NEM announced a new partnership that can result in a perfect opportunity for XEM holders. The new collaboration is issued with Bidao and helps NEM expand services for its users.
According to the NEM Group:
“To further strengthen the ecosystem, NEM has formed a strategic partnership with Bidao, the decentralised stablecoin, to allow XEM to become a collateral asset.”
New Collateral Options
Using cryptocurrencies as collaterals to receive loans is becoming a rising trend in the industry. Many users are looking for various financial services in the ecosystem. The move has forced many blockchains to work on more innovative solutions. Famous blockchains like NEM are now working with DeFi services to add their tokens to the new system.
The most important result of the strategic partnership between NEM and Bidao is the collateralization option for XEM holders. They can now lock their assets into CDPs (Collateralized Debt Position). Then they will have the opportunity to receive BAI stablecoin and benefit from its use-cases.
Locking and unlocking digital assets in DeFi services is very easy. Collaterizing XEM has an easy process, too. According to the group:
“Using NEM as collateral is straightforward. Firstly, the XEM is locked up in the CDP. In return, the appropriate amount of BAI is generated and can be used freely by the CDP creator. To regain access to the locked XEM, the BAI has to be repaid to the system. This is simply done by a function call and sending back the BAI to the CDP. After that, the XEM are unlocked and can be transferred freely again by the CDP creator.”
There are many DeFi projects in the blockchain industry that each one provides specific services. Most of them try to offer options that are not related to the blockchain of users. For example, they support multiple coins for collateralizing and provide loans in numerous coins. Bidao is one of the blockchain agnostic ecosystems that tries hard to support as many coins as possible.
Most of the DeFi projects have two tokens. One of them is used for governance processes, and the other is often a stablecoin used for transferring money and value. BID is the name of the governance token in the Bidao that is based on a decentralized proof-of-stake blockchain. Bidao’s stablecoin is called BAI, which is pegged 1:1 to USD.
The new partnership with Bidao is a significant milestone for the NEM ecosystem. It provides any opportunities for them to expand participation in the DeFi industry.
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