In a thrilling development, Spectrum Finance is delighted to announce our collaboration with Optim Finance and their liquidity bonds into our Initial Stake Pool Offering (ISPO). This strategic move represents an exciting new chapter in our journey as we continue to innovate and push the boundaries of what’s possible in the decentralized finance (DeFi) landscape.
An Overview of Optim Finance
Optim Finance is a groundbreaking Yield Generation DeFi protocol that operates on the Cardano blockchain. It takes advantage of the composability of DeFi protocols and Cardano’s distinctive architecture to create and offer extensive access to yield-generation products, such as Liquidity Bonds and Strategy Vaults.
A Closer Look at Optim Finance Liquidity Bonds
Uniquely designed for the Cardano DeFi ecosystem, Liquidity Bonds represent a powerful innovation in blockchain technology. They leverage Cardano’s mature and sophisticated staking system and allow any participant to borrow or ‘rent’ ADA staking rights and the associated rewards for a fixed duration.
In essence, bond ‘issuers’ or borrowers deposit interest into a smart contract, while bond ‘buyers’ or lenders deposit ADA into the same contract. The borrower then controls the staking delegation of the lender’s ADA, delegating wherever they choose, and reaping all the staking rewards linked with the borrowed ADA.
Unlike traditional loans, Liquidity Bonds do not require substantial collateral from borrowers. Instead, the only obligation for borrowers is to deposit interest into the bond to compensate lenders for their ADA staking rights. Importantly, lenders do not actually transfer the custody of their ADA to borrowers.
The Implications for Spectrum Finance Stakers
The integration of Optim Finance Liquidity Bonds into Spectrum Finance’s ISPO translates into several benefits for our users. Foremost among them is the opportunity for users to expand their staking delegation without the need for additional liquidity.
The mechanism of Optim liquidity bonds allows users to leverage their delegation and magnify their staking position, resulting in a higher Spectrum Finance (SPF) Annual Percentage Rate (APR). This advantage comes at the cost of ADA interest paid to lenders over a standard ISPO delegation.
🟣 SPF0 — official Spectrum Finance ISP
Step 1: Go to Optim App. Connect your wallet
🚨 Make sure it’s the one you’ve got delegated to the Spectrum ISPO
Step 2: Click on “Issue Bond” from the dashboard
Step 3: Choose your duration, bond amount, interest rate
Note: Lower-interest bonds might take longer or not be filled at all.
Step 4: Click on “Issue Bond”
Step 5: Sign and confirm
Step 6: Review your bond
Step 7: Now that your bond has been issued, you need to wait for lenders to fulfill the bond. Optim Finance operates as a pool lending platform, meaning multiple lenders will join together to provide the requested amount and earn the associated interest. The time it takes for your bond to be fulfilled will depend on the availability of lenders.
Step 8: Once your bond is filled by lenders, you won’t be notified on the platform so make sure to check the status of the loan. At this point, click on the “Lend” button to proceed. By doing so, you will receive the total amount of delegation directly into your wallet. Congratulations! You have now increased your delegation into the Spectrum ISPO.
If you have any questions, you can always ask the Optim team on their Discord server and other social resources:
- There is always a chance of smart contract hacks in all DeFi. Optim Contracts have been audited twice by MLabs and Tweag and have been battletested for 9 months.
- For lenders, upon locking their ADA, they can’t access it until its maturity or if the borrower stops paying interest. There are secondary platforms where users can sell the bonds if necessary.
The collaboration between Spectrum Finance and Optim Finance marks a significant milestone in the evolution of Cardano DeFi. It provides an opportunity for our users to maximize their stake, demonstrating the unique potential of the convergence of these two forward-thinking projects.
We at Spectrum Finance are excited about the prospects of this partnership and look forward to exploring new frontiers in DeFi innovation, ultimately aiming to bring the benefits of decentralization to the masses.
🟣 SPF0 — official Spectrum Finance ISP