🎓Academy
Equalizer Finance: The First Dedicated Platform for DeFi Flash Loan Markets
Flashloan

Equalizer Finance: The First Dedicated Platform for DeFi Flash Loan Markets

By Equalizer Team
January 7, 2022

Flash Loans are an innovative way for traders to get the cash they need when they need it. But what if you could make even more money with Flash Loans? With Equalizer Finance, you can do that and much more! Equalizer is the first platform dedicated to DeFi (decentralized finance) Flash Loans on Ethereum, Binance Smart Chain, and Polygon (MATIC) providing users with many different financial opportunities such as Yield Farming and Arbitrage.

DeFi Flash Loans and Flash Loan examples

Flash lending is a financial service in which users borrow and repay the money (with a very small fee) immediately, with no collateral needed. The term "Flash Loan" refers to a loan facility that is processed entirely within the same blockchain transaction. If the borrower fails to return the loan principal (including interest) during the transaction cycle, the deal is reverted.

Some common uses for DeFi Flash Loans are Arbitrage, Liquidations, Collateral Swapping, Portfolio Rebalancing.

  • Flash Loan Arbitrage is the practice of taking advantage of price differences of an asset between two or more markets. For example, if the price of an asset is lower in one market (decentralized exchange) than in another market, an arbitrageur can get a loan to buy the asset from the first market (DEX) and to sell it on the second market. This results in a profit for the arbitrageur.
  • Flash Loan Liquidation is the act of selling collateral in the case that a loan defaults. If this occurs, lenders can sell their borrowers' collateral to cover some or all of what is owed on the debt.
  • Flash Loan Collateral Swapping: With Flash Loans, you do not need to lock up your funds until repayment time comes around; however, if there is an opportunity to take advantage of higher rates across different chains, you can. For example, if you have ETH on Ethereum but want to lend it out on Binance Smart Chain (which has a lower interest rate), all you need is an intermediary with the opposite position. Then this third party will swap tokens for collateral and then back again; locking in your profit and giving you access to cash when you need it.
  • Portfolio Rebalancing: Due to volatile market conditions, the crypto assets portfolio might need to be rebalanced. In case of not available collateral, this can be done using flash loans to buy and sell the crypto assets needed to have a rebalanced portfolio.

Equalizer Finance brings profitable Flash Loans solutions to the DeFi market

With the booming DeFi market of $230 billion total value, Flash Loans crypto have become a profitable opportunity. The loan transaction volume is estimated to be $1 billion monthly.

Equalizer Finance is the first platform dedicated to DeFi Flash Loans. We believe that Flash Loans are not only a helpful tool but also a crucial element for a sustainable DeFi ecosystem, linked to its overall liquidity and DeFi exchange volume. Equalizer Flash Loan aims to provide the DeFi market with inexpensive and reliable uncollateralized loan crypto services.

The common uses for Flash Loans, such as arbitrage, liquidations, and collateral swapping, are critical for a smooth and steady DeFi market. The industry will require a dedicated player for Flash Loans like Equalizer to scale up.

Equalizer Finance advantages

  • Reasonable and dynamic fees vary between 0% and 1% and can be changed in real-time.
  • Lucrative incentive scheme for liquidity providers to secure a certain level of available liquidity in token vaults, even in high volatility conditions.
  • High compatibility with an unlimited number of tokens: Competitors are focusing on obtaining token listing fees, whereas Equalizer allows anybody to list tokens without charge. As a result, everyone can establish an Equalizer vault for any regular token.
  • Resilient and reliable regardless of market conditions thanks to the ability to focus only on Flash Loans services.
  • Standardized and open integration with other protocols in the market, combined with comprehensive and detailed documentation.
  • Infrastructure designed to allow for high-speed transactions, suitable for any trading strategies and capable of multi-chain and cross-chain interconnections.

Equalizer's governance model

Yield Farming (Liquidity Mining) is an incentivization scheme that encourages crypto holders to provide liquidity by locking them in smart contracts and earning a high annual yield. Equalizer offers users Yield Farming benefits through the governance token approach.

Token holders have voting power, thus influencing operational decisions including:

  • How many vaults will be available for Yield Farming
  • Which tokens can be accepted for Yield Farming
  • Flash Loan fees for different token vaults
  • The ceiling levels of liquidity in each token vault
  • Other decisions on the platform development

This article has provided you with some insight into DeFi Flash Loans and Equalizer's Flash Loans solutions for crypto investors. Stay tuned as we release more information about our project including detailed guidelines on Flash Loan explained and case studies on Flash Loans.

online