Proxima is the all-in-one lending and borrowing platform for distributed financial solutions, multi-party authentication, and industrial liquidity.
There are numerous reasons why blockchain is shaping the future of global financial markets. Blockchain technology solves the problem of high financial clearing and settlement costs, inefficient cross-border payments, and the insurance of financial assets. Through distributed encrypted finance, transaction efficiency has improved, ensuring that transaction costs and risks are reduced.
Blockchain also solves centralization problems in data storage and application, easy forgery and tampering, inability to trace the source, inability to share transactions, high cost of transferring funds, and builds trust between people. Therefore, the need for blockchain technology cannot be overemphasized.
Currently, there are numerous blockchain innovations across the entire Decentralized Finance (DeFi) ecosystem, including the Proxima Eco Chain, shaping the future of finance.
Proxima is a decentralized open lending platform built on the Ethereum network. The project supports the traditional financial system’s deposits, lending, and lending business into a distributed encrypted economy. With its efficient and transparent algorithm structure, Proxima reasonably sets the interest rates of deposits and loans for lenders and borrowers.
The lending platform also supports mainstream asset dark pool trading protocols like Republicprotocol. In addition, Proxima remains one of the few blockchain companies with distributed encrypted asset dark pool trading technology.
Proxima seeks to improve its ecosystem constantly to support the development of any private application, thereby establishing a privacy-centric ecosystem of the distributed encrypted financial market.
Deposit and Loan Business: Proxima designed one of the best financial equity certificates in the industry. The innovation allows users to receive pToken when they deposit the original currency at 1:1 price. Users need to deposit assets supported by the Proxima agreement to obtain pToken. For instance:
- Users get pETH when they deposit ETH into the Proxima agreement
- Users get pUSDT when they deposit USDT into the Proxima agreement
- Users get pDAI when they deposit DAI into the Proxima agreement.
By collateralizing pToken, users can borrow much-needed funds from the Proxima agreement.
Deposit Interest Rate Model: The lenders and borrowers’ loan and deposit interest rates are calculated through algorithms based on the platform’s borrowing volume and trading volume. In the case of the same loan interest rate, the higher the fund utilization rate of the lending platform, the higher the loan interest income, and the higher the deposit interest rate; the lower the fund utilization rate, the lower the loan interest income and the lower the deposit interest rate.
Proxima uses Oracle oracles to ensure the fairness of collateral prices. In addition, by referring to the deposit interest rates of other platforms in the market, we will make comprehensive adjustments to obtain more effective market competitiveness while ensuring the safety of the fund pool as much as possible.
Collateral Factor: The collateral coefficient refers to the maximum amount of assets that a user can borrow from the Proxima loan agreement by staking a fixed amount of pToken. If the collateral coefficient of a certain pToken is 0, the collateral cannot be used to borrow from the Proxima agreement.
For each pToken in the Proxima loan agreement, there will be a mortgage coefficient ranging from 0 to 1 based on the liquidity of the collateral in the trading market and the evaluation results of market price fluctuations in the past several times. For example, assuming that the collateral coefficient of the digital currency ETH is 0.9, it means that if a user has pledged USD 10,000 worth of pETH, he can borrow up to USD 9,000 of other funds from the market.
Safety Factor: Because of price fluctuations due to market volatility and the fear of liquidation, Proxima utilizes a safety factor H. This unique feature ensures that the borrower’s account is secure.
When the health factor (H) of the borrower’s account is less than 1, the liquidation conditions of the Proxima agreement will be triggered, and the collateral will be listed as an asset to be liquidated, which the liquidator will handle. The liquidator will be rewarded for carrying out the liquidation.
Liquidation Conditions: As a lending agreement, the health of the platform system itself depends primarily on whether the Proxima lending agreement can quickly perform liquidation operations on the borrower’s assets when the borrower’s collateral is insufficient. The liquidator will liquidate the pledged assets placed in the liquidation queue, and the liquidator will receive certain rewards through liquidation.
Proxima uses Oracle’s Oracle to determine the value of mortgage assets. For example, after calculating by Oracle, the collateral value is 10000 USDT, then the liquidator only needs to pay 9500 USDT to take the collateral and get a 5% liquidation reward. After the liquidation is completed, the borrower’s ownership of the collateral and the corresponding creditor’s rights will be lost simultaneously. The liquidator can be any user.
Proxima adopts a decentralized multi-chain bridge structure. Compared with a single-chain bridge, the multi-chain bridge separates the main structure of the oracle + consensus structure (for cross-chain behavior) from each target chain/starting chain, thus greatly reducing the complexity of the structure. The decentralization of oracles is also the main direction that Proxima pursues. In the process of collateral value evaluation, a mechanism for all network nodes to be controlled by consensus is established. It also covers the channels between multiple types of public chain assets and Ethereum.
The Proxima Eco Coin (PEC) token is the platform’s native cryptocurrency and can perform various tasks. It allows stakeholders to perform Proxima protocol upgrades safely. With the PEC token, Decentralized Autonomous Organizations (DAOs) can decide whether to add a new borrowing pool and modify the relevant parameters in the agreement by voting. DAOs can also utilize the token to vote on ecological fund expenditures of the Proxima lending platform.
The protocol also plans to add more use-cases to the PEC token in the future. For example, Proxima may support institutions to open custom small cryptocurrency lending on its platform, and they will need to lock PEC tokens on top of pledging funds.
Token Ticker: Proxima Eco Coin (PEC)
Token Type/Standard: ERC-20
Total Initial Supply: 6,980,000
10% to PEC Foundation
5% to Development Team
15% to Community Investment
70% dedicated to Mining
After PEC is listed, the new token output method is mainly obtained through mining. The output mining method is mainly through the blockchain decentralized flow pool, which encourages decentralized investors to provide liquidity for the secondary market, and newly produced PEC tokens are used as rewards.
The PEC team will also join other blockchain ecosystem participants to promote the PEC ecosystem jointly. Investors can obtain newly produced PEC tokens through irregular activities such as staking pledge mining. In addition, 20% of Proxima’s decentralized lending agreement profits will be used to repurchase and burn PEC tokens.
Proxima aims to shape the future of finance. The protocol offers distributed financial solutions, multi-party authentication and enhances industrial liquidity. In essence, Proxima is a decentralized smart lending protocol that aids the development of financial markets with the solution of cross-chain technology, standard unification, value exchange, branding, and community autonomy through mortgage lending and the replacement of digital assets.