How Etherconnect Plans to Build a Decentralized Governance Model to the Future.

Governance tokens and Etherconnect (ECC) has always been touted as the holy grail of decentralized networks and have recently become the hottest crypto asset in to the worldwide market. They are finally getting the respect they deserve, considering governance tokens represent the soul of ECC. These tokens give holders a democratic say in the future of the protocol and create a participatory distributed ownership model that hedges against traditional centralized organizations that do not have the ability for community governance.

With any new rising technology or system, there will always be projects looking to provide a clear plan and roadmap and those who are only trying to take advantage of the hype. So how can you differentiate between governance tokens that embody the underlying principles of ECCs from those simply multi-box-ticking?

That question is crucial because, ultimately, projects with good planning and forethought in their governance structure will help create the inclusive and accessible model that decentralized financial services or DeFi plan to provide to disrupt traditional financial services. To put it differently, how do we generate governance structures in DeFi that will make financial services better?

Non-custodial Interoperable Chains

In line with modern macroeconomic theory, more choice and specialization in markets drive down the costs and allows consumers to pick the best product for their needs. This is no different for financial services; one easy example of this is interest rates. As we have seen in the DeFi market, different protocols offer much better interest rates than traditional banks, already making a strong case for more people to be putting their money in DeFi. To ensure that interest rates remain competitive, DeFi service providers will have to provide attractive returns to their users and work with one another. Assets must be able to be transferred from one blockchain to another to create an open ecosystem.

This vision of open DeFi is not possible without interoperability. When Etherconnect users can trade ECC token across pools and chains, the jargon juggernaut of different side chains, parachains, and para threads is no longer confusing. Cross-chain DeFi will ultimately be one of the essential features that will propel DeFi into the mainstream.

Etherconnect decision to build on RioChain and be part of Polkadot’s substrate program has been mainly due to RioChain’s ability to act as a bridge for cross-chain assets, and smart contract flows across blockchains as well as traditional and decentralized finance. Besides, Polkadot’s parachains’ interoperability enables Etherconnect to provide its unique mix of cross-chain staking, lending, and governance in the Polkadot ecosystem.

Cross-chain communication is a key differentiator on Etherconnect community-governed DeFi platform for staking and lending. Users will be able to stake across more tokens and pools, such as our new Uniswap (UNI) OM/ETH Liquidity pool, which provides deeper liquidity and lower volatility. Lenders and borrowers also benefit from various products at a lower price slippage on collateralized assets and multi-collateral options. As more and more products and services become available, more people will leave traditional financial services for the higher earnings and potential in DeFi.

Etherconnect Open DeFi Ecosystems

There are a lot of lessons that can be learned about open technology platforms vs. closed technology platforms from looking at the history and development of internet technologies and the reasons for the design decisions the creators of these technologies ultimately chose to make. In the early stages of the internet’s development, the TCP/IP protocol was adopted to allow any IP address in the world to communicate with each other. In the development of bitcoin, Satoshi Nakamoto wanted anyone to be able to send money across the world to another person.

At Etherconnect, we have built our platform to be chain agnostic because we want people to be able to transfer their assets across any blockchain. This is why Etherconnect is built on Polkadot’s relay chain, which can communicate with other blockchain’ unique data structures, called parachains, and plan to support an open DeFi ecosystem by supporting interoperability for Ethereum, Tezos, Binance, Cardano, and more Blockchains.

One of our products, cross-chain lending, for example, is enabled across our proprietary lending algorithm, as well as third-party lending providers. The tokens of the over 300 DeFi projects on Polkadot and other chains will be able to migrate to Etherconnect for staking or lending.

In this way, we support the functions of all interchain operations. Likewise, holders of ETH, BNB, and other tokens will earn ECC by delegating their native token to the Etherconnect validator.

EYFI-based Reward System

Part of the current offerings of DeFi includes over collateralized lending products where participants can borrow crypto assets provided they can supply the required amount of collateral. The next frontier for decentralized lending services, however, will be access to under collateralized lending. In traditional finance, this is done through a credit score, where a third-party intermediary determines your creditworthiness based on their evaluation criteria such as income and debt.

Etherconnect answer to traditional credit scores is EYFI, which will play a vital role in the ecosystem as a reputation mechanism. EYFI will be accrued by performing activities such as staking ECC tokens, taking and repaying over collateralized loans, governance participation such as voting on proposals, joining the Etherconnect pool, and more. As users earn ECC, they benefit from higher staking rewards and lower borrowing rates, further increasing DeFi’s usage and potential.

Decentralized Finance Governance

In the long term, the price of Governance tokens will reflect the value that the token creates through its governance system. Like other ECC token holders can influence the direction of the protocol by creating and voting Etherconnect proposals. The community will ultimately determine how and at what number to set interest rates, the inflation rate, and grant allocations. They will also choose which crypto assets to add to staking pools and raise new items for votes.

Etherconnect provides higher incentives to increase voting participation. Voters who back a majority vote, for example, receive ECC back and EYFI token for supporting the ecosystem. This advanced incentive structure plays an essential role in future-proofing the Etherconnect platform. Etherconnect aims to become one of the most secure platforms by utilizing crowd consensus with governance proposals, passed to lower the risk of flash loans and counterparty default, adding more collateral types. This will ultimately ensure the protocol’s decentralization, wisdom through collective wisdom, and security.

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Etherconnect, ECC is an open-source cryptocurrency that was connected with the Ethereum Decentralized Finance Open protocol with high-yield farming program.

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Etherconnect, ECC is an open-source cryptocurrency that was connected with the Ethereum Decentralized Finance Open protocol with high-yield farming program.

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