Timeswap Protocol
First oracle-less money market Protocol powered by Polygon
What you never knew about timeswap
This is a money market Protocol founded by Ricsson Ngo, Harshita Singh, Ameeth Devada.
On timeswap, you don't need kyc or other stressful methods of identification before you can participate or use its protocol. There is no permission to join
Timeswap developed a system where they don't need an agent or series of codes to mediate between their on-chain and Off-chain(real-world occurrences) data.
Timeswap is the first fully permissionless, oracle-less, non-liquidatable, fixed-maturity lending & borrowing protocol.
Timeswap aims to revolutionize money markets via its unique 3 variable constant product AMM
A money market Protocol acts like a bank. Your deposit and lock your money and someone else comes to borrow it. The reward for depositing and locking is the interest. It's a set that seeks to lend and borrow to users for a SHORT time.
HOW DOES IT WORK?
It uses a three-variable constant product automated market maker algorithm similar to Uniswap for the interest and collateral calculation. Interest amounts to be paid are known upfront at the time of initiating the transaction.
There are three parameters in the timeswap pool. The lending, the borrowing, and the fixed maturity. Timeswap only interacts with ERC20 tokens or tokens built on Ethereum.
When the LENDER interacts with the lending vault, they deposit their ERC20 token and lock it for a fixed time, let's say for 30,60, or 90 days. On maturity, they collect their principal (The money originally invested or loaned, on which basis interest and returns are calculated) plus interest.
When the BORROWER interacts with the timeswap vault. They deposit their collateral ERC20 token A and lock it for a fixed amount of time, let's say, 30,60, or 90 days. Then can they withdraw the amount they want to borrow, ERC20 token B. By maturity, they then pay the principal, which is the money they borrowed, and also pay interest too.
The interest the borrower paid to the vault will be distributed to the lenders as a yield. If in any case borrowers couldn't meet up to maturity time, their collateral will be distributed to the lenders as yield.
There are liquidity providers that act as lenders and borrowers combined. They deposit token A so that there is liquidity for borrowers and lock token B as collateral with token A as debt, to back future claims for lenders to receive. The protocol can be used to lend and borrow any combination of ERC20 tokens.
WHY DO PROJECTS USE TIMESWAP PROTOCOL?
IT FACILITATES DEBT FINANCING: Projects that need money to keep their vision moving can borrow ERC20 tokens such as DAI or ETH from timeswap and give their governance tokens as collateral.
It is a sure less dilutive means of fundraising and provides the benefit of leverage compared to equity funding.
Another powerful use case is REPUTATION-BASED FINANCING. One can create an effective
reputation system based on some community, free markets, or group-driven mechanics, like a personal token system, or credit score token system. Social tokens can be looked at as another version of this personal token system. This explicitly casts value into the reputation of individuals, groups, or organizations. These ERC20 tokens can then be used as collateral, to borrow DAI or ETH, or any other ERC20 token. This is essentially an under-collateralized loan, which opens up the possibility of unlocking value that was previously not possible...
Another use case is borrowing using NFTs or ERC721 tokens. Owners fractionalize ERC721 tokens into fungible ERC20 tokens which can be used as collateral. This gives NFT holders the ability to leverage the value of their NFTs, especially for high-value NFTs, as they tend to have higher acceptance as a store of value by lenders.
LP tokens from liquidity pools of many different DeFi protocols can be used as collateral
which is another powerful use case. Liquidity financing gives liquidity providers the
opportunity to take advantage of their investment that may not be utilized as much in
other DeFi pools.
Just like how Uniswap is especially valuable as an exchange system for the long-tail exotic
tokens, Timeswap will be valuable as the lending, borrowing, and collateral system for
those exotic tokens.