Native Loan Collateral

These are project run or managed pools. Each project, NEON Protocol included, can have it's investors to stake their native token and then assign it to the project's native loan collateral pool.

This means that the project will be able to use this pool as collateral, and request loans in ETH or other stables for a duration of time, on our lending platform.

Project partnerships are crucial to Neon Protocol in order to bring as much token variety as possible. This is a win win scenario for us and the projects we partner. They will provide their investors with an value adding risk management services, the project itself in turn will benefit from having more revenue or liquidity for growth.

Pool Collateral

A project can use its pooled tokens as collateral to access loans on our lending platform. This means the project on behalf of its investors who assigned tokens, is the borrower, and will take full liability or risk on the outcome of those loans.

We rely on projects having their own farming strategies and farmers to write these. Each project depending on its intended use of the borrowed liquid cash, will repay and reward its collateral poolers using other revenue streams.

Example:

Neon Protocol assigned farmers can identify demand for Put Options of our token (NEON as underlying asset).

The farmers assess that we are in a bull market for the next 2 years minimum, and that these put options with a duration of 1 year appear lucrative with minimum to no risk.

NEON investors can stake tokens and assign them to a NEON hedge liquidity pool.

The farmers then write Put Options with NEON as underlying asset for a duration of 1 year, pricing the option based on lucrative OTC rates.

Conclusion:

The goal for Neon Protocol and its investors is to profit from the cost paid by the option takers, if the price of NEON is above the strike price or value when the option expires in 1 year.