About LayerBank V2
LayerBank is a DeFi lending platform, a crypto money market service with an omni-chain environment. It facilitates loans using assets such as BTC, ETH, and USDC as collateral, with a bridge for users to lend to one another.
LayerBank makes the lending process much easier by steering clear of intermediaries for asset trading, futures contracts, and savings accounts, offering a more straightforward lending and borrowing environment.
On top of that, it works for all EVM-L2s removing chain-specific limitations and offering users improved liquidity and usability within an omni-chain environment.
The project’s mission is to create a safer and more competitive lending environment within the omni-chain money market, with the LayerBank DAO, powered by the ULAB token, playing a pivotal role in governance.
LayerBank V2: Main Features
- Lending;
- Looping;
- Adding LSD/LST markets;
- Leverage farming;
- The changed rewards system.
These features help boost capital utilization, generate more revenue, and leverage $LAB's buyback mechanism to increase the value of $LAB.
Lending
Source: LayerBank Docs
LayerBank's money market streamlines the process for users to supply assets, secure loans, and earn LAB tokens as rewards for their activities.
Users who provide liquidity to LayerBank's market are awarded lTokens. These lTokens reflect their share in the loan pool and their value increases over time due to the accumulation of interest. When users want to settle their loans, they can exchange their lTokens for the original deposit, increased in value.
lTokens represent the accrued interest on the pool's tokens and serve as the collateral lenders provide to LayerBank. At the launch of LayerBank, lTokens start with a 1:1 exchange rate with the original tokens. This rate alighs to the accrued interest, shifting the exchange rate accordingly.
Example, from ETH: lETH = 1: 1 to ETH: lETH = 1: 1. x, where 'x' denotes the accumulated interest.
To take a loan, borrowers must activate the 'collateral switch', using their deposited assets as collateral. This allows them to borrow in proportion to the value of their assets. So, if you deposit USDC and borrow against it, the USDC is converted into lUSDC.
Looping
The LayerBank platform has an opportunity for users to take leveraged positions. Users can deposit an asset and lend it repeatedly to increase the size of their position and by doing this, get greater exposure to the volatility of that asset.
For example, User A and User B are a provider and a user. User A is seeking a risky high return, while User B is looking for a safe low return.
- User A borrows assets from User B to increase the size of their position and be exposed to higher volatility on a particular asset.
- User B receives a higher capital utilization fee because their capital is lent to User A, and the size of the loan is increased by User A's.
By simplifying the whole process, the platform can increase capital utilization rates. The LayerBank’s upgraded one-click looping feature helps users earn higher returns on the same asset.
Adding LSD/LST markets
Source: dune.com
LSD/LST is the staked version of ETH, which is used in DeFi protocols that liquidate staked ETH to create new capital.
Source: dune.com
Now LSD/LST is not yet supported on the Linea chain. As soon as these tokens are supported, LayerBank will list the market and offer leveraged opportunities to crypto investors seeking for higher staking yields.
LayerBank will issue a 0% interest-bearing stablecoin using the market as collateral. The stablecoin issued by LayerBank will be the first interest-bearing stablecoin backed by LSD to be issued in the Linea ecosystem.
Users could mint the stablecoin at LayerBank using LST as collateral and freely utilize it within the Linea ecosystem to earn additional revenue.
Leverage Farming
Imagine the situation when the ETH/USDC pool rewards on a DEX on Linea benefit users. In that case, LayerBank users can indirectly make leveraged investments in that pool through the platform.
Lenders seeking a safe return can lend capital to adventurous borrowers and earn some extra returns. This can maximize the utilization of LayerBank's capital and provide more liquidity for other dApps that integrate with the protocol. There will also be additional revenue from the incentives generated by their pools, and the oversupply will be distributed to LayerBank's $LAB stakers.
LayerBank Linea Points Program
These loyalty points are your gateway to future Linea token distributions. By engaging with LayerBank daily, you'll earn points that impact your share of upcoming airdrops.
Earning Points:
- Supply $1+ in LayerBank: Earn 0.01 points per $ daily;
- Borrow $1+ from LayerBank: Earn 0.03 points per $ daily;
- Staking LAB on LayerBank: Earn 3000 points divided based on the daily xLAB score;
+ - Daily Bonus:
For every hour you engage with Layerbank, you'll earn an additional 1 point per hour for a total of 24 hours.
For example, if you deposit $100, borrow $50, and have an xLAB score of 0.1%, will earn 5.5 points daily. Additionally, if you complete these actions within a day, you will receive a daily bonus of 1 point. You need to interact with LayerBank daily to earn the daily bonus.
Potential Airdrop Distribution Categories
The Linea airdrop distribution is divided as follows:
- 40%: Lending, Borrowing, and Staking Incentives;
- 30%: LayerBank Community Airdrop (LayerBank Points mining program);
- 20%: Marketing: Funds for marketing and community events;
- 10%: Treasury: Allocated for the long-term sustainability and growth of LayerBank.
All this was made to build a stronger and more lively community by recognizing and rewarding active and loyal participation within the LayerBank platform.
Lending on Notum
If you’re interested in lending in more detail, you are welcome to read our articles on the related topic — https://notum.ai/invest/defi-lending.
You also have an opportunity to start your journey in lending right on the Notum app. Choose any protocol and token to start growing your crypto right away.
Q & A
Do you plan any incentive programs with other protocols or chains?
Yes, currently we are whitelisted on many chains such as Scroll, Linea, Mode, Manta, and B2, participating in their incentive campaigns. Additionally, we collaborate with restaking protocols to enable farming of their points on our platform. Notable examples include StakeStone, KelpDAO, and SolvBTC.
What chains will LayerBank support in the future?
We plan to expand to more than 16 multichains by the end of the year, with upcoming integrations into Nibiru, Mint, Boba, Movement, Monad, and Bera. We are also in ongoing discussions with many other chains.
How does Bank v2 differ from Bank v1?
V2 features an advanced staking system and vesting mechanism. These systems are intuitive and competitive, enhancing the protocol's sustainability by incentivizing deeper engagement with the platform. Although these features are not fully live yet due to the upcoming $ULAB launch, we expect the unified token economy to take shape across multichain markets post-TGE.
What fees does LayerBank take for lending and borrowing?
Currently, the protocol retains 50% of its revenue, but we plan to gradually reduce this percentage to offer more benefits to users by lowering borrowing APY through upcoming updates.
Does looping increase L.Points as well?
Looping is one of the easiest ways to farm L.Points. Essentially, L.Points are heavily weighted towards borrowing activities, and maximizing loan positions through looping can significantly increase L.Points farming. This benefit will be amplified once $ULAB is live.
What deflationary mechanics will $ULAB have?
The system operates on a deflationary model where emissions decrease linearly. A reward vesting system imposes fees on early exits (which are permanently burned), and an automated mechanism uses weekly platform revenue for $ULAB buyback & burn, reducing circulating supply.
When does LayerBank expect to airdrop $ULAB?
Look forward to November!
In which jurisdiction is LayerBank located?
We operate anonymously, but our team comprises multinational members based primarily in Northeast Asia.
What are the most important milestones you expect to pass shortly?
Our short-term goals include chain expansion, successful fundraising, and the launch of $ULAB.
Final Thoughts
LineaBank V2 brings new opportunities to the table, such as the $LAB buyback mechanism, looping, better scalability, and L2 integration
features.
The buyback mechanism will improve TVL and increase the value of $LAB through better capital utilization.
The project creates an ecosystem of incentives and rewards for multiple stakeholders across the protocol.