Nick Chong
Decentralized finance project Cream has been the subject of much attention in the past few weeks. Its native token, fittingly named CREAM, is up 40 percent in the past 24 hours alone.
Cream is a money market project forked from Compound. The project garnered traction during DeFi summer after it released a yield farming system for its native token CREAM. It quickly became subject to some backlash, though, as there were investors that were criticizing the project’s addition of questionable cryptocurrencies.
The project has since been absorbed into the Yearn.finance (YFI) ecosystem, which has given it renewed buying pressure and renewed development activity.
Cream Introduces the Iron Bank
Cream has been in somewhat of a lull since the summer. The protocol’s total locked value dropped after CREAM incentives ended to some extent and as the fears spread about the project’s involvement of questionable cryptocurrencies.
Yet this is changing as Cream developers have introduced a new product called The Iron Bank.
According to a blog post announcing this new update, The Iron Bank is a segment of the Cream protocol that will basically lend capital to protocols on a whitelist basis. What makes this different than normal lending protocols is that loans can be taken without directly putting up capital, allowing for more capital efficiency.
“As protocols replace enterprises, the new face of corporate credit will be protocol-to-protocol lending, which could one day far oustrip DeFi peer-to-peer lending just as corporate lending markets far surpass peer-to-peer markets. This is why we launched the Iron Bank: we believe protocol-to-protocol lending will one day be a multi-trillion dollar market.”
Introducing The Iron Bank 🏦
– Zero collateral, protocol-to-protocol lending platform and liquidity backstop for the entire #DeFi ecosystem
– Launch Partners: Alpha Homora V2 @AlphaFinanceLab & Yearn v2 leveraged vaults @iearnfinanceRead more 👇https://t.co/L9mDv1odjI
— Cream Finance 🍦 (@CreamdotFinance) January 14, 2021
Cream is currently working with Yearn.finance’s Vault system to use The Iron Bank to boost yields and the overall user experience.
The Iron Bank will allow Yearn to “develop leveraged yield-farming strategies and cross-asset strategies.”
According to Andre Cronje, the founder of Yearn.finance, and the Cream team, this system will allow for up to “90x leverage on stablecoins or 80x leverage on ETH to farm SUSHI, CRV, ALPHA.”
Cream will also be working with Alpha Homora, a DeFi lending tool by Alpha Finance Lab that allows users to obtain leverage on their Uniswap and SushiSwap liquidity provider positions.
DeFi analysts say that this development is extremely positive for the cryptocurrency, as it will drive more value to CREAM holders and to the overall Cream and Yearn ecosystem.
“DeFi Ted” commented on the news:
“Iron Bank will position itself outside of $CREAM V1 which is the retail focused, long tailed assets that the platform is known for. This is institutional grade credit. Exactly that credit. Which comes at a premium.”
$CREAM – ok so been pretty vocal about this last couple of weeks but let me explain why. Upside and lots of it. https://t.co/B8MYPXlXuO
— DeFi Ted (Bakes) (@DeFi_Ted) January 14, 2021
Per CryptoSlate market data, CREAM is up 40 percent in the past day due to this news as investors have embraced the news.
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