ROBO: Problems and Solutions for Defi

The evolution of decentralized finance has created a diverse financial ecosystem built directly on blockchains, which are transparent/verifiable through cryptography and pre-defined coding known as smart contracts. These platforms are redefining the structure of money markets without the need for a central authority or third-party decision-makers. In today’s traditional world, users will need to provide creditworthiness, provable income, and other factors for a lender to make a decision even when the user provides collaterals such as homes or cars.

Traditional lenders do not enable digital assets and cryptocurrencies to be pledged and used to receive loans or earn interest rates for providing them to the lenders and banks.

Robo is not the first protocol to help bridge these gaps between traditional financial lending into decentralized protocols on top of blockchains. There have been protocols that achieved this with billions in assets locked into the protocols. However, these protocols are primarily built on Ethereum, which has become costly, slow, and has caused pain points in user experience. These protocols also lack higher market cap assets such as XRP and Litecoin.

The current protocols are also heavily centralized such as Compound, where stakeholders and private equity funds seem to be able to control most of the decision-making and do not have a variety of other control mechanisms. Their distribution plan does not equate to decentralization.

Also, over $1 billion in Ether[3] are locked up in MakerDao Contracts that earn no value but come at a cost to those minting assets.

Lastly, in today’s landscape, a user who wants to use their assets to mint stablecoins must remove it from a money market protocol and lock it up in a smart contract with no benefit of the underlying asset as collateral.

Solution

Creating a protocol that enables a traditional money market tied into synthetic stablecoin generation will lead to accessibility and benefit of locked collateral. Robo will enable anyone to utilize a high-speed and low transaction cost blockchain by leveraging Binance Smart Chain [4] to supply collateral, earn interest on that collateral, borrow against that collateral, and mint BEP20 stable coins on-demand within seconds. These solutions all happen directly on the blockchain and may be utilized using a GUI. This protocol unlocks billions of dollars in value that are currently on-chains that have no lending markets such as Bitcoin, XRP, Litecoin, and more while enabling the participant to access liquidity in real-time.