Fortress Credit and Lending Project Insight

JetFuel Finance, a Binance Smart Chain deflationary yield-farming and decentralized lending ecosystem, recently launched its feature-filled crypto-lending platform, Fortress.

By
Ahamdi Abarikwu
on
May 1, 2021
Category:
BSC News

Introduction

In the early days of blockchain technology, bitcoin and other cryptocurrencies were of limited application. They were mainly used for peer-to-peer transfer of value without going through the constraints of a central authority like banks. People hardly used cryptos for anything else apart from making payments and transferring money.

As more innovation came into the blockchain industry, the development of more use-cases for cryptocurrencies gathered momentum. This has ultimately lead to the birth of a branch of blockchain application known as decentralized finance, called DeFi for short.

The core ideal of DeFi is to provide decentralized financial services through leveraging the blockchain. One of such services generating global attention in the industry is crypto loans, offering the decentralized borrowing and lending of crypto-assets. This article will take a look at a new platform that seeks to add value to the crypto-lending market, Fortress Credit and Lending.

What Is Fortress Credit And Lending?

Fortress is a decentralized credit and lending protocol. The JetFuel Finance team founded it, and the central aim of the protocol is to provide trustless loan services to users of the Binance Smart Chain. Fortress is an exciting new entrant in the BSC lending space with a couple of features designed to enhance users' crypto lending experience. The protocol comprises an algorithmic money market as well as a synthetic stablecoin. 

Features Of Fortress

Source: Whitepaper

1. Algorithmic Loan Interest Rates

Fortress protocol makes use of asset pools to provide credit services. The interest rates charged on those assets are computed by an algorithm which can vary depending on each asset's market supply and demand.

2. Overcollaterisation

A user who wants to take a loan from the protocol needs to deposit assets greater than the loan amount to the protocol. 

3. No Burdensome Terms

Fortress makes crypto loans easy for everyone to access. Loans given by the protocol have no monthly payments, no late fees, and no trading fees etc. Borrowers can pay back their loans at any time.

How It Works

The functionality of Fortress hinges on six main areas. These are:

  • Supplying Assets

Investors who supply assets to the protocol's lending liquidity pool earn compound interest on every produced block. Fortress tokenizes assets supplied to its money market using what is known as fTokens. If an investor supplies ETH, for example, they will receive 'fETH'. This tokenization makes it possible to aggregate users' assets in such a way that the liquidity of the system is more robust compared to other similar platforms. 

  • Borrowing Assets

If users opt to borrow from the platform, they must supply their assets to the platform as collateral. Each money market has a maximum loan-to-asset ratio that cannot be exceeded. The ratio is done in a way that ensures that each loan is over-collateralized within safe limits.

Let us say that the maximum ratio for Bitcoin is 60%. If an investor supplies 2,000 BTC, he can use it as collateral but will only borrow a maximum of 1,200 BTC. 

  • Liquidations

Loans on Fortress can be liquidated either manually by the borrower or automatically by the system. The time of manual liquidation is totally at the discretion of the borrower as long as the value of his collateral still covers his maximum loan ratio. Loans given by Fortress have no maturity dates.

Source: Twitter 

On the other hand, the system can forcefully liquidate a user's loan. This happens when the value of the user's collateral falls so much that it goes below the maximum collateral ratio. Let us assume that a particular asset has a maximum collateral ratio of 80%. If a borrower takes a loan up to 80%, he will be force-liquidated until the collateral value drops up to 20% while the loan is active. 

  • Interest Rates

The Fortress Protocol makes use of an algorithmic interest rate model to adjust interest rates in proportion to demand and supply dynamically. On the demand side, when demand is low, interest rates are low; when demand is high, interest rates are high too. The same applies to the supply side. Obviously, there are no perfect guarantees that liquidity will be available on any lending platform at all times. Liquidity provision is at the discretion of investors. The interest rate model dynamically increments interest rates to encourage investors to supply liquidity when demand is high.

  • FAI Stablecoin

FAI is a BEP-20 synthetic stablecoin, proprietary to the Fortress protocol. It is soft-pegged to the US dollar; market forces and crypto collaterals maintain its peg and not US dollar fiat backing.

When users supply assets/collateral, the protocol enables them to mint FAI tokens up to 50% of the supplied collateral. Holders of FAI can add them to staking or liquidity pools for more returns. 

  • Governance

The Fortress protocol has a  governance system that enables it to adjust quickly to prevailing market conditions. Holders of the token governance vote on any proposal for changes or improvements in the protocol. Voting on a proposal runs for three days, while approved changes are applied two days after the end of the vote to give the platform time to adapt to the coming change appropriately.

Tokenomics

The governance token of Fortress protocol is the FTS. It is a BEP-20 token. Holders of FTS have voting rights to determine protocol parameters such as interest rates, new assets to be admitted as collateral etc. Users of the platform can earn FTS when they supply assets, borrow assets, or mint the protocol’s stablecoin, the FAI.

Source: Whitepaper

FTS has a total supply of 10,000,000 and will be issued over a two and a half-year period according to the following schedule:

  • Borrowers: 22.75% - 2,275,000
  • Lending: 22.75% - 2,275,000
  • Team: 20% - 2,000,000 - vested over 6 months
  • FAI Stable-coin: 19.5% - 1,950,000
  • Initial Jetfuel Offering (IJO): 5% - 500,000
  • Reserve: 10% - 1,000,000  (to be used for initial liquidity, marketing, ect)

Closing Thoughts

As the boom in the crypto industry's growth continues, the importance of crypto loans will increase. The Fortress Protocol lending protocol on Binance Smart Chain offers decentralized financial services, specifically, loans with no maturity dates, no monthly fees, no late fees etc. These are features that are enticing for the crypto community and typical people. With a development team that has more than 30 years of combined DeFi experience, Fortress can become a significant lender in the industry.

For more information about Fortress Protocol, visit their media handles, 

Website

Whitepaper

Twitter

Telegram

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Ahamdi Abarikwu

Ahamdi Abarikwu is an Electrical Engineer and a lover of anything crypto. He is also an avid writer, proofreader and editor. He loves to play Scrabble in his spare time.

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