What is Amplify Protocol?
Amplify Protocol is a DeFi supply chain financial infrastructure that provides a direct bridge between SMEs and investors, taking supply chain finance into its next era. Through Amplify Protocol, it is simpler and more efficient to get the loans you need to keep your business running smoothly and with optimised cash flow.
What is DeFi?
DeFi is short for ‘decentralized finance’: an entire ecosystem of blockchain applications aimed at disrupting the traditional financial intermediaries such as your everyday bank.
What makes DeFi borrowing more attractive than through traditional finance (TradFi)?
It’s simple — time is money. Most SMEs tend to suffer from a significant gap between the time they invoice their customers and the time they get paid. This causes serious cash flow pressure and prevents businesses from growing organically. Through DeFi, SMEs can borrow funds from Lenders smoothly, allowing access to liquidity after a quick and efficient assessment process.
How does borrowing work?
Borrowers request loans on Amplify Protocol by offering collateral for a specified loan amount. Collateral must be an illiquid asset that represents a real-world financial instrument: for example, an unpaid invoice for goods that have already been sent to a buyer. Upon the loan being fully repaid, collateral can be taken back by Borrowers, but cannot be reused for a new loan.
How is the interest rate of the loan determined?
Amplify Protocol uses a hybrid system to determine interest rates, which fuses a consideration of the usual market dynamics with a fixed interest rate. The fixed rate is defined by the risk score of the collateral asset that has been put up to back the loan.
Why should I borrow on Amplify Protocol and not other DeFi protocols?
In other DeFi protocols, interest rates dynamically change based on market supply and demand, causing rate instability. Amplify Protocol’s hybrid system, described above, provides better and more stable interest to Lenders while also ensuring fixed interest rates for Borrowers.
On top of that, Borrowers also actively earn rewards in tokens as soon as a borrowing transaction occurs.
What are rewards and how can I earn them?
is the native token of the protocol, designed to incentivize users to continuously contribute to and make use of the protocol. As a governance token, is designed to put the future of the protocol right into the capable hands of its users.
As a Borrower, you’ll start earning rewards once you’ve successfully withdrawn funds from a Borrowing Pool. Rewards will be distributed pro-rata based on the amount borrowed. Take note that Borrowers can only claim rewards once their loan has been repaid in full, and it must have been repaid by the maturity date.
What are the main use cases for the utility of tokens?
is a governance token, which means it puts the leadership of the protocol’s future right in the hands of its users. Governance allows the community to make important decisions about every aspect of the protocol, such as the allocation speed of liquidity mining rewards, or protocol fees charged to Borrowers.
What are the requirements to start borrowing?
Before you can request a loan, you have to apply to Amplify Protocol’s Governing Council (GC). GC members are elected by the community and each hold at least a minimum of 1% of ’s total supply. GC members will audit your application and the related data you provide by carrying out standardized Know Your Business (KYB) checks. This governing logic is also subject to change if the community decides so.
What are the risks I should know before getting started?
As a Borrower, you should be aware that there are risks involved, particularly if you default on a loan. If this happens, you may be assigned a higher interest rate based on a lowered Credit Rating and restricted from borrowing further. Closing a loan late may also involve having to pay both regular interest and an additional penalty interest.
How do I get started with Borrowing?
Once you’ve fulfilled the requirements to start borrowing by completing the whitelisting process, you’ll now be able to create your own Borrowing Pool in which to lock your real-world collateral. Choose a base currency for your pool to be based in (for example, a typical stablecoin such as ), then sit back while Lenders provide liquidity to the pool in the form of your chosen currency.
How do Lenders get qualified on Amplify Protocol?
When creating their Borrowing Pool, Borrowers can choose whether the Pool will require Lenders to be whitelisted before participating or not.
If the whitelisting option is chosen, then once a Lender expresses interest in a Borrowing Pool, they must deposit funds in an intermediate escrow contract using the base currency selected by the Borrower. Borrowers can then whitelist Lenders, allowing them access to claiming yield and rewards. Lenders will then also be able to provide additional liquidity.
Why should I trust Amplify?
With Amplify Protocol, transparency is key. Unlike many other DeFi protocols, there is not a single anonymous actor among the core team. With several years of combined experience in key fields such as supply chain finance, technology, and compliance, users can be assured of the authenticity and professionalism of the protocol’s execution.
When is Amplify Protocol launching?
Amplify Protocol is currently running closed betas for all 3 of its core products: Earn, Stake and Borrow. Follow us on social media to stay tuned for more updates!
- What is Amplify Protocol?
- What is DeFi?
- What makes DeFi borrowing more attractive than through traditional finance (TradFi)?
- How does borrowing work?
- How is the interest rate of the loan determined?
- Why should I borrow on Amplify Protocol and not other DeFi protocols?
- What are $AMPT rewards and how can I earn them?
- What are the main use cases for the utility of $AMPT tokens?
- What are the requirements to start borrowing?
- What are the risks I should know before getting started?
- How do I get started with Borrowing?
- How do Lenders get qualified on Amplify Protocol?
- Why should I trust Amplify?
- When is Amplify Protocol launching?