Take A Plunge Into The DeFi World With Our Compound Clone Script

The idea of cryptocurrency originated in the 90s but back then, it did not strike a chord with the then business market. However, 20 years later, it was again called back into the business. Within the next decade, cryptocurrency became the next big thing. Like many other cryptocurrency platforms in the market, the Compound Clone script is a similar take based on decentralized finance. 

The introduction of decentralized finance or DeFi in the crypto market changed the whole pallet of the crypto sphere. DeFi financial construction is essentially built upon Ethereum blockchain technology. It is capable of handling multitudes of financial services with subtle reliability. The USP of such a platform is the smart contract that it comes with. Stunning protocols are imposed on the DeFi field for protection, and Compound is one of them. 

The Compound Clone script is a ready-made option for companies wishing to embark on the crypto sphere and has some advantages. As cryptocurrency is getting bigger and bigger, there has been a growing demand for developing different crypto-based platforms for lending and borrowing crypto coins or assets. In these trying times, a completely decentralized platform like Compound Clone script with an algorithmically operated interest rate protocol can be the need of the hour. 

It also opens up a space for users to affix collateral and borrow and lend crypto assets earning consistent interest amounts at the end of the process. Depositing the assets into Coupund’s liquidity pool, an automated interest calculation mechanism will be triggered immediately. This will result in the company getting infused with a massive profit. It also supports withdrawal or repayment of the collateral effortlessly. 

The Future Scope Of A Decentralized Finance Protocol

The banking system often falters in many instances, deteriorating the trust and reliability of audiences built upon the company’s time and effort. However, as technology advances, many solutions have been introduced to keep alive the traditional banking system that benefits us all differently. The Decentralized Finance or DeFi protocol in Compound Clone script and similar models helped fill the void. 

The banking system industry has a huge user base with over 200 million active users. DeFi protocols registered success in numbers, locking around $800 million, dominating the industry, and converting it to a ratio of 2/3rd lending. This has become a phenomenon that can be credited to Decentralized Finance, and on the same note, there has also been an influx in companies joining the profitable sector. 

The Key Functions Of A Compound Clone script

As mentioned before, the Compound Clone script is a platform designed to borrow or lend crypto assets for business purposes. There are some specific functions for which Compound has been in so much demand. The DeFi protocol based upon which Compound has been built revolves around the following vertices. 

Borrow

The script can be used for either borrowing or lending crypto tokens or assets. For borrowers taking a loan can often be tricky. There are certain rules and regulations other than the eligibility criteria, all of which can often seem hectic. The platform will guide its users in acquiring the required loan amount without hassle. 

Liquidate

The Compound Clone script allows its users to affix collateral. Usually, the collateral gets wasted. However, in a decentralized finance platform, by affixing the collateral, the user gets to reclaim the losses. 

Repay

Any user that has taken a loan from the platform is bound to repay it. The platform has automated options for users to pay back loans easily. The interest amount will also be embedded with the system, so the user does not have to be bothered or be attentive about the deadline. 

Supply

The users who have only come to the platform for borrowing will be needed to ramp up the liquidity pool. For this, they will need an adequate supply of the DeFi tokens. Compound Clone script

Withdraw

Whatever amount of token or assets supplied to the liquidity pool should also have the option of withdrawal. As the platform allows its users to deposit assets or tokens at their convenience, it also allows the same during withdrawal time. 

Detailed Look Into The Dual Token System Of The Compound Clone Script

The best thing about the Compound Clone script must be credited to its dual token system. Usually, decentralized finance protocols are supported with a single token system. However, Compound is one step ahead in this matter by deploying a dual token approach. Thus, the requirement for cToken and COMP. 

token

The tokens are the native tokens of the Compound platform. They are considered almost equivalent to ERC 20 tokens. Like ERC 20, these tokens can also be programmed, redeemed, transferred, and traded anywhere. The DeFi lending protocol measures the immensity of the fund amount deposited by lenders. 

Once the user deposits anything equivalent to the ERC 20 or ETH tokens, the token generation starts, followed by the transfer. When a user applies for a loan by depositing ETH, they are immediately lauded with cETH. This cETH is the return for the collateral deposited earlier. 

COMP

Apart from the general trading tokens, the Compound Clone script also supports voting tokens. COMP is a unitary governance token that allows the holder with voting rights to make proposals. These proposals can also determine the protocol’s direction and future. 

Out of an entire lot of tokens, about 42.3% is reserved to leverage the token for earning. The user can do this to earn profit initially. The rest of the COMP tokens are distributed to suppliers and borrowers in an individual market. COMP looks after the fluidity index of the system when combined with cTokens. 

Lending Interest Rates In A Blockchain Infused Compound Clone Script

As mentioned a few times, the Compound Clone script is essentially used for borrowing and lending purposes. Naturally, it generates an interest rate for the lender. When an Ethereum block gets mined, it generates an interest rate. The platform zeros down the lending interest rate based on several factors. Let us discuss those before moving forward with more details about the script. 

