SMART FINANCE: A New Frontier in the DeFi Space
By: Simeon Lanes
Tags: Cryptocurrency, Defi, Blockchain, Exchange

SMART FINANCE: A New Frontier in the DeFi Space

Just after four years of Ethereum launch, major markets, major government and major banks became part of the experiment; over a trillion dollar worth of transactions have settled on Ethereum. Two years ago there were practically no such thing as Decentralized Finance (DeFi), but in a very short time we have seen a host of open permissionless financial tools not just emerged but exploded on the Ethereum network. These systems make the existing financial system potentially accessible by way of open protocols and transparent data.

From payment and commerce, to banking and lending, to capital markets, to managing investment, to insurance and asset tokenization, DeFi has begun to reach every area of global financial infrastructure. According to a journal published by DeFi Pulse a year ago, the total monetary value locked in DeFi was $276 million but as at the time of writing this article, it’s now worth about $12.4 billion. 2020 has been dubbed the year of DeFi market and it’s one domain that’s very hot in the cryptocurrency space, with all eyes focused towards the development of DeFi products that can decentralize the digital economic system in its true sense. As such, a lot of DeFi products have been surfacing out of the blues but majority are flawed and cannot stand the test of time.

INTRODUCING… SMART FINANCE; A KNIGHT IN A SHINNING ARMOUR!

"Our Mission is to provide users with a secured, fair, and innovative DeFi platform via our community-centric approach and consolidate their financial experience within the ecosystem".

Smarts Finance proposes to harness the power of blockchain to provide an autonomous, decentralized, fair, secured, and a flexible platform upon which a variety of DeFi based services can be easily accessed. It is an ecosystem of decentralized financial services designed on flexible technologies with collective user management and control and it is committed to providing existing Defi services such as Governance, Lending, Borrowing, Staking, Liquidity Mining etc. in an improved and sustainable manner and also to develop new products and opportunities that will benefit



users and the niche space as a whole.

KEY COMPONENTS OF SMARTS FINANCE

DECENTRALIZED:

As the name implies, DeFi dApps are decentralised i.e. they operate without the need for centralised control of individuals or an organisation and operate through smart contracts or automatically programmed self-executed codes. What this means is that, once the dApp is deployed to the blockchain, there is no further need for human intervention except where the Smarts Finance community using dApp identifies a need for code upgrades or bug fixes.

SECURITY:

Smarts Finance prides itself as being security conscious. It’s smart contract will be made public which would accord developers the opportunity to audit and identify any potential bugs or vulnerabilities in the codes. Also, Smarts Finance will sought the services of a third party blockchcain expert to frequently audit its smart contract in order to ensure that the smart contracts are not exploited in anyway and its finance are safe.

ACCESSIBILITY:

Smarts Finance is open source and accessible by all and sundry. It has an amazing smart web app design which is smart enough to allow users to gain access, play around with the codes and interact with it’s DeFi services and as such, it provides more confidence to users and they can be rest assured that no hidden malicious coding is operating in the background.

TRANSPARENCY:

One of the key components of blockchain is that all transactions carried out on the network are made public and in an effort to promote transparency, the team’s token will be vested in a time-locked smart contract which will be made available to the public and also, the fundraising wallet for contract deployment will be co-hosted with independent influencers using a multi-sig wallet format.

COMMUNITY-DRIVEN:

Smarts Finance is the project of the community, by the community and for the community. Anyone from around the world can participate in the platform, all one needs is just a smartphone with internet access and one can be part of the community in a couple of seconds.

SMARTS FINANCE DEFI-BASED SERVICES

As pointed earlier, Smarts Finance is committed to providing existing Defi services such as Governance, Lending, Borrowing, Staking, Liquidity Mining etc and also open to new products and opportunities that will beneficial to its users and the entire DeFi space. Now, let’s take a look at some of its defi-based services.

GOVERNANCE:

DeFi hopes to create an open financial system that can be accessible by anyone in the world and one of the ways it does this is through community governance. Now lets take a quick look at governance tokens - these are tokens that are designed for decentralized decision making. As the logic goes the more people involved, the less likely an attack or abuse by a single party can occur. A team of community influencers or first advisors that have no ties over the Smarts Finance project would be saddled with the responsibility of overseeing the project. They will have control over a multi-sig wallet which would be used for all contract deployments. At some point, users and holders of SMAT can submit a proposal to vote for change in the system owning that they meet certain criteria such as; the minimum token requirement for an account, the corresponding voting strength and also a high reputation score - which is a factor of time and past community activeness. It is interesting to note that a user must have a minimum of 5,000 SMAT and resulting voting strength of 1,000 sSMAT inorder to be eligible to call for a change in the system and the tokens must be held for at least 14 days. Also, there are other yardsticks or factors that must be take into consideration before a user can cast a vote on the platform and these includes; weight of the account, trust score and time (i.e voting gauge of a proposal decreases with time). Finally, If a proposal gets accepted, 20% of the amount of the allotted incentive generated from staking fees will be awarded to the creator of the proposal, 50% will be distributed among voters while the remaining 30% will be burnt, but If a proposal is rejected the owner loses some of his or her voting weight as well as reputation score. Here are some of the governance functions a Smart token holder can perform; change a market or service interest rate, propose the listing of a new token market, redefine reward structure and their distribution, Assign new admins or multi-sig wallet candidates, propose contract terms or update their oracles.

