Anvil Introduces DeFi Protocol to Manage Letters of Credit
Payments on the internet face significant challenges, primarily due to reliance on traditional methods such as credit cards, which involve third-party verification and added costs. The economic burden of retail payments in the U.S. is estimated at 2% of GDP, comparable to the defense budget.
Bitcoin was initially intended as a peer-to-peer electronic cash system, yet current crypto developments have shifted focus away from this use case. Tyler Spalding, founder of Anvil, aims to address this issue with a new decentralized finance (DeFi) protocol that redefines credit.
Anvil Overview
- Anvil uses Ethereum smart contracts to manage collateral and secure credit.
- Users lock ether or USDC in an Anvil vault to receive letters of credit (LOCs), similar to a bank check without delays.
- The system offers sustainable liquidity and transparency, transforming collateral management.
- No transaction fees exist at the protocol level, and it operates as an open-source community project.
- 60% of governance tokens are distributed to partners and users for operational voting.
- Potential applications include traditional loans, DeFi counterparty credit, asset bridging, and payments.
- Partners interested in using Anvil include Amdax, Empowermint, and Flexa.
- Anvil has been developed over two years without external investors, undergoing audits for security.
Spalding emphasizes the goal of integrating native payments into the internet ecosystem, addressing the historical shortcomings in online payment systems.