• Every crypto market has available liquidity. Relying on the available liquidity, the rate of interest can be determined. 
• Interest rates are very easily affected in many cases. For instance, real-time supply and demand are two important factors to consider. Changes in these factors influence the fluctuation of the lender’s interest rates. 
• The user needs to know how the interest rate fluctuation usually occurs on a Compound Clone script. A low liquidity pool indicates a high-interest rate, and low-interest rates only signify a high liquidity pool.

The Working Process For A Compound Clone Script Powered By A DeFi Lending Protocol

For developing a Compound Clone script from scratch or acquiring a white-label script, you will still need a fair idea of the working process. The working process entails the whole flow of the platform with details of different processes. Let us have a clear look into the workflow of the Compound clone. The workflow is divided between two main operations of the platform, lending, and borrowing. 

Workflow For Lending

• Initially, the lender is supposed to deposit the tokens or assets. The decentralized finance platform with the compound wallet will safely store and lock away this amount. 
• The platform has an automated measuring system for calculating interest rates. The interest rates are formulated considering the amount deposited and the amount transferred to users. The token that is lent out will inherit the denominations to provide users with authenticity.

Workflow For Borrowing

• The Compound Clone script prompts its borrower to deposit a certain amount as collateral. This collateral amount is usually larger than the borrowed amount. Once this transaction is complete, the borrower can get the number of crypto-assets they promised. 
• Even though the platform offers a huge range of lending amounts, the user has certain limitations regarding the amount borrowed. The protocol fixes the rate depending on the quality and quantity of the locked assets. 
• As a predominantly lending and borrowing platform, it is dependent on the interest. When a user borrows crypto assets from the platform, they must be ready to pay the interest. This is also accompanied by a deadline. The borrowed cryptos will be liquidated if the user fails to pay the interest.

Essential Features For The Compound Clone Script

The Compound Clone script still needs some crucial features for its functioning. These features are built and implemented considering the business requirements. 

Lending Or Borrowing Cryptocurrency

As a platform primarily designed for crypto assets lending and borrowing or simple trading, a feature relevant to such trading must be considered. With the inclusion of lending and borrowing features, the user can easily access the financial services offered under the platform. Apart from the simple trades, they should earn some interest on each deposit.

Ultra Responsive Web Panel

The Compound Clone script comes with agility in terms of participating in numerous channels. This decentralized finance platform can be extensively streamlined, making it easy to use. The benefits of such a platform are so transparent that anybody can take notice of the fact. 

Simplistic KYC Verification

KYC & AML screenings are two verification tools used to establish personal verifications. For a trading platform, user information and authentication are equally important. This will eliminate phishing activities or other types of issues related to trading transparency. 

Referral

Referral options were popularised with the growth of eCommerce applications. Most digital applications of the time consider referral as a great inclusion. The Compound Clone script also uses this metric to get its users to earn exclusive benefits and rewards. The user just needs to send out referral requests to other parties, and with each successful referral a user records, they are immediately prompted with a reward. They can send the request to any friends, family or other people asking them to participate in the lending and borrowing program of the DeFi platform.

Voting Options And Rights

As we have said, the COMP tokens are primarily designed as governance tokens. These tokens are curated for using them in the voting process. Users with the COMP token can participate in voting, purpose planning, and other decision-making options. 

The Advantages Of Building A Compound Clone Script 

We have come a long way into digitalization from the conventional loan process. The USP for a Compound Clone script lies in this transition of financial services into a more technologically advanced blockchain mandate. Digitalizing the whole process of loans creates an attractive and effective option for users. Let us decipher why it is the way it is. 

• COMP token has reached quite far, and its growth indicates the global acceptance of DeFi platforms and protocols. So, there is a lesser risk of loss than it was before. 
• The absence of intermediaries has helped the platform in many ways. Among which, the most valuable one can be stated to be the capability and capacity of earning yield to a large enough user base. The yield is earned through crypto-asset appeals. 
• There is not a single ounce of doubt about the usefulness of traditional banking systems. However, the Compound Clone script has a way of offering something better. For instance, the interest rates are far greater in a crypto space than in a traditional banking environment. 
• It is not hard to figure out that all these benefits together result in an influx in the user base. As the user base increases, the commission rates simultaneously increases. At the same time, the profit ratio also witnesses a rise. In short, it creates a win-win situation for all parties on board. 

Conclusion

For starting up a DeFi lending/borrowing platform like Compound Clone script, you will need to go through a certain process. A script developer will keep in mind the business requirements and keep you involved in every step of the process. They will plan and design the whole thing under your supervision. Then go on to develop the platform. Before deployment, there has to be testing that will make the platform get rid of all the flaws and shortcomings as users start participating in trades.