An overview of 0VIX: A Polygon powered DeFi Lending Protocol

6 min readMay 25, 2022

Background

There have been new developments in the crypto market space within the last decade. However, most of these developments have had little to no impact on the way finance is done every day. This is where 0VIX can help — using a unique lending and borrowing protocol that will provide a stable way for users to acquire Polygon tokens, regardless of what the price does in the future.
In this post, I am going to introduce you to this exciting cryptocurrency project and tell you more about what it does and how it can be used for everyday transactions.

What is DeFi?

Traditional banking is not always as safe as you would think. Living in the digital age where information is never slow to reach our fingertips makes it difficult for traditional banks to keep up with the ever-changing financial landscape. Recent innovations have brought forth a new era of finance, DeFi (Decentralized Finance).

Nowadays, people can create their own lending opportunities through cryptocurrency trading and blockchain technology without needing a bank. With 0VIX’s revolutionary peer-to-peer lending platform for decentralized finance, borrowers and lenders are in control of their loans without any third party standing between them. As a result, there is no government-controlled entity for regulators to go after when things go wrong.

Why is DeFi so Important?

Cryptocurrencies are digital assets or tokens that can be used in many ways. However, they often struggle to fulfill the same functions that fiat currencies do. This is where DeFi comes in. The emergence of DeFi means that cryptocurrencies can now act as functional currencies rather than just assets, bringing forth new opportunities for users and benefits for the industry.

The first and most popular form of decentralized finance is lending — it allows parties to get involved with cryptocurrency without needing a lot of experience, knowledge, or resources. Cryptocurrency lending usually involves exchanging, borrowing the coin for other purposes (trading, investment, etc.), and returning the invested coin.

What is 0VIX Protocol?

0VIX is a decentralized open-source money market protocol built on polygon for facilitating cryptocurrency lending and borrowing enhanced with veTokenomics.

0VIX platform offers transparency, convenience, and decentralization to the loan process via their groundbreaking Smart Contracts technology. This means that there is no third party to manage, monitor, or be held accountable for anything that may happen within the process.

Unlike many other lending platforms, 0VIX does not require you to pay fees for your loan’s collateral (it is free), nor does it require you to pay interest on your loans (it is also free).

Aims of 0VIX Protocol

To give users permissionless lending and borrowing
Instant supply or withdrawal of assets from the shared liquidity market
Instant borrowing from any of the liquidity markets using the supplied assets value as collateral
Access to the transparent view of interest rates based on the asset’s market supply and demand

Benefits of Using 0VIX

0VIX is an easy-to-use and transparent platform with low transaction fees. It helps lenders and borrowers find one another and makes it possible to create an automated lending system. 0VIX ensures that the loan is being given to the appropriate individual, who is both eager and able to repay the loan. On top of it all, you have complete control of your money when you’re using 0VIX.

Borrowing is made easy, and assets are used as collateral. This means that a loan is only issued when the borrower has enough worth in their assets to cover it.

Features of 0VIX Market Protocol

Supply Assets

Users can choose any of the listed assets to invest in as well as supply liquidity to earn very high APYs, depending on the market. 0VIX markets are accessible from the website’s homepage.

All a user has to do to supply a token to the platform is to:
1. Go to the “Markets” page and select “Supply Markets”
2. Select the asset you want to supply.

3. As soon as the user has approved the asset class, he or she can choose the amount of the token to be deposited or press Max to deposit the entire balance of that token.
4. By clicking on the Supply button, you can initiate the transaction and deposit the tokens.

There is no maximum or minimum deposit requirement. Users can deposit any amount. A user receives oToken in exchange for supplying an asset to 0VIX. These oTokens are interest-bearing versions of the underlying asset that can be used in a variety of ways with the protocol.

Borrow Assets

Users can borrow assets and offer already supplied assets as collateral for the borrowed assets. A borrowing limit is set to enable users to pay back their loans on time. The user can borrow more money if the collateral value increases. Collateral is at risk if the collateral value drops or if interest accrued on the borrowed balance exceeds the liquidation threshold.

Steps to borrow an asset

Navigate to the “Borrow Market” section of the “Markets” page.
By clicking on the asset class you want to borrow, you can narrow down your options.
Enter the desired loan amount in the first dialogue box and click “Borrow.”
The borrower is successful once the transaction is confirmed and interest begins to accrue.

Repayments
The repayment period for loans is not fixed. Users whose positions are safe may borrow for an indefinite period of time. Over time, however, the accrued interest will grow, causing the user’s health to decline, resulting in more assets being liquidated.

You can find the repayment dialogue under “Borrow” in the market section.
Once the “Borrow” dialogue box has been opened by clicking on an asset class, select the “Repay” tab, enter the desired repayment amount, and confirm the transaction.