SMARTS STAKING:

From the customer point of view, Staking is similar to interest savings account in a traditional bank. The collateral could be a house or a home improvement loan and arranging this loan would be a lengthy process of filling in forms and providing legal documentation covering ownership. In DeFi, infrastructure service providers such as staking pools and Staking-as-a-Service providers play the role of the bank, running nodes for decentralized PoS protocols on behalf of investors and all that is required is to transfer some control of the crypto asset into a smart contract to act as collateral for a loan. Smarts Finance will allow the non-custodial staking of SMAT, established ERC-20 standard tokens such as UNI, YFI, COMP and other reputed tokens as the platform grows. Before staking commences, Smart will announce the APY yield of SMAT and other related parameters such as the lock period. 20% of the total reward pool is assigned to staking rewards and rewards will be distributed on daily basis according to the individual’s account share of the pool. 50% of the staking reward pool will be allotted for SMAT staking while 12.5% each is assigned to for additional staking options. The distribution scheme is subject to change under the governance objectives if holders of SMAT feels its what’s best for the platform. The daily reward distribution for each staking period will differ according to the longevity of the staking period, with longer staking periods having higher yield. Other incorporated tokens would not be subjected to any staking period. It is also interesting to note that when a user deposits a token for staking, 0.1% of the allocated token will be removed and immediately transferred to the governance proposal incentives contract. 0.2% in fees will be charged for unstaking and these fees mechanism will form a reserve pool that will be used to reward successful platform proposals based on their tier.

LIQUIDITY MINING:

Before the birth of DeFi, there were only two ways one can get more value out of his or her tokens; trade them or hold them. DeFi has changed this narative as it gives users countless ways to earn money and one of such ways is liquidity mining. Liquidity mining can be said to be depositing or lending designated token assets with a mining mechanism to provide liquidity for the product’s fund pool and thus obtaining an income. Liquidity mining is a result of yield farming plus a bonus, i.e yield farming is the reward a user gets for providing a service (which could be lending tokens for a period of time) and the newly generated tokens are the result of the user’s mining (bonus). Liquidity mining is one of the core services of Smarts Finance and it will feature many pools with SMAT/ETH pool the first to be implemented and the choice of additional pools such as ETH/USDT, ETH/DAI, DAI/USD etc. will be decided by the consensus of the governance system which directive is solely dependent on the community and holders of SMAT. Liquidity providers (LP) will be able to earn passive rewards on their locked tokens. 40% of the total pool set aside for governance token distribution and rewards will be assigned to LPs (20% will be for staking incentives, 40% for lending rewards). Immediately a user deposit to the pool contract, “SMAR” and "sSMAT" will be generated. SMAR will be generated and transferred to the user account to represent their share of the pool which can be later redeemed for the underlying asset when the lock-up period is over while sSMAT for voting and governance functions. One should note that participants will be rewarded according to the weight and size of their position of locked assets in proportion to the total locked value of a particular pool from the assigned daily reward pool which figure is yet to be released. More also, SMAT/ETH pool will have a lock period of at least 6 months, with provision to extend the lock time further if the community deems it so. In an effort to discourage selling pressure after the initial lock period, a provable algorithm will randomly allow withdrawal among participating accounts within 3 months. That is to say withdrawals will be allowed at a healthy rate that is intended not to influence the market very much.

SMART LENDING:

Lending markets are one popular form of DeFi, which connects borrowers to lenders of cryptocurrencies. If you have ever applied for a loan, then you would know the process is always daunting and time-consuming. Worst of all is that you would be forced to work with lending companies that are only there to enlarge their pockets. Thanks to DeFi as this is now a thing of the past. Smarts Finance will allow lending and borrowing functions on the native platform (direct) and outside source (indirect) using the money market model and this will permit users to have access to financial services accustomed with conventional institutions right on the decentralized blockchain technology. Lenders will be able to earn passive income when liquidity is provided to a pool by storing their assets into the token market and borrowers will be able to borrow from the money market after their assets are over-collateralized. The amount of income earned passively by lenders depends on the demand of the borrowing market and the interests on every transaction carried out within the Smarts Lending protocol which is governed by fully audited contracts.

SMART TOKEN

Smart token (SMAT) is an Ethereum ERC-20 standard token that will power the Smarts Finance ecosystem. It will be used in governance (for creating proposals and casting of votes), fees payment, reward distribution and incentives.

CONCLUSION:

As the financial systems is undergoing transformation towards decentralization, there will be more demand for DeFi dapps in the future and Smart Finance is committed to delivering top notch DeFi services like never seen before any where that is fair, autonomous, decentralized, secured and flexible. Its team of highly seasoned experts have put in place strategic measures as well as innovative infrastructures to help address the issues in the financial sector and to place DeFi on the spotlight.

For more information please visit:

Website: https://smarts.finance/

Telegram channel: https://t.me/smarts_ann

Telegram group : https://t.me/smartsfinance

Discord: https://discord.gg/S45K6fQR6N

Twitter: https://twitter.com/Smarts_finance

Medium: https://medium.com/@smartsfinance

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