Equilibrium Announces Integration With Polygon
Equilibrium published a blog post to announce that it has integrated Polygon in a bid to offer its cross-chain DeFi solutions to the users and projects of Polygon. The partnership includes Equilibrium opening the doors of the advantages and innovations of its DeFi 2.0 platform to Polygon users.
The first partnership between the two will enable developers to build scalable solutions based on cross-chain interoperability. Communities of both partners can expect several benefits out of the integration.
A list of the use cases of the integration has been drawn by Equilibrium to make it evident that the benefits will be unlimited to both sides. MATIC holders will now be able to utilize their digital holdings to borrow assets on Equilibrium. An additional benefit is that the borrowed assets can be moved through the ecosystem, including a decentralized exchange of Equilibrium.
The high level of leverage comes with a low collateralization requirement of 105%, which is 20 times the leverage. Users will be able to diversify the risk of the volatile market and avail of the payable interest at the lowest possible rate,
Users can even consider going short with their MATIC holding through the same amount of ETH. Equilibrium is all set to extend its liquidity incentive program to the users. According to the incentive program, users earn more APY in EQ based on the higher liquidity provision.
Based on how much liquidity is sourced to the space, users can easily earn an average of 10-20% APY.
Another manner in which users can earn from their holdings is by assuming the role of an insurer by providing liquidity to the network. The insurance would come in handy when chaos creates panic among the community members.
Penalty rewards await with competitive interest rates for users who participate in the process. The only condition is that users, or bailsmen, will have to lock their assets as EQ tokens in the liquidity pool of Equilibrium.
The transaction fee is no more a problem as Polygon takes care of that factor pretty well. It drives the transaction fee to a fraction of a cent, making it economical for the users. The integration will facilitate the movement of stablecoins and crypto assets between partners at a lower fee.
Aave, one of the most notable applications running on Polygon, will offer its users Aave tokens to be kept as collateral to borrow funds from Equilibrium. Many more protocol projects are in line to provide benefits similarly.
Dfyn Network and JellySwap, for instance, will enable their users to move assets to Equilibrium and lock them in the pool to earn some interest.
In the future, Equilibrium plans to add EQ and EQD liquidity to the Polygon chain as ERC20 compatible smart contracts. Currently, assets borrowed can be moved across the Polkadot ecosystem through XCM Communications between Polkadot parachains.