What is Vigor Protocol? DeFi Lending and Borrowing on EOS

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Vigor Protocol is a decentralized lending and borrowing platform powered by the EOS blockchain. Users can deposit various crypto assets as collateral to earn interest, or borrow the stablecoin VIGOR.

What is Vigor Protocol?

Vigor Protocol is a DeFi platform deployed on EOS, as a result, users do not face the scaling issues found on Ethereum as the protocol is gasless and does not have transaction fees. The protocol uses a two-token system: a fee-utility token VIG and a low volatility VIGOR token.

Though VIGOR is not marketed as a stablecoin, it is designed to have very low volatility, as it is minted by a pool of overcollateralized cryptocurrencies.

  • VIG token is used for fees, users need to have VIG tokens to access the system. Additionally, a portion of VIG is locked up to be used as the ecosystem’s final reserve. VIG also acts as the platform’s reward token, distributed to lenders, savers, and insurers, as a way to incentivize deposits.
  • VIGOR intends to be a low volatility token minted by the protocol. VIGOR provides stability for traders to leverage their position or market hedge.

Multi Collateral

An exciting feature of Vigor Protocol enables users to provide a portfolio of collateral to back a single loan. Meaning you can deposit various supported assets to mint VIGOR for your crypto-loan. As a result, the protocol is more secure as a whole as borrowers do not have to expose themselves to just one asset.

Levels of Loan Protection

To avoid the ecosystem collapsing, Vigor Protocol has several layers of loan protection built into the platform.

  1. Much like other DeFi lending protocols, borrowers have to over collateralize their loans.
  2. Tokens are deposited by lenders as insurance assets to provide further protection from price jumps.
  3. If the insurance pool is depleted, then the Vigor Final Reserve will ensure the ecosystem remains safe.

No Liquidation Penalties

During any bailout process where a borrower would be liquidated, the protocol does not charge any additional penalty fees. Many other DeFi protocols will charge you with high liquidation penalties up to the range of 20%. Vigor does not have any administration or stability fees.

Reputation Score

Unlike other decentralized lending protocols such as Aave or MakerDAO, users can build a reputation score on Vigor Protocol. This enables users to receive discounted rates on loans, or a higher voting power for governance purposes.

Why use Vigor Protocol?

Given the high transaction fees and slowness currently found on Ethereum, users may very much enjoy a switch to EOS. The EOS network does not charge any transaction fees and features 0.5 second block times. As a result, users will always have quick access to their funds. These are some of the reasons users are moving to DeFi on EOS, Tron, or Binance Smart Chain.

Additionally, Vigor Protocol does not rely on any auction features that rely on secondary markets to buy the bad debt. You could argue that as VIGOR’s loan debt automatically regains solvency by going to the insurance pool, the design could be safer than say MakerDAO. It will be interesting to see how the platform grows, competing with new protocols such as Venus on BSC or Harvest on KavaChain.