The Polygon Layer 2 aggregator network is expanding in terms of partners as Paxo Finance joins the list.
Paxo Finance unveiled a strategic and financial partnership with the Polygon Network in a December 15 announcement. Furthermore, the aim of the collaboration is to maximize investment opportunities by transforming under-collateralized DeFi loans.
Paxo is a DeFi protocol that provides under-collateralized borrowing and lending options. It is not to be confused with stablecoin issuer Paxos.
— Paxo Finance (@paxofinance) December 14, 2021
Polygon Scaling DeFi Loans
Paxo stated that borrowing options are usually highly over-collateralized and capital inefficient. Therefore, it aims to solve this with a protocol that facilitates under-collateralized borrowing providing predictable loans.
Additionally, the Polygon tie-up will allow Paxo users to access more Ethereum-based networks and protocols. This expands the options for under-collateralized borrowing for DeFi users, it added. Paxo Finance’s Ankur Jain commented:
“We are thrilled to work with the best of the best in the Ethereum scaling movement-Polygon and utilize their expertise and the Polygon architecture to enhance our platform for the benefit of the users.”
The Polygon ecosystem has undergone rapid expansion this year as Ethereum fees continue to climb. Consequently, the total value locked across the ecosystem has surged more than 1,400% this year. As a result, it is currently $4.87 billion, according to DefiLlama.
Polygon uses rollups to scale Ethereum, providing much faster and cheaper transactions. Additionally, it recently launched a native token swap function. This enables users to access a range of decentralized exchanges to source the best rates for swaps all within the Polygon wallet.
In a related development, Polygon revealed that it is about to launch the “Nightfall” testnet. This is a privacy-focused scaling solution that merges Optimistic Rollups with Zero-Knowledge (ZK) cryptography.
Polygon Nightfall is all set to move to Ropsten testnet on the #Ethereum network to provide low-cost, private Ethereum transactions.
— Polygon | $MATIC – We're hiring! (@0xPolygon) December 16, 2021
MATIC Price Outlook
Polygon’s native MATIC token has not seen much immediate price action from all of the recent developments and partnerships. MATIC was trading flat on the day at $2.11, according to CoinGecko at the time of writing.
Surprisingly, it has not taken a massive hit along with the rest of the crypto market. Hence, the token has actually gained 34% over the past month. MATIC is currently trading 20% down from its May 18 all-time high of $2.62.
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