Flex ecosystem, its characteristics. Discover the vision and objectives of this ecosystem, as well as its official website.
Flex is a decentralized lending platform enabling interest-free loans backed by $HEX as collateral. Borrowers receive loans in $HEXDC (a USD-pegged stablecoin) and must maintain a minimum collateral ratio of 110%.
Alongside collateral, loans are backed by a Stability Pool consisting of $HEXDC and by fellow borrowers who collectively serve as ultimate guarantors. For further details on these features, refer to our documentation.
Flex operates as a non-custodial, immutable, and governance-free protocol. The protocol is now active on PulseChain.
This ecosystem operates as a non-custodial, immutable, and governance-free protocol.
Flex – borrowing:
Flex Protocol offers interest-free loans and is more capital efficient than other borrowing systems (i.e. less collateral is needed for the same loan). Instead of selling HEX to have liquid funds, you can use the protocol to lock up your HEX, borrow against the collateral to withdraw HEXDC, and then repay your loan at a future date.
What do you mean by collateral?
Collateral is any asset which a borrower must provide to take out a loan, acting as a security for the debt. Currently, Flex only supports HEX as collateral.
Is HEX the only collateral accepted by Flex?
Yes, HEX is currently the only collateral type accepted by Flex.
How can the protocol offer interest-free borrowing?
The protocol charges one-time borrowing and redemption fees that algorithmically adjust based on the last redemption time. For example: If more redemptions are happening (which means HEXDC is likely trading at less than 1 USD), the borrowing fee would continue to increase, discouraging borrowing.
Other systems (e.g. MakerDAO) require variable interest rates to make borrowing more or less favorable, but do so implicitly since borrowers would not feel the impact upfront. Given that this also needs to be managed via governance, Flex instead opts for a fully decentralized and direct feedback mechanism via one-off fees.
What is the collateral ratio?
This is the ratio between the Dollar value of the collateral in your Vault and its debt in HEXDC. The collateral ratio of your Vault will fluctuate over time as the price of HEX changes. You can influence the ratio by adjusting your Vault’s collateral and/or debt — i.e. adding more HEX collateral or paying off some of your debt.
Flex staking:
FLEX Staking in the Flex Protocol allows users to earn a portion of borrowing and redemption fees in $HEXDC and $HEX by depositing FLEX tokens into the staking contract. Here’s how it works:
Staking Process: Deposit your FLEX tokens into the Flex Protocol staking contract to begin earning rewards.
Earnings Calculation: Your earnings are proportional to your share of the total staked FLEX tokens at the time a fee is generated.
Lock-up Period: There is no lock-up period for staked funds. You can withdraw your staked FLEX tokens at any time.
Staking Limitations: Only FLEX tokens can be staked; HEXDC cannot be staked but can be deposited into the Stability Pool.
System Backstop and Governance: Staked FLEX tokens are not used as a backstop for the Flex Protocol system, nor are they utilized for governance purposes, as there is no governance mechanism in place within Flex.
Direct access to the official website
