WOLFABRA, $BIMB AND NODES AS COLLATERAL
INTRODUCTION TO WOLFABRA AND OUR VISION
We like to refer to Wolfabra as a powerful protocol that unlocks the limits that DeFi noders are currently facing.
The Team of Wolfabra realized the presence of a very big problem in DeFi: limited utility of nodes. At present time, Def-as-a-service protocols, namely Ring, Thor, and Soldier, opened the doors for very big opportunities for DeFi investors, however, they introduced some restrictions derived from their functionalities and mechanisms in the DeFi space. To give you an example, just Ring financial has approximately $70 M locked in nodes. When nodes are created, they generate rewards that vary depending on the protocol we are taking into account. By creating nodes, users are locking in their liquidity, hoping that the number of rewards generated will be substantially higher than the amount of the initial investment. In some cases, this appears to be profitable for nodes investors, but the game stops there …… with no additional capabilities and tools for liquidity lockers!
The Vision of the Wolfabra team is quite clear: our goal is to be a game-changer for users of passive income protocols. In other words, we want to make nodes work for you. Via depositing your nodes on our platform and using them as collateral to borrow a stable coin, $BIMB, you will be able to increase your exposure to your desired protocols.
Now that we have explained our view, let’s have a deeper look into the Wolfabra protocol and $BIMB.
Currently a lot of Defi-as- a- service protocols have locked in the capital in nodes, capital that users own but they can’t use.
Examples of protocols currently facing this situation:
- Ring Financial
- Thor Financial
- Soldier Nodes
- Comb financial
- Vapor Nodes
- Boson DAO
- Rail Nodes
Note: This is just a sample taken from a large space of forks.
Wolfabra will initially partner with our nodes protocol: Wolf Nodes. The partnership with our protocol will serve as a test for this project and, given our future success, we will then expand our network to other Defi-as-a-service protocols. This will be done to introduce additional nodes or assets to our platform. If more nodes will be deposited on the Wolfabra protocol, the additional utility will be brought to noders. Protocols will face huge benefits as more nodes will be created via borrowing $BIMB and exchanging it for other desired tokens. If you want to learn more about Wolf Nodes, you can refer to our previous Medium article.
In the initial stage of the protocol, Wolf noders will be able to deposit their nodes and borrow $BIMB against the collateral. Over the week, we will release additional articles and the whitepaper which will explain in more detail specific parameters, such as maximum collateral ratio, interest, liquidation fee, borrow fee, liquidation price, and much more.
Now that you understood the fundamental of the Wolfabra protocol, I will drive you to step by step on how the protocol will initially operate.
WOLFABRA: A STEP BY STEP GUIDE INTO THE PROCESS
Step 1 — LIARS (Wolf Nodes) are deposited in the Wolfabra platform
Step 2 — Noders borrow $BIMB against the deposited LIARS (See parameters before taking action)
Step 3 — $BIMB tokens are deposited into the borrower’s wallet.
Step 4 — Users can exchange the $BIMB tokens for whatever they like on PancakeSwap
The process can be reversed by repaying the debt taken and interest charged. The repayment of debt plus interest will allow users to regain access to the collateral previously deposited.
THE $BIMB TOKEN
$BIMB token is a USD pegged stable coin that is backed by nodes and other interest-bearing assets. I know, it sounds a bit crazy because it has never been done before…. A USD pegged stable coin backed by nodes and interest-bearing assets!
$BIMB tokens are minted by multisig holders on the Binance Smart Chain. Once they are backed by the required collateral, they are released into circulation. As a result of $BIMB’s pegging mechanism, 1 BIMB= 1 USD. It might be that under specific circumstances, the price of $BIMB won’t be trading at exactly $1, which will make arbitrageurs take advantage of this opportunity and bring the price back to peg. Initially, $BIMB will be backed by $WOLF tokens, WOLF nodes, and other interest-bearing tokens or nodes that can be proposed by our community via on-chain proposals.
Now that you gathered a basic understanding of $BIMB token, I will make an example that explains how it works in practice :
Wolfinu is a crypto wolf who owns 2,000 LIARS (WOLF nodes) generating high rewards daily. He wants to increase his exposure to the WOLF protocol by creating more nodes without using tokens coming directly from his pockets.
How can he do this?
Assuming that one $WOLF token is worth $1, and the cost of setting up a node is 10 $WOLF, he can take his nodes currently worth $20,000 , deposit them on the Wolfabra platform and decide his risk tolerance level. Given that Wolfinu is a risk lover, he decides to borrow 70% of his collateral by clicking on borrow and……. auuuuuuuu he receives 14,000 $BIMB. He can then go on Pancake Swap and exchange them for 14,000 $WOLF, create 14,000 additional WOLF LIARS that generate an increasing amount of daily rewards!
RISKS OF USING WOLFABRA :
Similar to other lending and borrowing protocols, borrowers will face the probability of getting their position liquidated. Before setting up a leveraged position on Wolfabra, borrowers will be able to see the respective liquidation parameters, namely liquidation fee and liquidation price. Liquidation occurs when the value of your collateral drops below a predetermined level, known as liquidation price.
Furthermore, a third party can agree on paying off your debt, in addition to the liquidation fee. Given the presence of some minimal amount of collateral left, users have access to withdrawals.
Users will face smart contract risk, including smart contract bugs and exploits.
- Nodes and interest-bearing assets as collateral for $BIMB
- $BIMB is USD pegged
- $WOLF token is different from $BIMB token
- $WOLF holders have voting power and can participate in proposals and discussions related to Wolfabra and Wolf Nodes
That’s all for today wolves! I hope you enjoyed the reading. We would love to have some feedback from our community. If you want to contribute your expertise to our project, feel free to do so by sending us a private message on Twitter!