New DeFi Projects — Pendulum

Overview

FX (Foreign Exchange) market is the largest financial market with an average daily volume of around $6.6 trillion. If we could move the FX market on-chain, it would benefit from faster transaction speeds, lower transaction fees, better security and full transparency.

And that’s exactly what today’s featured project Pendulum is doing, bringing the FX markets to the blockchain.

Pendulum

Pendulum is bringing the FX market on-chain by creating the fiat-optimized smart contract blockchain based on Polkadot’s Substrate. An entire fiat DeFi ecosystem can be developed on the Pendulum parachain, including AMMs, lending protocols, forex-optimized money markets, and more. Traditional finance services can seamlessly integrate with DeFi applications on Pendulum.

One of the first dApps built on Pendulum, Amber, is an AMM enabling low-risk single-sided liquidity provision. It’s designed to give forex liquidity on DeFi the green light.

Pendulum recently completed its parachain crowdloan with the 300,000 DOT (approximately $1.4M) hardcap being reached in 3 minutes. Pendulum are also partners with Acala, Stellar and Equilibrium. For example, their partnership with Equilibrium will allow user to stake $PEN tokens for rewards (farming) or use as collateral to borrow crypto assets.

Utility of $PEN

Pendulum is launching their mainnet as well as their token $PEN in a few weeks. $PEN has three main purposes.

1.Gas Token

The PEN token will be used to power transactions on the network similar to how ETH powers Ethereum. Transaction fees will be applied when making transactions on the protocol and will be paid using $PEN.

2.Staking

Staking to secure the network will help decentralize the infrastructure by incentivizing external collators to run high-performing nodes.

3.Governance

Holders can shape the evolution of the network by proposing and voting on governance referenda.

4.dApp specific utility

Use your $PEN in dApps to farm or act as collateral.

Tokenomics of $PEN

The distribution maintains an equal 50/50 split between Pendulum’s backers and the Pendulum community.

The majority of the tokens feature a vesting schedule that unlocks gradually over a 2- to 3-year period to guarantee all stakeholders are motivated to contribute towards Pendulum’s long-term progress.

To conclude, DeFi has the potential to solve many of the problems that plague traditional finance, and traditional finance has the resources and expertise to help DeFi reach its full potential. Pendulum will operate as a critical piece of Web3 infrastructure to finally unlock DeFi use cases for fiat currencies.