Seamless Protocol, a collaborative effort by DeFi developers including Seashell, RNG Labs, and Loreum Labs, has launched on the layer-2 network Base. This innovative protocol offers non-custodial liquidity markets, facilitating trustless smart contracts that seamlessly connect liquidity pools with predetermined borrowing strategies.
The Collaborative Initiative
Seamless Protocol brings together developers from various DeFi projects, including Ampleforth and Uniswap, to create a solution for undercollateralized borrowing. This collaboration aims to simplify and streamline the borrowing process within DeFi.
Seamless Protocol, a fork of Aave v3, introduces the concept of Borrowing Strategies. These are akin to specific-purpose loans, such as home or auto loans, where the liquidity’s usage is predetermined. This approach enhances transparency as the liquidity supplier knows precisely how the funds will be used, preventing their diversion for other purposes.
Enhanced On-Chain Borrowing
While undercollateralized borrowing isn’t new in the crypto space, Seamless Protocol streamlines the process by conducting it entirely on-chain. This eliminates the need for a combination of off-chain and on-chain steps, providing borrowers with a more efficient and transparent experience.
Very excited to announce a collaborative partnership with @SeamlessFi 🤝🎉
Seamless is a decentralized, non-custodial liquidity market that is launching on @BuildOnBase
Can't wait to see where this goes! Learn more about the partnership announcement 👉 https://t.co/Id9eVmDohs
— Seashell 🐚 (👉 seashell.com Arbitrum Vaults) (@getSeashell) August 29, 2023
Seamless Protocol doesn’t limit itself to specific-purpose loans. It also accommodates general-purpose loans, which can be used for various situations. However, these loans adhere to traditional DeFi lending rules that require overcollateralization.
A Trustless Approach
Seamless Protocol believes its approach aligns well with the principles of DeFi, favoring trust in code over human intermediaries. This trustless model contrasts with systems that rely on on-chain reputation scores or identity verification systems. Seamless Protocol’s approach ensures that undercollateralized borrowing occurs within the secure framework of smart contracts, promoting transparency and reliability.
Seamless Protocol’s launch on Base marks a significant step in the evolution of non-custodial liquidity markets. By introducing Borrowing Strategies and conducting undercollateralized borrowing entirely on-chain, the protocol aims to enhance the efficiency and trustworthiness of DeFi lending, offering a promising solution for the crypto ecosystem.