What is Fringe Finance?

Fringe Finance is a decentralized finance (DeFi) platform that focuses on expanding financial accessibility for web3 users. It aims to fully utilize crypto assets across different capitalization levels and is built to support multiple assets.

This allows the platform to provide DeFi lending, borrowing, and margin trading activities. The Fringe platform unlocks dormant capital, offering solutions for microfinance and the unbanked population.

One of the platform’s key objectives is to create a more inclusive financial system. This would help bridge the gap between traditional financial markets and the developing world of cryptocurrencies.

History of Fringe Finance

On October 24, 2020, Fringe Finance, previously known as Bonded Finance, was launched on the Ethereum blockchain. This was accomplished by Paul Mak, the CEO with a background at Citibank HK, and Brian Pasfield, the CTO with over 10 years of FinTech experience.

In 2020, the team raised $250,000 at a $5 million valuation in its seed round investment, with 50% vesting at TGE and 50% monthly vesting. In 2021, during its private round investment, the project raised $1.6 million at an $8 million valuation, with 50% vesting at TGE and 50% monthly vesting.

In 2022, in another private round investment, the team raised $400,000 at a $20 million valuation, with 100% unlocked vesting. Bonded Finance rebranded to Fringe Finance that same year. The project migrated liquidity and airdropped the new FRIN token at 1:1 to BOND holders.

On January 25, 2024, Fringe Finance V2 launched, expanding from Ethereum-only to Arbitrum, Optimism, ZkSync, and Polygon. This expansion has widened it’s user base.

Core Components of Fringe Finance: Price Oracle Model, Partial Liquidation Model and Atomic Repayments

Source: Fringe Finance Website

Price Oracle Model

Fringe’s price oracle model aims to provide reliable pricing data. It is manipulation-resistant and combines on-chain and off-chain data sources to determine accurate real-time asset prices.

The price oracle model is a crucial component that ensures interest rates and collateral values are based on current market conditions. This protects users from potential price manipulation and provides the platform’s overall stability.

Partial Liquidation Model

Fringe’s partial liquidation model allows for controlled and efficient liquidation of borrower collateral. The model is designed to protect the interests of lenders and borrowers on the Fringe platform.

The model breaks down the collateral into smaller portions, allowing for a more gradual and controlled liquidation process. This would ensure that lenders can recover their funds if a borrower defaults.

It helps reduce the risk of sudden price fluctuations that could negatively impact users.

Capital-Efficient Interest Rate Model

The interest rate model optimizes rates for lenders and borrowers to efficiently utilize available capital. It adjusts the rates based on market conditions, asset volatility, liquidity, and risk to ensure funds are fully optimized.

It ensures lenders can earn competitive returns on their assets. It gives borrowers access to affordable capital, helping to maintain a balance between supply and demand. It uses numerous criteria to determine appropriate rates for each asset, ensuring profitability for all participants.

Atomic Repayments

Fringe’s atomic repayment simplifies debt management for borrowers, especially during volatile markets. It allows a borrower to pay multiple loans simultaneously, reducing the risk associated with price volatility.

Atomic repayments also help to streamline the debt management process for borrowers. The interface allows users to settle all outstanding debts with a single transaction, saving time and reducing the potential for errors or missed payments.

Non-Rehypothecation Safety Model

Fringe prioritizes security with its unique model that prevents collateral rehypothecation. This means user funds are left exactly where they are kept, guaranteeing greater control for borrowers and peace of mind for lenders.

By implementing a non-rehypothecation safety model, Fringe provides a higher level of security for both lenders and borrowers. The model aims to build confidence in the project, ensuring that lenders can be confident that their capital is protected.

Features of Fringe Ecosystem: Fringe Lending, Fringe Staking, Margin Trade and Amplify, USB Stablecoin and Multi-chain support

Fringe Lending

Source: Fringe Finance Website

The Fringe lending platform is a decentralized interface for lending and borrowing assets. It automates all aspects of the transaction, ensuring that each transaction follows programmed parameters.

Using the platform, lenders can earn interest on their assets while borrowers can access adequate capital. It also ensures the security and transparency of user activities by utilizing the underlying blockchain infrastructure.

