With the tokens of major lending protocols on a decline, Jihan Wu’s digital assets financial services platform, Matrixport, says it has launched a product for investors to borrow against their altcoins as collateral to obtain short-term liquidity.

Following the collapse of Terra’s LUNA and UST tokens and data suggesting that more people are looking for an exit from crypto lending which stands as a backbone of decentralized finance (DeFi), Matrixport’s ‘Non-Liquidation Loan’ product seeks to enable individual and institutional investors to seize every investment opportunity including in a fear of missing out (FOMO) situation.

Glassnode data shows that the total locked-in value for DeFi dropped to $150 billion as of mid-May shortly after the Terra debacle – down from $230 billion a month earlier and from about $240 billion at the start of 2022. However, with its new product, dubbed the world’s first, Matrixport says it will enable users to capture rare opportunities by maximizing the value of their held altcoins to get equivalent stablecoins.

The financing solution allows users to borrow stablecoins with fixed interest rates and without the risk of margin calls or liquidation. that is, it completely removes the risk of liquidation in a space where price volatility is very high.

“The ‘Non-Liquidation Loan’ product serves a real need for flexible solutions for those seeking to retain their digital asset holdings,” says Head of Business Development & Sales of Matrixport, Cynthia Wu.

It will initially support four altcoins – Avalanche (AVAX), Chainlink (LINK), Polygon (MATIC), and STEPN (GMT) – with a minimum loan amount of US$1,000 per transaction while more tokens are made eligible for the product later.

In the past, Matrixport’s Cactus Custody introduced the “DeFi Connector” feature which enables institutional clients to be able to have a seamless and secure connection with DeFi protocols through MetaMask Institutional (MMI) after it became one of ConsenSys’ MMI partners in October 2021 alongside BitGo and Qredo.

It also launched the Grid Trading Bot which allows users to pre-set a series of purchase and sell orders within a given price range – even when an asset fluctuates within the given range – to buy low and sell high while making no trades if the asset price moves outside of the price range.

The Asian digital assets financial services platform now offers altcoins holders a smarter way to save on taxes with its new product – especially those in countries or regions where capital gains tax are charged on their cryptocurrencies’ earnings – as pledged altcoins holdings are not taxable.

Matrixport will also enable users to increase their cash flow as they lend out their altcoins holdings through zero liquidation loans which could be used to acquire stablecoins and in turn converted into fiat currency to support real life business investments or large purchases.

Usually, crypto lending happens when a user provides some collateral on a DeFi lending decentralized application or a cryptocurrency exchange. The provided collateral has to be at a certain value to avoid liquidation while the capital gets unlocked once the user returns the loan plus a fee. With the new product, users do not need to increase the value of their collateral by depositing more assets or paying back part of their loan.