The protocol will expand to liquid staking and layer-2 solutions while retaining its NFT lending services.
Despite rebranding to Parallel Finance for a greater focus on the decentralized finance (DeFi) ecosystem, the nonfungible token (NFT) lending protocol ParaSpace will continue to focus on its core product amid sector woes.
In a conversation with Cointelegraph, Yubo Ruan, founder and CEO of ParaSpace (now Parallel Finance), explains that the protocol uses a combination of diversified liquidity pools, dynamic loan-to-value ratios, and price-discovery partnerships to mitigate the risks associated with high volatility, which can often result in a lack of bidders on the underlying asset.
"Despite the market downturn, we believe NFT margin lending remains viable," said Ruan.
During the past year, NFT trading volume has plunged by 99% from its peak in May 2022, although there have been signs of stabilization with blue chip collections. "Also, we're looking at the evolution of soulbound tokens that serve as non-transferable proofs of experience, skill, and reputation."
As the protocol rebrands to offer a greater variety of DeFi services, Ruan says the two main focuses are liquid staking and Parallel L2.
"Users receive a tradable derivative token, representing their staked investment, which can be traded or used like other crypto tokens. This approach addresses the typical liquidity challenge in staking, allowing users to engage in other investment opportunities without un-staking their assets."
Ruan founded ParaSpace in 2022.
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