Algorand is a public, permissionless and pure proof-of-stake based blockchain that provides decentralization, scalability, low transaction costs and security. Developed by Turing Award winner Silvio Micali, Algorand is an ideal Layer 1 solution for building decentralized financial applications (DeFi).
Folks Finance is a permissionless algorithmic capital market protocol running on the Algorand blockchain. Folks Finance focuses on lending and borrowing assets in the Algorand DeFi ecosystem. Offering advanced strategies by utilizing smart contract technology, Folks eliminates the risk of central intervention.
Folks Finance's mission is to open DeFi to the masses, providing convenient, friendly and accessible decentralized financial services for everyone. The protocol is designed to be community-centric, giving control to users with decentralized management. Users can earn FOLKS, the protocol's governance token, by lending or borrowing, and they can vote and make suggestions on future updates of the protocol. Additionally, FOLKS owners are rewarded with loyalty incentives.
Another feature of Folks Finance is the gALGO token, which runs on the Algorand blockchain. gALGO token is an ERC-20 like token used for Algo Liquid Management. It is awarded to users who pledge ALGO to participate in the management of the Algorand Foundation. Thanks to the gALGO token, users can use their ALGOs as collateral on the protocol, provide liquidity on DEXs or purchase NFTs. They can also vote on Algorand Foundation's proposals with the gALGO token or make suggestions on how to run the Folks Finance Liquid Management program. The gALGO token is minted 1:1 with the pledged ALGO and can be converted back into ALGO at the end of the governance period.
How Does Folks Finance Work?
Folks Finance is a leading capital markets protocol for lending and borrowing in the Algorand DeFi ecosystem. Essentially, through lending transactions, Folks users can provide liquidity and earn interest. Through borrowing transactions, users can borrow assets in return for collateral and apply different strategies.
Folks Finance Loan and Borrow work through smart contracts. Users can connect their wallets by going to the Folks Finance website and deposit or withdraw supported assets to the protocol.
Lending users earn interest on the assets they deposit. Interest rates are determined dynamically based on market supply and demand. Borrowers can borrow other assets up to a certain percentage of the assets they deposit as collateral. They pay interest on the assets they borrow. Interest rates are determined dynamically based on market supply and demand.
Borrowers should pay attention to collateral rates. The collateral ratio is calculated by dividing the value of the assets deposited as collateral by the value of the borrowed assets. As the collateral rate decreases, the risk of liquidation increases. Liquidation means selling some of the assets deposited as collateral and paying off the borrowed assets. Liquidation can be carried out not only by the protocol, but also by incentivized liquidators.
Folks Finance Algorand offers many advantages for lending and borrowing in the DeFi ecosystem. Some of these are those:
Security: The Folks Finance protocol runs on the Algorand blockchain and benefits from the level of security Algorand provides. Additionally, the Folks Finance protocol has passed independent security audits and its smart contracts are open source.
Speed: The Folks Finance protocol benefits from the fast transaction times offered by Algorand. The Algorand blockchain can process thousands of transactions per second, and transactions can be confirmed within seconds.
Low cost: The Folks Finance protocol benefits from the low transaction fees provided by Algorand. 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 a variety of assets in the Algorand DeFi ecosystem. Besides ALGO, users can also lend or borrow other assets such as USDC, USDT, ASA tokens. Additionally, the Folks Finance protocol also supports liquid governance tokens such as 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. Users can also choose different types of borrowing. For example, with flash loans, users can borrow for a short time without requiring collateral.
How to Use Folks Finance?
Folks Finance is a decentralized DeFi protocol that runs on the Algorand blockchain and offers financial instruments for digital assets. Smart contract technology enables Folks Finance to deliver advanced strategies and eliminate the risk of centralized intervention. Users can earn interest by investing their assets or get a loan by using their deposited assets as collateral.
Here's what you need to do to use Folks Finance:
Load ALGO or other supported assets into your Algorand wallet.
Connect your wallet.
If you want to deposit assets, select the asset you want and click the “Deposit” button. A window will open. Type the amount you want to deposit. Click Deposit. Sign with your wallet.
If you want to withdraw assets, 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 from General, Constant currency yield, or ALGO yield. Click Create credit. Sign with your wallet.
If you want to provide collateral, find 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 Available to Borrow 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 Fixed or Variable APY. Click Borrow. Sign with your wallet.
Folks Finance provides an affordable, fast and secure option for lending and borrowing in the Algorand DeFi ecosystem. Additionally, if you join Algorand Liquid Governance via 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 usage.
