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One of the big advantages of decentralized finance (DeFi) is that it provides more options for users. People who cannot get traditional loans because a typical bank deems them "high-risk" can turn to the DeFi sector to borrow crypto assets. The Nolus Protocol is a new DeFi lender that offers users all sorts of exciting opportunities. To see how this intriguing project works, explore this guide to learn all about Nolus.
Key Takeaways:
Nolus is a decentralized finance lending protocol with cross-chain capabilities. It allows people to choose the most favorable rates possible and avoid the need to save up funds for liquidity.
The Nolus Protocol aims to tackle three common problems in crypto lending markets: overcollateralization, asset ownership options and risk of liquidation.
Nolus is a DeFi lending protocol. It has cross-chain capabilities that let people choose the most favorable rates possible and avoid the need to save up funds for liquidity.
Nolus was founded by Ivan Kostov and Kamen Trendafilov. Kostov worked in traditional finance, while Trendafilov has a background in marketing and business. During their time in these sectors, Nolus's founders realized that blockchain networks had the potential to revolutionize banking. They decided to join together and create a new leasing system that makes the most of DeFi products instead of just trying to mimic past banking methods.
Nolus started work on its plans in 2022 and officially launched its mainnet in 2023, having successfully completed several investing rounds and receiving funding from Token Metrics, Autonomy Capital, Everstake and more.
Nolus aims to tackle three problems common in crypto lending markets:
Overcollateralization: Most lenders in the DeFi sector demand excessive amounts of collateral, but locking up borrowers' assets makes it harder for them to manage risk. Nolus hopes for a more equitable approach to collateral.
Asset ownership: Leveraged lending in the financial sector requires users to give up ownership of the underlying assets. Nolus stands for enhanced user rights, and they work to provide more ownership options for each user's initial investment.
Risk of liquidation: Borrowers risk losing all their equity if a sudden change to money markets causes liquidization of their collateral. Nolus aims for a more stable system with fewer risks for borrowers.
Nolus functions as a custom Layer 1 blockchain built with the Cosmos software developer kit (SDK). Its code is entirely open sourced, and is updated and changed only when all stakeholders in the Nolus community vote to do so. According to the Nolus white paper, its ecosystem’s goal is “to build a novel user experience–driven automated money market” that facilitates direct interactions between lenders and borrowers without involving any other users.
The Nolus lending method starts with lenders choosing to supply stablecoins to the system. Any borrower who submits a down payment can get a loan from this supply of stablecoins. Both the coins and the down payment are temporarily locked in a smart contract, and interest is determined based on the value of the items. There’s no fixed repayment schedule, but the smart contracts ensure that interest is automatically removed from the collateral, and then paid to the lender at regular intervals. Once the user decides to repay the lease, the original assets are released from the smart contract.
Nolus's lending protocol includes many ways for customers to profit and enjoy convenient services. Here are the main DeFi products you can access through Nolus.
DeFi leasing on Nolus is designed to be as convenient as possible. Customers don’t have to go through a lengthy application or pay a lot of fees to other users. You just enter your collateral and get a loan of up to three times the value of the initial investment. Interest rates vary between 11% and 18%, based on the market value of the digital assets. The smart contracts allow the loan to be repaid on your own schedule. However, keep in mind that you pay more interest if you wait a longer amount of time to repay the loan.
If you want to earn money based on your existing crypto, you can join one of the many liquidity provider pools on Nolus by submitting stablecoins in exchange for interest-bearing Nolus crypto. When you're ready to withdraw your funds and stop participating in DeFi leasing, you can cash out your Nolus tokens to receive your initial asset, plus any additional interest or network fees you’ve earned.
Nolus's system of money markets isn't the only thing they provide. Users who decide to stake a crypto asset on Nolus can earn more money. The Nolus ecosystem offers the option of staking NLS tokens in exchange for various incentives. Lenders receive higher amounts of rewards for lending stablecoins, and borrowers get a lower interest rate.
Nolus has had some impressive growth since its launch in 2023. In just six months, the lending protocol has assisted with thousands of loans, collectively worth $8.6 million in total. Its team calculates that they've managed to achieve an average 81% ROI per loan.
Nolus hopes to expand on this momentum in 2024. Its main plan is to continue marketing the lending protocol heavily, attracting more users who want to do their own research and find the best possible loans. To further attract users from the DeFi sector, Nolus aims to add more support for other crypto tokens and increase network liquidity. Nolus stands for community-led governance, so they don't have a long-term road map in place. Instead, they plan to evolve and adjust to suit whatever community needs arise in the future.
NLS is the native token for Nolus. It allows users to adjust their interest rates, and it's also a governance token. People with NLS tokens can vote on how the platform is run and help implement new changes for the platform. The NLS token has a total supply of 1 billion. Nolus’s plan is to gradually mint tokens over a ten-year period, and implement a token buyback program to help maintain value. NLS token distribution will be as follows:
Community DAO treasury: 24%
Investor token sales: 20%
Nolus team and contributors: 19%
Staking rewards: 15%
Incentives for lenders: 12%
Nolus strategic partners: 5%
Liquidity reserves: 4%
Nolus bug bounty program: 1%
When the NLS token was released in the summer of 2023, Nolus prices were fairly stable. However, now that investors can sell their NLS tokens, prices have become more volatile. Starting in December 2023, NLS prices increased by around 300%, and although the token currently seems to be dropping from its all-time high of $0.10, more price increases seem likely in the future.
Not only is the market for the NLS token quite bullish right now, but the Nolus lending protocol is also attracting a lot of positive attention in the crypto space. If the network can maintain its positive attention and attract more users, prices seem likely to rise even further. CoinCodex predicts Nolus prices will stay in the $0.04 to $0.19 range for 2025, and hit $0.26 by 2029. This attitude is backed up by crypto influencers such as Crypto Revolution, who view NLS as an underrated crypto with a lot of potential for growth.
The Nolus project is a well-thought-out crypto protocol that offers users significant advantages. Its innovative approach to lending could potentially attract a lot of users from the DeFi space. In addition to having a reliable system backed with effective technology and a detailed white paper, NLS digital assets have also experienced some promising growth patterns. The crypto asset has had a slow yet steady climb in price, and now that it's trending in crypto news, it seems poised to take off.
However, keep in mind that it's still important to do your own research on digital assets. Some crypto investors might find it concerning that the Nolus project is mostly backed by marketers, instead of blockchain enthusiasts. There have also been some tech issues, such as the Nolus price feed bug that led to some unnecessary margin calls. Subsequent issues could limit price appreciation of its crypto assets. Therefore, it's necessary to approach Nolus with caution and not overextend your finances.
Nolus's DeFi lease system allows people to obtain easy access to crypto. Its innovative approach provides investors with significant advantages. Unlike traditional finance, there's no lengthy application process, and in contrast to many other blockchain networks Nolus doesn't have frequent margin calls or high network fees. As long as Nolus doesn't run into any technological issues or financial problems, its network is likely to have a lot of success in the DeFi space.
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