These immutable ledger records allow other users to make informed decisions when interacting with the platform.

Fringe Staking

Fringe staking allows users to stake their assets and earn rewards. The platform’s staking mechanism incentivizes users to participate in validating transactions. This participation ensures the security and integrity of the network.

Staking also allows users to participate in the platform’s governance. By staking their assets, users can help shape the platform’s future and ensure it remains aligned with their long-term interests.

Margin Trade and Amplify

Source: Fringe Finance Website

With Fringe margin trade, users can trade with leverage. This allows users to take advantage of short-term price movements and earn higher asset returns. In addition to margin trading, Fringe provides an Amplify feature that allows users to increase their exposure to the market

Users can specify their long or short positions and increase their asset value by looping their positions. By amplifying their margin trade positions, users can earn higher returns on their assets while managing their risk.

USB Stablecoin

Source: Fringe Finance Website

USB stablecoin is a feature of the Fringe Finance platform that provides a stable and reliable store of value. The stablecoin is pegged to the US Dollar, ensuring its value remains stable and predictable.

This allows users to store their value and earn interest on their assets.

Multi-Chain Support

Source: Fringe Finance Website

The Fringe Finance platform supports multiple chains in its ecosystem. This allows users to access a diverse range of assets across multiple blockchain networks and participate in lending and borrowing activities across different ecosystems.

The multi-chain feature increases the platform’s overall liquidity and accessibility. The supported networks include Optimism, Polygon, zkSync, and more.

What is the FRIN Token?

The FRIN token is the native cryptocurrency of the Fringe Finance platform. It is a decentralized and secure means for transacting, lending, borrowing, and staking.

As a decentralized token, FRIN allows users to conduct transactions without third-party involvement. It also allows users to stake, earn, and participate in governance. The total supply of FRIN tokens is 1 billion, with 339 million in circulation.

Is the FRIN Token a Good Investment?

The FRIN token is the native token of a decentralized project that allows users to earn by participating in governance. This also gives the holders voting rights to decide the project’s future.

The combination of its user-friendly interface and multi-chain structure positions the Fringe project to fully utilize the DeFi space, giving the Fringe protocol access to limitless growth.

Risk Analysis

Advantages

The Fringe Finance ecosystem offers a secure platform for lending and borrowing, with a decentralized backend that ensures independence and security without a central authority.

The core technologies ensure security, transparency, and efficiency, making Fringe Finance a reliable and accessible platform for users of all expertise levels.

Disadvantages

The complexity of the platform’s features and the need for users to understand the core technologies of decentralized finance may create a barrier to entry for some users, potentially limiting the platform’s adoption and growth.

Its added features, like Amplify, can only be fully utilized by experienced members of the crypto space.

Challenges

The platform’s decentralized nature, reliance on smart contracts, and decentralized governance mechanisms make it vulnerable to technical issues and potential security risks.

It is also a part of the crypto space, making it susceptible to price volatility and regulatory uncertainties.

Competitive Analysis

Compound Finance and Fringe Finance are decentralized lending platforms that offer unique features and benefits to users. Compound Finance is known for its simplicity and ease of use, focusing on providing a user-friendly interface for lending and borrowing.

On the other hand, Fringe Finance is designed to provide a more advanced and secure lending experience. It uses such features as partial liquidation, atomic repayments, and a non-rephypothecation safety model.

In terms of smart contracts, both platforms conduct automated lending and borrowing. However, while Compound Finance is known for its simplicity and ease of use, Fringe’s advanced features make it a more attractive option for experienced users.

How Can You Own FRIN?

Users can follow a simple process to own FRIN tokens and become a part of the Fringe Finance ecosystem.

Setup a Wallet

One way to own FRIN tokens is to purchase them through an exchange. For this, the user must create a Gate.io account, complete the KYC process, and add funds to the account to buy the token.

Utilize the FRIN Tokens

Once users have acquired FRIN tokens, they can explore the Fringe Finance ecosystem by conducting transactions, managing assets, and participating in governance.

Take action on FRIN

Users can trade FRIN here.