MarginFi is a decentralized finance protocol operating on the Solana network. This protocol allows users to access debt and leverage services securely and efficiently.
To better understand MarginFi, people can refer to some of the articles below:
- What is Lending & Borrowing? The Essential Puzzle Piece in DeFi
- What is AAVE? Overview of AAVE Cryptocurrency
Overview of Marginfi
What is marginfi?
Marginfi is a decentralized lending platform where users can borrow and lend cryptocurrencies from their wallets without having to go through intermediaries. This helps reduce costs and increase transparency in transactions.
Marginfi also integrates smart risk management mechanisms, helping users better understand the risks they are facing and manage them better. This helps increase safety and reliability for users when participating in loan activities on the platform.
Marginfi’s mechanism of action
Like other lending protocols, Marginfi also provides tools for users to borrow or lend their tokens. Users can deposit supported tokens into the Marginfi protocol and receive interest on this lending. When users want to borrow tokens, they have to pay interest for the loan. Borrowing and lending interest rates are calculated as annual percentage rates (APY and APR).
In addition, Marginfi also introduced the Liquidity Incentive Program (LIP): The purpose is to support liquidity for the protocol. Users can deposit into LIP campaigns and receive interest. However, deposits into LIP may be locked depending on the LIP campaign they participate in, and the lock period cannot be adjusted after the campaign created.
When a user’s loan position falls below the requirement, they will be exposed to the risk of liquidation. Liquidation on marginfi takes place automatically and does not require authorization. The liquidation process is carried out by a third party providing this service for profit, and marginfi rewards a fee for successful liquidation. When a loan position falls below demand and is liquidated, the liquidated borrower (or “liquidator”) must pay a fee as a penalty.
Currently, the fees for asset sources are set as follows:
- Fines for liquidated persons: 5% of the value of the liquidated person’s mortgaged assets at the time of liquidation.
- Liquidator’s fees: Of the 5% that the liquidator pays as penalty, the liquidator receives half, i.e. 2.5% of the value of the liquidated assets.
- Insurance fund fee: Of the 5% that the liquidator pays as a penalty, the specialized insurance fund for mortgaged assets collects half; i.e. 2.5% of the value of the liquidated assets of the liquidated person.
- Protocol Fees: Currently, Marginfi does not charge fees for regular protocol operations. In other words, Marginfi does not generate revenue.
Development Roadmap
Currently, the project is adding quite a few tokens to allow users to borrow. In addition, the project is implementing mrgn points. mrgn Points provide a digital way to measure a user’s contribution to the success of the mrgn ecosystem.
Core Team
MarginFi was founded by Mrgn Labs. The project founder is Edgar Pavlovsky.
- He graduated from Utal University and has extensive experience working in key positions and in many different fields, including company founding, machine learning, data science, and machine learning operations management.
- He first worked at Goldman Sachs for nearly 2 years, then worked as game director for the Major League Quidditch project.
- From July 2017, he worked as Data Science for Uber, and in November 2018, he switched to Machine learning for the Strave project.
- In October 2019, it was Co-Founder of Jia, later the project was acquired by Acquired. He founded Mrgn in December 2021.
Investor
- MarginFi has successfully raised $3M in funding at Seed round with the participation of Multicoin Capital and Pantera Capital with the goal of building the first Cross-Margining mechanism on the Solana platform.
Tokenomics
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Exchanges
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Information Channel of MarginFi Project
- Website: https://www.marginfi.com/
- Twitter: https://twitter.com/marginfi
- Telegram: https://t.me/mrgncommunity
- Medium:
Summary
MarginFi is a decentralized lending protocol on the Solana DeFi platform, helping users manage their positions and optimize their capital. With the team behind Mrgn Labs, Margin is aiming to bring a convenient and secure decentralized trading experience to the DeFi community.
The project is creating a connection between different DeFi protocols and providing a single account to manage open positions, promising to bring many advancements to the decentralized finance sector on Solana.