Axon offers a unique service allowing users to borrow fiat currency against their cryptocurrency holdings. This service combines the best aspects of decentralised finance (DeFi) and centralised finance (CeFi), providing a flexible and secure solution for individuals needing liquidity without selling their crypto assets. Axon's Liquid Fiat<>Crypto Protocol technology ensures transparency, trustless transactions, and low fees, making it an attractive option for many crypto users.
Borrowing against your crypto allows you to unlock liquidity without selling your assets. This is particularly beneficial for those who believe in the long-term potential of their crypto investments but need immediate access to fiat currency. Some common reasons for borrowing against crypto include:
- Avoiding Capital Gains Tax: Selling crypto can trigger taxable events. Borrowing against it avoids this issue.
- Maintaining Market Exposure: By not selling, you continue to benefit from potential appreciation.
- Immediate Liquidity: Access funds quickly for personal or business needs without waiting for a sale.
CeFi platforms are centralized services that act as intermediaries, connecting borrowers and lenders.
- User-Friendly: Intuitive interfaces and customer support.
- Security: Generally, these platforms have robust security measures.
- Regulation: Often regulated, providing a sense of security and trust.
- Custodial Risk: Users must trust the platform to manage their assets securely.
- KYC/AML Requirements: Extensive verification processes can be cumbersome.
- Centralized Control: Centralised entities can impose restrictions or freeze accounts.
DeFi platforms are decentralised and operate without intermediaries, using smart contracts to facilitate lending and borrowing. Examples include Aave, Compound, and MakerDAO.
- Non-Custodial: Users maintain control of their assets.
- Privacy: Generally fewer KYC/AML requirements.
- Transparency: All transactions are visible on the blockchain.
- Complexity: Requires a medium level of DeFi technical knowledge and understanding
- No direct-fiat access: Most DeFi lending platforms don’t provide fiat loans which makes it difficult to off-ramp
- Slow: Due to lack of direct fiat access the process requires multiple transfers across various platforms that could lead to a slow process involving CeFi platforms
Axon merges the benefits of CeFi and DeFi through its Liquid Fiat<>Crypto Protocol, providing a superior borrowing experience.
1. Non-Custodial Service: Axon's service is fully non-custodial, meaning users retain control over their crypto assets. This reduces the risk associated with trusting third-party custodians.
2. Patent-Pending Technology: Axon's technology offers unmatched transparency and trustless transactions. Users can verify every transaction on the blockchain, ensuring a high level of trust and security.
3. Competitive Fees: By leveraging the efficiencies of blockchain technology, Axon can offer borrowing at more competitive rates compared to traditional CeFi platforms.
4. Near-Instant Settlement: Transactions are settled almost instantly, providing quick access to liquidity.
5. Integration with Bank Accounts and Wallets: Axon seamlessly connects the user's bank account with their non-custodial wallet, offering a smooth and integrated borrowing experience.
Axon's "Borrow Fiat Against Crypto" service offers a compelling solution for those needing liquidity without sacrificing their long-term crypto investments. By combining the strengths of both CeFi and DeFi, Axon provides a service that is secure, transparent, and efficient. Its non-custodial nature, coupled with patent-pending technology, ensures that users can borrow against their crypto assets with confidence and ease.
