As you know, DeFi (Decentralized Finance) has grown recently, thanks in part to the development of Lending & Borrowing platforms, also known as Banking in DeFi by bringing together those with excess capital and those in need of funds.
In today’s article, I would like to provide you with an interesting project, Moola Market (Moola) - a Lending & Borrowing platform in the Celo ecosystem.
What is Moola Market?
Moola is a non-custodial liquidity protocol for Lending & Borrowing built on the Celo blockchain that democratizes yield and credit access.
Moola launched its public Beta Web App version in February 2021. Depositors earn interest, which is repaid by borrowers who can take over-collateralized loans in perpetuity or under-collateralized flash loans. Moola solves the problem of people who have extra money and want to make a profit, as well as those who want to borrow that money to serve their purpose.
How does Moola work?
Deposit & Earning: Moola is designed to be safe for both depositors and borrowers. When available liquidity is low, borrowers are driven to pay back their loans, and depositors are incentivized to deposit additional liquidity.
- For Savers: The core operation of Moola's operation is a Liquidity Pool of Assets (LPs), in which savers (lenders) transfer crypto-asset into the liquidity pools to receive interest in exchange.
- For Borrowers: Borrowers join the pool to find assets to borrow in exchange for being collateralized by a Moola-required asset. Moola does not have any time restriction related to deposits. You can initiate a withdrawal anytime you wish.
The maximum amount of any asset that can be borrowed is equal to a 75% loan-to-value, which means you have to deposit a property worth $100 to get a loan of $75. Some leading platforms like MarkerDAO, Compound, and Aave have the collateral ratio of 67%, 75%, and 75%, respectively.
Moola is currently supporting a total of 3 crypto assets:
- Celo: The native asset of the Celo platform.
- Celo Dollars (cUSD): A stable asset that follows the US Dollar price.
- Celo Euro (cEUR): Algorithmically follows the price of the Euro currency.
Flash loans are also the main operation of Moola, which enables you to borrow any available amount of assets from a Moola liquidity pool without putting up any collateral, as long as the borrowed liquidity plus a flash loan fee is returned to the pool within the same block.
The lifecycle of a flash loan is relatively short, and all lending and borrowing must take place inside that short time frame before it expires like a flashlight.
Flash loans provide you access to significant quantities of funds for a short period of time. This can be useful in a variety of situations, including Arbitrage trading, Swapping collateral, Debt refinancing, etc.
Arbitrage trading utilizes price differences between exchanges like Ubeswap and Mento. This is an essential component of financial markets. Arbitrage trading assists the market in adhering to the rule of supply and demand in order to stabilize the Celo ecosystem's prices. For example:
- If you discover that the Celo price on the Ubeswap platform is higher than the Celo price on Moola. The price of Celo in Ubeswap is $101, while that of Celo in Moola is $100. So, you will borrow 1 Celo in Moola by using the Flash loans feature.
- Then you will transfer Celo to the Ubeswap platform to sell for $101, and at the end of the transaction, your profit will be $1.
- You have unwittingly increased the supply of Celo in Ubeswap, which helps to lower the price of Celo, similar to the increase in demand in Moola which increases the price of Celo in Moola. This transaction is called arbitrage, which helps to close the price gap between the two platforms.
What is the MOO token?
MOO is Moola Market's governance token. The MOO token will be distributed to network participants such as liquidity providers, developers, early users, and others who contribute resources to the success of Moola, Uberswap, and Valora.
Detailed information about MOO token
MOO Key Metrics
- Token Name: Moola Market.
- Ticker: MOO.
- Blockchain: Celo.
- Token Standard: cERC-20.
- Contract: 0x17700282592D6917F6A73D0bF8AcCf4D578c131e
- Token Type: Utility, Governance.
- Total Supply: 100,000,000.
- Circulating Supply: Updating...
MOO Token Allocation
- Moola Community Treasury: 51.04%.
- Pre-Sale: 23.57%.
- Founders: 10%.
- Future Employees: 5%.
- Celo Reserve: 5%.
- Contractors/Advisors: 3.52%.
- Early Supporters: 1.87%.
MOO Token Release Schedules
Release Token in 12 months for both pre-sale investors and founders.
MOO Token Use Cases
Governance: Active stakeholders and liquidity providers are engaged in the process of discussing, voting for protocol upgrades.
You can also stake MOO on Ubeswap pools to receive transaction fees and incentives in MOO tokens.
How to get MOO Token
You can buy MOO tokens on Ubeswap and then stake them on Ubeswap pools to receive incentives for MOO tokens.
How to store MOO Token
You can store MOO tokens in wallets on the Celo ecosystem.
At the moment, Coin98 Wallet does not support storing the MOO Token, we will update this article as soon as Coin98 Wallet develops this feature.
Moola has now developed a minimum viable product (MVP) on the web version.
Roadmaps of Moola are not publicly available to the community. I predict Moola's next steps will be to develop mobile applications and connect with many other Defi ecosystems outside of Celo.
Team, Investors, and Partners
Patrick Baron (Founder of Moola Market): He worked as the Managing Member of Validator Capital in 2020. Then, he founded Moola in 2021.
Moola raised a $1.4m seed funding round. Notable backers include Polychain Capital, Flori Ventures, Davoa Capital, as well as angel investors.
Is Moola (MOO) a good investment?
The overall goal of the Celo ecosystem is to bring DeFi to over 6 billion smartphone users. Moola also pursues this vision. If Moola utilizes the network effect in the Celo ecosystem, it will help Moola develop in the future.
Moola is one of the Celo ecosystem’s first Lending & Borrowing projects, so Moola has the advantage of being a pioneer compared to other competitors in the same ecosystem.
At the moment, Moola’s Total Value Locked (TVL) is currently about $80 million, which has increased 10,000% in the last three months. However, Moola’s TVL is still low compared to the leading platforms in the same niche.
From the data provided by Chainbeat, the number of Moola transactions per day is still fairly low, and the volatility is quite high. The majority of current users are clients who have only been using the service for a month. The previous client files are mostly gone. Personally, I believe Moola is still a risky investment that should be monitored more attentively.
Disclaimer: All the information in this article is only for information purposes and should NOT be considered investment advice. Investing in Crypto contains hugely high risks, and you should only invest the fund you are willing to lose.
By looking at similar projects, you can compare Moola’s product quality and the possibility of future price increases. Other projects that also provide Lending & Borrowing services like Moola:
- Ethereum: Compound, Aave, Curve Finance,...
- Binance Smart Chain: Alpha, Venus Finance, Alpaca Finance,...
- Solana: Solend, Port Finance, Parrot,...
- Polygon: EasyFi, RAMP,...
- Avalanche: BenQi,...
- Polkadot: Konomi,...
- Cosmos: Cream Finance,...
I just finished introducing the basic information about Moola Market. Do you believe the Moola Market is a good place to invest right now? Please leave a comment below to discuss Moola Market together.