Altitude, a Decentralized Finance (DeFi) protocol offering the first-ever actively managed collateralized loan that uses the uncertainties of the value of the investment to repay itself over time, has closed a round of funding from a number of well-known investors actively engaged in the Web3 space.
Decentralized Finance (DeFi) loans are typically secured by collateral, therefore it’s standard practice for cryptocurrency investors to utilize their holdings (such as bitcoin, ether, etc.) as security and borrow against them.
Danish Chaudhry, Benedikt Schulz, Batuhan Dasgin, Dermot O’Riordan, Fabian Wetekamp, Evgeny Gokhberg, Georgi Georgiev, Lyuben Belov, Kay Meyer, Winslow Strong, Xin Wang and many others were among the investors.
This enables long-term supporters of cryptocurrencies to maintain the integrity of their investment portfolio while also releasing liquidity.
The legendary volatility of the cryptocurrency markets is the major obstacle to using crypto assets as collateral.
It is common for the price of bitcoin to change significantly up and down in a single day. If the price falls, the loan can end up being under collateralized and liquidated.
Such liquidations are common given the ongoing volatility of the cryptocurrency markets, therefore borrowers must exercise extreme caution when deciding how much collateral to put up as security for their loans.
The trade-off is their capital efficiency, or how well they can borrow against their holdings, while balancing that against the risk of liquidation.
The second difficulty with borrowing in DeFi is that interest rates can vary between lending platforms, which means that a borrower may borrow from one lending platform only to discover that the rate has dramatically increased the next day compared to other rates.
Altitude is a protocol, not a lending platform, that administers loans and collateral across the top DeFi systems.
When someone uses Altitude to borrow money, the protocol actively manages the loan and collateral in real time according to market conditions to maximize the loan.
When a borrower uses Altitude, the protocol immediately searches the top lending platforms for a lower interest rate and, as soon as it finds one, automatically refinances the loan so that the borrower is always paying the lowest rate possible.
On the subject of collateral, the protocol keeps track of the value of the provided security, and even though the loan is excessively collateralized, it automatically engages unused collateral to produce yield by allocating funds to pertinent platforms that offer yield.
The protocol automatically adjusts to keep a healthy Loan-to-Value ratio if the value of the collateral drops, and it deploys more money as the value of the collateral rises to produce higher income.
The yield produced by the protocol is ultimately utilized to lower borrowers’ loans, thereby automating debt repayment over time.
Individual borrowers are never exposed to the entire gas fees because the capital is maintained as a vault, which makes rebalancing across lending pools and yield platforms effective even for tiny borrowers.
Altitude transports money between protocols to reach high levels of capital efficiency through automation, and this is only achievable because Decentralized Finance is trustless and composable.
The money will be utilized to increase the size of the Altitude team and carry out further protocol development.
Collateralized loan positions are actively managed by Altitude, allowing you to concentrate on other, more crucial aspects of your life.
There is no financial risk to you while using the Altitude procedure because your debt is financed by one of the top pools at no cost to you.
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