Saturday, July 13, 2024

ParaSpace to continue NFT lending as it rebrands to Parallel Finance

Must read

The protocol will expand to liquid staking and layer-2 solutions while retaining its NFT lending services.

1403 Total views

4 Total shares

ParaSpace to continue NFT lending as it rebrands to Parallel Finance

Despite rebranding to Parallel Finance for a greater focus on the decentralized finance (DeFi) ecosystem, the nonfungible token (NFT) lending protocol ParaSpace will continue to focus on its core product amid sector woes

In a conversation with Cointelegraph, Yubo Ruan, founder and CEO of ParaSpace (now Parallel Finance), explains that the protocol uses a combination of diversified liquidity pools, dynamic loan-to-value ratios, and price-discovery partnerships to mitigate the risks associated with high volatility, which can often result in a lack of bidders on the underlying asset. 

“Despite the market downturn, we believe NFT margin lending remains viable,” said Ruan. ” It serves a niche yet growing sector of collectors and investors looking for leverage in their investments.”

During the past year, NFT trading volume has plunged by 99% from its peak in May 2022, although there have been signs of stabilization with blue chip collections. “In the near future, we see the implementation of NFTs as digital passports that enable access to both virtual and real-world utilities,” Ruan commented. “Also, we’re looking at the evolution of soulbound tokens that serve as non-transferable proofs of experience, skill, and reputation.”

As the protocol rebrands to offer a greater variety of DeFi services, Ruan says the two main focuses are liquid staking and Parallel L2. Along with the stated aims of achieving fast transactions with low gas fees, Parallel L2 also incorporates zero-knowledge proofs and Arbitrum Orbi to optimize for security and scalability. Meanwhile, Ruan explains that the protocol is “exploring the possibilities of integrating liquid staking with NFT lending” to allow NFT holders to earn yield on their staked assets.

“Users receive a tradable derivative token, representing their staked investment, which can be traded or used like other crypto tokens. This approach addresses the typical liquidity challenge in staking, allowing users to engage in other investment opportunities without un-staking their assets.”

Ruan founded ParaSpace in 2022. Since then, the company has grown to a valuation of $500 million, with over 340,000 proclaimed users. It reached a peak total value locked of $900 million in May and subsequently merged with Parallel Finance in August.

We are still working in our SF office. Just want to give a quick update to our community @ParaX_ai @ParallelFi

1. Parallel/ParaX is one dynamic brand. ParaX is now Parallel (only a name change).

2. Apologies for the LTV confusion – fixed!

3. Pudgy Penguins Oracle & LTV…

— Yubo Ruan (@yuboruan) November 26, 2023

Related: How can NFTs transform daily life?

More articles

Latest article