Algorand is a public, permissionless and pure proof-of-stake-based blockchain that offers security, decentralization, scalability and low transaction costs. Algorand is the brainchild of Turing Award winner Silvio Micali and is an ideal Tier 1 solution for building decentralized financial applications (DeFi) with enterprise reliability.
Folks Finance, on the other hand, is a permissionless algorithmic capital market protocol built and operated on the Algorand blockchain. Folks Finance focuses on lending and borrowing assets in the Algorand DeFi ecosystem. Also, Folks leverages smart contract technology to provide advanced strategies. It also eliminates the risk of centralized intervention.
Folks Finance's mission is to open DeFi to the masses and provide decentralized financial services that are convenient, friendly and accessible to everyone. The name of the protocol, Folks Finance, is inspired by its mission to open decentralized financial services to the masses. The protocol is designed to be community-centric and gives control to its users with decentralized management. Practically, by lending or borrowing, users can earn FOLKS, the management token of the protocol, and vote and propose future updates of the protocol.
In addition, FOLKS holders are rewarded with loyalty incentives. Another important feature of Folks Finance is the gALGO token. gALGO token is an ERC-20-like token running on the Algorand blockchain. gALGO token is a token used for Algo Liquid Management by Folks Finance. The gALGO token is given to users who commit their ALGO to participate in the Algorand Foundation Administration. Thanks to the gALGO token, users can use their ALGOs as collateral in the Folks Finance protocol, provide liquidity in DEXs or buy NFTs.
They can also vote on the recommendations of the Algorand Foundation with the gALGO token or make suggestions on how to run the Folks Finance Liquid Management program. The gALGO token is minted at a 1:1 ratio with the committed ALGO and can be recycled into ALGO at the end of the administration period.
How Folks Finance Works?
Folks Finance is a leading capital market protocol for lending and borrowing in the Algorand DeFi ecosystem. Basically, through lending transactions, Folks users can provide liquidity and earn interest. Through borrowing transactions, users can borrow assets against collateral and apply different strategies. Folks Finance Loan and Borrow work via smart contracts.
Users can link their wallets by going to the Folks Finance website and deposit or withdraw supported assets to the protocol. Lenders earn interest on the assets they deposit. Interest rates are determined dynamically according to market supply and demand. Borrowing users can borrow other assets up to a certain percentage of the assets they have deposited as collateral.
They pay interest on the assets they borrow. Interest rates are determined dynamically according to market supply and demand. Borrowing users should pay attention to the collateral rates. The margin rate is calculated by dividing the value of the assets deposited as collateral by the value of the borrowed assets. The lower the margin rate, the higher the liquidation risk. Liquidation means selling some of the assets deposited as collateral and closing the borrowed assets. Liquidation can be carried out not only by the protocol, but also by promoted liquidators. Folks Finance offers many advantages for lending and borrowing in the Algorand DeFi ecosystem. Some of these are those:
Security: The Folks Finance protocol runs on the Algorand blockchain and leverages the level of security that Algorand provides. In addition, the Folks Finance protocol has passed independent security audits and its smart contracts are open source.
Speed: The Folks Finance protocol takes advantage of the fast transaction times that Algorand offers. The Algorand blockchain can process thousands of transactions per second, and transactions can be confirmed in a matter of seconds.
Low cost: The Folks Finance protocol benefits from the low transaction fees that Algorand provides. The Algorand blockchain charges a flat and low fee of 0.001 ALGO per transaction. This makes the Folks Finance protocol a cost-effective option for users.
Diversity: The Folks Finance protocol supports various entities in the Algorand DeFi ecosystem. Besides ALGO, users can borrow or buy other assets such as USDC, USDT, ASA tokens. It also supports liquid management tokens such as Folks Finance protocol, gALGO.
Flexibility: The Folks Finance protocol offers its users a flexible lending and borrowing experience. Users can deposit or withdraw their assets at any time. In addition, users can choose different types of borrowing. For example, with a flash loan, users can borrow short-term without collateral.
How to Use Folks Finance?
Folks Finance is a decentralized DeFi protocol that runs on the Algorand blockchain and provides financial tools for digital assets. Smart contract technology enables Folks Finance to offer advanced strategies and eliminate the risk of centralized intervention. Users can earn interest by depositing their assets or get loans by using their deposited assets as collateral.
Here's what you need to do to use Folks Finance:
Upload ALGO or other supported assets to your Algorand wallet.
Link your wallet.
If you want to deposit assets, select the desired asset and click the “Deposit” button. A window will open. Type the amount you want to deposit. Click on Deposit. Sign with your wallet.
If you want to withdraw an asset, select the asset you want to withdraw and click Withdraw. A window will open. Type the amount you want to withdraw. Click Check. Sign with your wallet.
If you want to create credits, go to the Credits page. Here in the Your Credits table, click + Create new credit. A window will open. Type the name of your loan. Choose a loan type between General, Fixed currency efficiency or ALGO efficiency. Click on Create credit. Sign with your wallet.
If you want to provide collateral, locate the asset you want to use as collateral in the Ready to Use as Collateral table on the Loans page. Click Use as Collateral. A window will open. Select the loan you want to deposit. Type the amount you want to use. Click Use as Collateral. Sign with your wallet.
If you want to borrow money, in the Loans Available table on the Loans page, click Borrow. A window will open. Select the loan you want to borrow. Type the amount you want to borrow. Choose between Stationary or Variable APY. Click Borrow. Sign with your wallet.
Folks Finance provides a cost-effective, fast and secure option for lending and borrowing in the Algorand DeFi ecosystem. Also, if you join Algorand Liquid Governance through FolksFinance, you will receive gALGO tokens in exchange for your ALGOs and you can use it on many platforms. In short, your ALGOs are not only locked, but also offer the advantage of use.
