecosystem where lending and liquidity provision work hand in hand to benefit each other. Users have the option to earn fixed or variable rates by locking or not their assets into Folks finance.
Customizable Loan System
One of the key attributes of Folks Finance is its adaptable loan system. This system allows users great flexibility in managing their loans, including the ability to use and interchange various collaterals and borrow multiple assets. Such versatility facilitates diverse options for loan repayment, as users can do it with multiple assets, not just with the one they borrowed.
Abstracting Complexity: How Folks Finance Redefines DeFi Lending Experience
Going cross-chain: A new endeavour
Folks Finance, in its progressive stride, is addressing two critical issues in the DeFi space: fragmented liquidity and inefficient bridging. With the integration of Chainlink technology, Folks Finance is innovating to build a cross-chain money market. This initiative is a strategic response to the challenges of isolated liquidity in separate blockchain spaces and the complexities of asset bridging.
The Dual Challenges in DeFi:
Fragmented Liquidity: The proliferation of Layer 1 networks and sidechains has led to liquidity being trapped in isolated pockets, making lending markets inefficient and complicating user interactions across different chains.
Inefficient Bridging: The difficulty in transferring assets between blockchains hampers a seamless DeFi experience.
Leveraging Chainlink, Folks Finance aims to unify these fragmented landscapes into a single, streamlined lending platform. This cross-chain approach will simplify user interactions across multiple chains, easing network selection and bridging processes, and reducing the friction of gas fees.
Hub-and-spoke model: Network abstraction for the user
Folks Finance designed its lending protocol as a hub-and-spoke model. This means that using Chainlink’s CCIP, the model has a hub chain, in this case Avalanche, that connects to multiple other chains.
Incorporating this model into Folks Finance's framework, the user experience is elevated to a level of seamless network abstraction. When users engage with the platform, they initiate interactions through a single chain, such as Arbitrum, for various activities like depositing assets or obtaining loans. Despite executing these operations on the Avalanche chain, the central hub of Folks Finance, from the user's perspective, their transactions and assets appear to seamlessly remain within the Arbitrum ecosystem.
This innovative approach masks the underlying complexities, presenting a streamlined and intuitive experience to the user, where their assets are perceived to never leave the familiar environment of their chosen chain, and by streamlining the process, users will only need to use Arbitrum’s gas token, eliminating the complexity of managing multiple gas tokens.
Meet the Folks Finance team
The Folks Finance team, comprised of professionals from diverse backgrounds, stands as a testament to innovation and expertise in the DeFi space. The leadership includes individuals with vast experience in blockchain project management, mentorship, and advisory roles in DeFi initiatives. Folks Finance results from extensive research and engineering conducted by Blockchain Italia, a renowned blockchain software house based in Milan.
The Folks Finance team have already proven to be able to build a leading DeFi app on Algorand. Following that success, they decided to expand even further to new EVM and non-EVM ecosystems and make Folks Finance even greater.
Where Chainlink meets Folks Finance
Folks Finance embarked on developing its cross-chain hub-and-spoke lending model, based on Chainlink's CCIP. This led Folks Finance to partner with Chainlink’s BUILD program. The program, supporting over 70 projects, provided Folks Finance with extensive resources and community support enhancing their developmental trajectory in the DeFi ecosystem.
Folks Finance will heavily rely on Chainlink’s CCIP for its cross-chain solution and in the coming future will use price feeds for its products on CCIP-supported chains, increasing their consumption of Chainlink services.
Conclusion
Folks Finance, initially a groundbreaking lending protocol on Algorand, has evolved into a dynamic, multichain DeFi hub, leveraging Chainlink's CCIP for expansive growth. With its innovative hub-and-spoke model, the platform offers a seamless, intuitive user experience, abstracting the complexities of cross-chain interactions. This strategic expansion, backed by Chainlink's BUILD program, marks Folks Finance's transition from a leading Algorand app to a formidable presence in the broader blockchain ecosystem where they hope to have a similar if not bigger impact.
As Folks Finance integrates Chainlink's services more deeply, it stands at the forefront of the DeFi evolution of becoming a platform where users’ experience is simplified, paving the way for wider DeFi adoption.
