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Features and Differentiators
The DeFi market is made up of savvy investors and users who can distinguish between services and understand the underlying mechanisms behind financial applications. When they evaluate the most of the time, they take account of the following:
- Usability and platform speed. This implies that there is consistent documentation with examples and step-by-step guides, standard integration interfaces such as APIs, a not-so-steep learning curve, and in some cases, a vibrant group of developers contributing to the product.
- Liquidity. The minimum available liquidity offered by the platform is crucial in making a decision on whether to use it or not. Arbitrageurs are looking for a minimum guaranteed liquidity per ERC20 token large enough to satisfy their needs quickly.
- Cost. Fees for transactions and operations must be as minimal as possible. DeFi services should never be free of charge as platforms need funds to operate and the network needs gas to be able to execute transactions, but at the same time, these fees should be conveyed fairly and transparently communicated. The same goes for token-related fees.
- Diversity. The range of ERC20 tokens offered on the platform is important for market-making and allows users to quickly swap one token for the other and refinance their loans. This is also the most lacking feature in other platforms specializing in lending. We will provide the widest variety of tokens possible, targeting various markets and clients.
Equalizer is the first completely decentralized flash lending platform, with its main business model tailored to the unique advantages and challenges of this category of financial products. The token range available on the platform is the highest on the market since it’s only limited to the number of ERC20 tokens available on the Ethereum blockchain. All tokens can be listed on the platform, and the community dictates their available liquidity. The diversity is driven by the audience that connects to the product and not by internal creators, making Equalizer a completely open product for the community, controlled by the community.
Token holders are empowered and able to participate in the decision-making processes, thereby fueling the network’s governance and having a real effect on the DeFi industry. Our leading competitors build their platforms around other financial products, such as collateralized loans or token swapping. We are the first dedicated platform for flash loans. This implies a fine-tuning of our architecture and governance model that allows us to provide unique custom-tailored core services to users and become the main building block of this sector.
The strategic advantages of the platform built by us easily stand out when looking at Equalizer from the lens of the market:
Our core business is not based on fee revenue; therefore, fees are dictated by a fine-tuned algorithm that considers market forces such as the number of transactions, interactions, and community through governance voting. Unlike competitors that have built the core of their business on fee collection and have little to no flexibility in this aspect, Equalizer has its fees updated in real-time. The applicable flash loan fees can be updated based on the decision of the governance votes or based on an algorithmic approach to find the right balance between offer and demand. This suggests that the payments would be high enough to attract liquidity suppliers but minimal sufficient to persuade arbitrators to use the platform and earn a profit.
Additionally, there will be the possibility to create custom rules for specific tokens or vaults through community governance that offer the users bleeding-edge flexibility and versatility to market conditions. The aim is to use all these fine-tuning mechanisms to provide an ecosystem that will offer fees big enough to motivate liquidity providers but small enough to convince arbitrageurs to use the platform and generate profit.
At the moment, some competitors are escalating the fees for flash loans, making it extremely difficult for borrowers to benefit from this feature. Our purpose is to make this service affordable and allow our users to take out loans without the opportunity to cost their entire profit.
Finding liquidity in periods of high market volatility is usually a challenge as liquidity providers usually withdraw their assets. By incentivizing liquidity providers to continuously stake their funds for longer periods of time continuously, we aim to provide a minimum level of available liquidity in each token’s vault, even in high volatility periods.
The flash loans got their name from the proverbial transaction speed. We aim to bring the namesake to the next level by building a bespoke infrastructure that will perform high-speed transactions in parallel. In an industry where any millisecond matters, providing this advantage to our users will consolidate our position as a reference solution for any simple or complex trading strategy for arbitrage, rebalance, liquidation or collateral swapping.
While competitors focus on collecting token listing fees, Equalizer allows anybody to list tokens without additional costs. We believe that decentralization should bring virtually equal rights to token creators, not impose absurd listing fees that may run them bankrupt. As such, any user will be able to create a new Equalizer Vault for any standard token. This means that the community will be free to list as many tokens as they want or are needed.
Our core business model is to offer one, well-defined service - flash loans. In contrast with our competitors that offer the flash loan service as a side business model, we specially design our platform with focus on one single generic capability. This gives us more flexibility to adapt to future market conditions and also to scale vertically (bigger volumes) and horizontally (multi-chain and cross-chain)
The DeFi ecosystem is not a set of isolated islands but an interconnected web of markets and protocols. Recognizing this reality allows us to serve our users’ best interest by providing easy and fast integration with other protocols, scripts, or bots in the market. For this purpose, Equalizer will provide an open and standard interface to interact with. This will include extensive documentation and examples.
Unlike the rest of the market, our core business is creating a community that is able to contribute to this project. Token holders’ rights are embedded in Equalizer, creating a community-driven platform based on instant governance. Our competitors focus only on their core business: fee collection or listing fees, making governance their lowest-priority item. More information regarding our governance model is available in the Governance chapter below.
The Equalizer platform will be fully compatible with any EVM-based blockchain (such as Binance Chain, Tron, Ethereum Classic etc); this goes a step above the average competitors. However, we don't plan to stop here, we aim to develop flash loan applications for any other chain supporting smart contracts (such as Tezos, Algorand, etc.). By providing a solution that spans multiple chains, we aim to provide cross-chain interconnections, creating unique and previously untapped market opportunities for our customers.