Introducing Decentralized Borrowing and Lending on Revuto

Revuto is much more than a crypto subscription payment platform. While freeing consumers from the strictures of fiat-based subscriptions is top of our list, that’s merely the first task we’ll be ticking off. What comes next will see Revuto transformed into an all-encompassing DeFi ecosystem. And at its core will be a powerful decentralized finance primitive that accounts for most of the growth in DeFi to date: lending.

In Revuto’s case, we’re not trying to become the next Aave or Maker; rather, we’re focused on a specific use case that we believe is currently underserved by the DeFi market: microlending.

Crypto Lending on a Small Scale

Microlending describes the provision of small loans to borrowers who traditionally lack the credit history to be eligible for this service. In developing countries, microloans are used to bootstrap startups and entrepreneurs who can demonstrate their integrity despite lacking the collateral (e.g. property) to place as security against the sum borrowed.

In a crypto context, microlending can be deployed on an even smaller scale in a permissionless manner, without the need for invasive credit checks or discriminatory policies that can marginalize and disenfranchise aspiring borrowers. In plain English, the blockchain doesn’t care whether you’re a millionaire or a minnow: if your transaction is valid, it’s accepted by the network.

This is one of the core value propositions of blockchain that’s transformed crypto into a $200 trillion industry, and it’s at the heart of Revuto’s microlending service.

Stablecoin Loans on Demand

The microlending service we’ve imagined for Revuto users attends to a very specific use case. When we began looking into the ways in which crypto could replace debit card payments, we got to thinking about one of the biggest problems in the subscription industry: failed payments.

All too often, a payment will bounce because a debit was attempted on a day when your bank account strayed into the red. It happens to everyone, and is infuriating, prompting cancelled subscriptions; bank charges; or requiring manual resolution to re-enable the subscription.

Blockchain doesn’t let you go into the red of course: you can’t spend more than you have in your wallet, but there are still ways to obtain credit over and above the value of assets at your disposal. Scores of DeFi projects are currently tackling this problem, seeking ways to unlock liquidity from staked and LP’d assets across multiple chains.

Since staking of the REVU token will be a core capability of the Revuto dApp, it dawned on us that we could do something similar to support users who lack the funds to cover subscription payments when the due date falls.

How Microlending Works on Revuto

We’re incorporating a decentralized microlending and borrowing platform into Revuto, giving REVU token holders easy access to working capital as and when required. Loans are denominated in EURR stablecoins and anyone who has REVU tokens staked will be eligible to obtain one.

That way, you can enjoy the best of both worlds: the rewards to be derived from staking the REVU token coupled with the reassurance that if your wallet balance falls below the level required to cover a due payment, you can always obtain a microloan on demand, using your staked tokens as collateral.

Initially, the loan-to-value (LTV) ratio will be set at 2:1, so for every $100 worth of REVU tokens staked, you will be able to borrow 50 EURR tokens ($50). Upon taking out the loan, you’ll be issued with Cardano-native EURR tokens, which are stable assets pegged to the Euro. The loan can be repaid at a later date with 20% interest, and REVU stakers are entitled to take out unlimited loans as and when required, provided the 2:1 LTV is maintained.

Thanks to Revuto’s microlending service, you can stop monitoring your wallet balance to ensure you have enough on hand to settle your bills and get on with living your life. Once our microlending service is live, we’ll be expanding its capabilities and adding integrations that will unlock new ways to make EURR tokens work for you, while still claiming yield for staking the REVU token.

Check out how with Revuto, you can borrow REVU from the community (liquidity pool) and pay for your subscription even when your REVU balance is zero:

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