TM Rating: 76% |
Review Date: January 26th, 2022
Tranquil Finance is an algorithmic money market and liquid staking protocol on the Harmony ONE blockchain. The money market allows users to supply and borrow assets, while receiving or paying interest, in a completely permissionless and decentralized way. Borrowing and lending interest is set based on market demand, and loans are over-collateralized to ensure solvency. This model was pioneered by the Compound protocol on Ethereum, but high gas fees have made the protocol untenable for most users.
Building on Harmony ONE gives the Tranquil protocol fast and cheap transactions, democratizing access to everyone. Another feature in Tranquil Finance is the liquid staking token, stONE, which allows the user to stake ONE for rewards while also being able to use it in Harmony’s DeFi ecosystem, such as using it as collateral on Tranquil Lending. The team envision stONE becoming the currency of choice in Harmony, as ONE naturally loses value due to inflation if it is not staked.
The vision of the team for Tranquil Finance is to be the premier platform on Harmony for lending and borrowing. Even if larger multi-chain protocols come to Harmony, Tranquil benefits from the first mover advantage but also by having a unique edge by being tailored to the specific needs of the Harmony ecosystem.
In addition to the standard safe assets like BTC or USDT, other tokens that are unique to Harmony are being listed, increasing the utility and value of all tokens in the ecosystem. stONE, the staking derivative token of ONE, allows stakers to receive ONE staking rewards while also using it as collateral on Tranquil, unlocking tremendous untapped value for the entire ecosystem.
Holders of stONE can use it in other DeFi protocols or exchange it back to ONE without the lengthy undelegation time. In terms of tokenomics, 75% of all protocol fees are distributed to TRANQ holders through locked staking. Besides that, TRANQ is Tranquil Finance’s governance token, so it will become a voting tool once the protocol is at a more advanced stage.
