Understand Vee.Finance in Three Minutes: A Decentralized Cross-Chain Lending Platform Based on Avalanche

Author: Funky

Although NFTs have been in the spotlight in the second half of this year, DeFi remains the backbone supporting the growth of the entire cryptocurrency industry. According to data from DeBank on September 10, the total locked value in the DeFi ecosystem has reached $113.6 billion, with the top ten locked assets being evenly split between lending and DEX, indicating that lending platforms and decentralized exchanges have become the two main pillars of DeFi.

However, currently, DeFi lending and DEX are still in an isolated state with no intersection, and there is a lack of direct borrowing or trading scenarios in the market, leading to low asset utilization rates on lending platforms, which ultimately results in low asset deposit interest rates. Additionally, the separation of lending and trading protocols has made it impossible for users to directly engage in the leveraged trading commonly seen in traditional financial markets on DeFi. Users wishing to engage in leveraged trading must first borrow the corresponding proportion of crypto assets from Compound or Aave, and then trade on Uniswap or Sushiswap. The entire process is cumbersome and complex, making it difficult for users to manage leveraged trading positions centrally, significantly increasing costs and trading risks.

The decentralized lending cross-chain platform Vee.Finance draws on best practices from traditional financial markets and innovatively integrates lending protocols with leveraged trading: on the deposit side, it lowers the threshold for traditional financial users to participate in DeFi through a more user-friendly product experience; on the lending side, it adds DEX options and introduces leveraged lending functionality, greatly improving asset utilization.

Compared to early DeFi lending protocols like Compound and Aave, Vee.Finance's advantage lies in ensuring the platform's trading depth by integrating DEX and cross-chain, promoting efficient capital utilization; by launching leveraged trading functionality, it meets the trading volume needs of different levels of traders and users with high-risk preferences.

Emerging in the summer of last year, DEX based on the AMM (Automated Market Maker) model currently occupies the mainstream market, opening up vast new opportunities for more people to invest in a wider variety of financial products without permission, achieving significant success. However, it still faces issues such as impermanent loss, high gas fees, and slippage leading to low capital efficiency, as well as multi-token risk exposure.

To address these pain points, Vee.Finance aims to redefine DEX through the following product innovations:

• First, to reduce user trading costs, Vee.Finance has chosen to build on the Avalanche protocol. Compared to other public chains, Avalanche is a highly scalable public chain with an efficiency of over 5000 TPS (transactions per second), a block confirmation time of just two seconds, and a high level of security capable of withstanding 80% of hash power attacks. This choice of underlying blockchain platform allows Vee.Finance to provide users with a high-speed trading experience and low gas fees, helping users seize market opportunities in a timely manner.
• Second, in terms of liquidity provision, Vee.Finance integrates multiple DEXs to fully utilize the market depth and liquidity of different decentralized exchanges to increase trading depth.
• Third, Vee.Finance integrates oracles to correct cryptocurrency asset prices. Even if a trading pair on a certain DEX experiences significant price deviation due to external factors, Vee.Finance can still provide accurate quotes, ensuring that users can generate profits through trading and that their assets do not depreciate with regular market price fluctuations, thus reducing the seemingly unsolvable impermanent loss that has long existed in the DeFi space.
• Finally, it is worth mentioning that Vee.Finance will launch limit orders and smart order routing features in the future, which will not only allow users to enjoy a trading experience comparable to centralized exchanges but also help users discover better trading prices.

Vee.Finance went live on the mainnet on September 14, with borrowing APYs for USDT, WBTC, and LINK all exceeding 99.999%, and loan APYs for AVAX and WETH at 716.12% and 115.81%, respectively, offering considerable returns.

Like other DeFi protocols, the total supply of 1 billion VEE, as Vee.Finance's native token, will play a connector role in the ecosystem built by Vee.Finance:

• Liquidity Mining: Miners providing funds to Vee.Finance can earn a portion of newly minted VEE tokens. Time and value are two key factors in the VEE distribution calculation, and the number of VEE will follow a profit distribution curve. According to the plan, Vee.Finance intends to start mining simultaneously with the mainnet launch, including liquidity mining, trading mining, and airdropping PNG tokens from the DEX Pangolin on the Avalanche protocol to encourage user trading, with staking mining functionality to be launched soon.
• Governance: VEE represents the voting rights of token holders. Each VEE token represents one vote, and community votes will decide on matters such as supporting new tokens as collateral, the maximum leverage for each token, and partnerships with new DEXs.

Recently, Vee.Finance completed a $5.3 million private funding round, with participation from Aussie Capital, AV Star Capital, BCA Investments, Black Mamba Ventures, Cobak, Crypto Avengers, DCI, Favor Ventures, Muhabbit Ventures, New Tribe Capital, Phenomenon Capital, Phoenix VC, Redline DAO, Tokuto Capital, and Unpeeld Venture Labs.