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Altitude - managing loans across DeFi

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Altitude - managing loans across DeFi

Loans in the Decentralized Finance (DeFi) space are usually collateralised and a common trend amongst crypto investors is to use their crypto holdings (i.e. bitcoin, ether, etc.) as collateral and borrow against them. This enables long-term believers in crypto to both keep their investment portfolio intact while unlocking liquidity.

The main challenge of using crypto assets as collateral is related to the notorious volatility of the crypto markets. It is considered normal for the price of bitcoin to fluctuate up and down by a large percentage in a single day. If the price decreases, the loan could become undercollateralized and ultimately liquidated. Given the constant volatility of the crypto markets, such liquidations are not uncommon and hence borrowers need to be very careful when choosing the amount of collateral for their loans.

The second challenge with borrowing in DeFi is that interest rates can fluctuate between lending platforms, meaning that a borrower can borrow from one lending platform only to realize that the following day their rate has become significantly higher than other available rates.

Altitude itself is not a lending platform, but a protocol that manages the loans and collateral across leading platforms in the DeFi space. When someone borrows via Altitude, the protocol actively manages, both the loan and collateral in real time, based on market conditions to optimize the loan. And once someone borrows via Altitude, the protocol continuously scans the leading lending platforms for a lower interest rate and as soon as it detects one, the loan is automatically refinanced, ensuring that the borrowers are always borrowing at the lowest available rate.

It is only possible to do this in a fully automated way because of the trustless, composable nature of Decentralized Finance, where Altitude is able to move funds across protocols to achieve high degrees of capital efficiency via automation.

Altitude has raised a total of $2.1M in funding.