Doing it the Swiss Way
What differs us from the competition?
Many people lost faith because of what happened to different centalized lending platforms in the past months. We totally understand that but we want to point out what we are doing different:
- We don't gamble with clients money
- We generate real yield
- We use off chain liquidity
- We will never get margin called
- We are regulated and based in Switzerland
- We only yield with stablecoins
- We have all possible insurances in place to protect our users against any loss
- Most yield is generating by giving out collateralized loans
- We are protected against stablecoin depegging
- We pay interest in kind (in the currency you deposited)
One of the unique selling points of DeFi.ch is its strong connection to the traditional banking sector in Switzerland. We have achieved different partnerships with Swiss Banks which allow us to borrow stablecoins for volatile crypto assets. That means we have simple access to cheap off-chain liquidity coming directly from Swiss Banks. The most important point about off-chain liquidity is: there is no need for over-collateralization and there is no automatic liquidation.
This means for our users: Our Swiss Banking Partners borrow us stablecoins with a 100% LTV (Loan-to-Value) for volatile crypto assets.
In simpler terms this means: If user A deposits 1 BTC on DeFi.ch (Bitcoin price at time of writing: 21'500 USD) we can borrow from our Swiss Banking Partners 21'500 USDC/USDT/DAI. The freshly borrowed stablecoins are then used to generate interest.
Since we are borrowing directly stablecoins from our Swiss Banking Partners we are protected from any stablecoin depegging which may occur - the currency risk is not on our side!
The biggest risk of everyone who is borrowing liquidity for collateral is a margin call. Because of crypto's volatile nature margin calls are daily business in the crypto world. In the decentralized world everything goes trustless - margin calls are calculated and executed automatically. While in the traditional finance sector you know your counterparty and therefor there are no automated margin calls. In our case our Swiss Banking Partner would just ask us to return a partial amount of the stablecoin loan instead of selling our collateral. And since we are yiedling in a highly diversified matter just with stablecoins we will always be able to pay back our debt.
There are many interesting yield opportunities around in the crypto space. While we are always looking for the best possible opportunity for our users we learned something very important in the past: We are yielding with stablecoins only!
Many projects are trying to attract new capital by promising very high yields to new users. While this seems to be a working method to gain attention, it is dangerous in the same time: Most of this high yields are paid in a project specific token which can be printed without any limit. This can lead to a death spiral which in the end affects users negatively. Therefor we stick to reasonable stablecoin yield strategies only!
When it comes to real yield we are speaking most of the time about collateralized loans. Most of our yield is generated by giving users secured loans! This business sector is growing very fast and is secure and very profitable. Especially institutions are willing to pay interest for collateralized loans. Our strong roots in the Swiss Banking Sector allow us to find a working solution for nearly every loan request. Our users profit from a steady yield generation while there is no counterparty risk since every loan is over-collateralized.
All the above mentioned points are just a small portion of what differs us from other platforms out there. We are bringing together the best of both worlds, in a fully compliant way. We are generating real yield easy usable for everyone - and even for non-crypto people we are offering services which will make them reconsider their opinion about blockchain and crypto in general. DeFi.ch is pushing crypto adoption in both ways by onboarding everyday people aswell as showing to the old finance sector that new tech is nothing to be afraid of. While we are sure that crypto is the future we also believe that it will not fully replace the traditional finance industry today or tomorrow - we believe that with our help both industries can grow together.