The Cosmos ecosystem never really had a strong money market protocol – so it’s important to provide some context on why they are important, and what role they play.
Money markets are massive on Ethereum – Aave and Compound had billions in TVL at their peak in mid 2021.
They’re successful because the enable a variety of use cases, which we’ll outline here:
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Getting yield on assets
It’s easy to accrue real yield via these money markets. Simply deposit funds in and watch them accrue value. You can also fold the yield– recursively borrowing and depositing to boost the yield provided.
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Being able to short
Users can deposit stablecoins, and borrow a token like Juno to swap back to stables if they’d like to short. If Juno decreases in price, they can buy back Juno to repay their debt and unlock their collateral.
This is particularly important to being able to short bridge solvency, a use case that Hadron brings which is novel.
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Being able to get stables without selling
By borrowing against Evmos or other assets, users can borrow stablecoins against their holdings without needing to sell – great for reducing sell pressure on the underlying.
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Leveraged Exposure
If you ever feel like taking on leveraged exposure on a particular asset, you can deposit say Evmos, borrow stablecoins, swap these stablecoins into Evmos and then repeat if you’d like to increase the leverage. This can be highly dangerous if done poorly, so use caution in doing this.
We’ve linked some helpful resources below on how the existing lending markets work and how to use them:
About Hadron
Hadron is a lending protocol based on Compound that will be deployed on Evmos. It seeks to tap the vast assets within Cosmos by bringing borrowing and lending into the mix.