The NFT lending protocol has just rebranded as Parallel Finance from ParaSpace, but despite the name change, it is still dedicated to its core product and is working hard to overcome obstacles in the decentralized finance (DeFi) ecosystem.
The founder and CEO of Parallel Finance, Yubo Ruan, spoke with Nosisnews and highlighted the protocol’s strength in the NFT lending industry. Strategically, Parallel Finance uses collaborative price-discovery partnerships, dynamic loan-to-value ratios, and diversified liquidity pools to reduce exposure to market volatility risk. This method guarantees the protocol’s flexibility, which is particularly important when there aren’t enough bidders for the underlying assets.
Even though the market as a whole is in a slump, Ruan is certain that NFT margin lending will continue to thrive, thanks to its growing popularity among a select set of collectors and investors looking to increase their portfolio leverage.
Despite a 99% drop in NFT trading volume from May 2022’s high, Parallel Finance is confident in NFTs’ continued usefulness. In Ruan’s future, NFTs will transform into digital passports that grant access to many real-world and virtual utilities. Furthermore, he predicts the arrival of soulbound tokens, which will serve as non-transferable evidence of expertise, standing, and experience.
Parallel Finance is focusing on liquid staking and Parallel L2 as the protocol repositions itself to offer a wider range of DeFi services. The latter uses Arbitrum Orbi and zero-knowledge proofs to improve scalability and security while optimizing for quick transactions with cheap gas expenses. Also, the protocol is looking into ways to combine liquid staking and NFT lending so that NFT holders can get returns on their staked assets.
We are still working in our SF office. Just want to give a quick update to our community @ParaX_ai@ParallelFi
— Yubo Ruan (@yuboruan) November 26, 2023
1. Parallel/ParaX is one dynamic brand. ParaX is now Parallel (only a name change).
2. Apologies for the LTV confusion – fixed!
3. Pudgy Penguins Oracle & LTV… pic.twitter.com/joHIepUXxh
As a novel solution to the liquidity problems associated with staking, Ruan proposed providing tradable derivative tokens that represent users’ staked assets. No need to risk losing investments when users may take part in other investment options. Parallel Finance has come a long way from its 2022 start; in May, it hit a peak total value locked of $900 million, attracted more than 340,000 members, and was valued at $500 million.
Its position in the changing DeFi environment was further cemented in August with the merger with Parallel Finance.