Traditional DeFi retail lending often requires borrowers to provide collateral that exceeds the loan value by an average of 42%. This creates two issues: firstly, borrowers are unlikely to opt for a loan that is less than the collateral they provide unless absolutely necessary. Secondly, this approach leads to a downward spiral, as borrowers are discouraged from taking out loans without a pressing need. Additionally, the inconsistent deployment of assets results in volatility and significant variation in supply and borrow APR. As a result, borrowers are forced to pay higher APR for an already over-collateralized loan, further disincentivizing them.

To address these challenges, Hashstack offers a solution. It is a DeFi lending product that provides under-collateralized loans of up to 300% of the borrower’s collateral, without introducing additional risks to liquidity providers, borrowers, or the protocol itself. As the relationship between a wallet and the protocol strengthens, the borrower’s ability to borrow up to 300% LTV increases. The borrowed funds can be utilized in two ways: firstly, the entire debt can be used as trading capital, and secondly, up to 70% of the provided collateral can be withdrawn into the borrower’s personal wallet for personal needs, while the remaining debt is used as trading capital. In both scenarios, the protocol retains ownership of the debt while granting the borrower the right to spend it. To ensure effective utilization of the loan as trading capital, Hashstack carefully selects and curates the supported dapps, assets, and actions.