Teller Finance, a cryptocurrency infrastructure provider is looking to create collateral-free lending in decentralized finance (DeFi). It offers holders of the USDC stablecoin, backed by the dollar, the opportunity to lend capital to a travel insurance company. This seems like a great opportunity to diversify activities within decentralized finance.
DeFi news between CreditFi and Koala
CreditFi and Koala have collaborated to launch lender-powered, cryptocurrency travel insurance globally. At a time when traveler volume is more volatile than usual. Users can benefit from an Annual Percentage Rate (APR) of at least 15% when providing their liquidity.
Teller Founder and CEO Ryan Berkun announced the company’s excitement to help its partners unveil the first DeFi-native travel insurance program. They are about to usher in this new era of travel-related lending and borrowing. CreditFi and Koala offer travelers peace of mind and a positive lender incentive. This would be achieved by offering DeFi services to an industry that until now has only been supported by traditional finance.
According to an announcement, Teller’s CreditFi uses a platform that brings together decentralized capital for insurance technology companies. This is in an effort to connect liquidity providers to Koala Travel Insurance Company.
” When we started thinking about how to bring loan requests from businesses to the channel, Koala was one of the first businesses to contact us. said Ryan Berkun, CEO of Teller Finance, in an interview. ” So you have a travel insurance company making money on premiums and a good portion of those premiums goes to the lenders who provide the capital for the travel insurance. This adds huge diversification to the type of lending opportunities that are offered today. »
The diversification of DeFi is a direction to follow. Not least because the total value locked (TVL) decreases depending on the price of the tokens. The traditional lending world uses data, such as a company’s balance sheet and income statements. To assess the likelihood that a company will be able to repay a loan. On the other hand, cryptocurrency loans tend to be over-collateralized. For example, it will take $150 of Ethereum (ETH) to get $100 in cash.
At launch, loans will be extended for up to 90 days. Interest rates offered to lenders should be between 8% and 15%, according to Berkun. Koala, which is not backed by a major insurance broker or carrier, has so far raised a capital pool of around $450,000 for its Koala Flex product. This allows travelers to cancel their trip with one click and get their money back. This requires the ability to provide numerous reimbursements if needed, explained Koala Insurance CEO Ugo Weyl.
Koala aims to provide assurance to travelers by allowing them to cancel their trip, for any reason, and retain full ticket value for delayed or missed flights.
Ugo Weyl, CEO and co-founder of Koala, started the company with the goal of shifting the travel insurance landscape towards a digital approach. This would both save users money and restore their confidence to travel. The introduction of the first travel insurance option in DeFi, using the Teller protocol, represents a huge step forward in the company’s digital services strategy.
CreditFi is powered by teller and Polygon (MATIC) and uses Ensuro smart contracts. As lenders, users can contribute their capital to a USDC pool. Once staking, users can benefit from an annual percentage rate of at least 15%.
Because CreditFi is on the Polygon blockchain, users can avoid high gas fees and wait times, while maintaining network security and decentralization. With the pooling of cash, Ensuro aims to become the first decentralized and fully licensed insurer.
Ensuro CEO Marco Mirabella says the product launched with Koala and CreditFi is a clear example of how DeFi is infiltrating our daily lives. He added that smart contracts automate and bring transparency to processes. As a result, they produce more attractive and convenient results for end users.
So while there may be uncertainty in the travel landscape, it’s reassuring to know that organizations like Koala remain user-minded. It is quite inspiring to see the development of blockchain-based solutions, solving new and current challenges.
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Interested in investment and financial markets after a business school in Chambéry, the passion for cryptocurrencies was obvious. The blockchain is surely the universal tool of tomorrow.