Ever since the DeFi sector went big, people have been comparing it to CeFi and trying to decide which one is a better fit. Of course, neither one is perfect, and CeFi has a number of issues, the biggest of which are slow transactions, high fees, and of course, centralization itself. However, DeFi has its own flaws, despite high levels of innovation, it suffers from liquidity issues, high volatility, and imperfect code that still allows for exploits, as we have seen in a number of examples over the last few years.
This is why Mango (MNGO) emerged, aiming to combine the best of the two worlds and try to find some sort of a middle solution that would resolve the problem of all sectors while also offering the benefits that both have. With that said, let’s take a look at what Mango (MNGO) has to offer, and what problems it aims to solve.
How Does Mango (MNGO) Work?
Mango is a Solana-based project that intends to merge the best features of DeFi and CeFi together and create a hybrid service that offers the best of both worlds. It offers a variety of very popular services, such as lending and borrowing, perpetual futures, decentralized governance, margin trading, and alike. At the same time, the project is also capable of offering lightning-fast transaction executions, all at near-zero fees.
Its long-term goal is to use its permissionless ecosystem to encourage “spectacular, outlandish, and unpredictable innovations.” In fact, it hopes that these innovations might be popular and powerful enough to someday even overtake CeFi. The key ingredients for this, as the project sees it, include low latency, low transaction cost, and full decentralization. The project claims that all three are necessary for it to be viable, and all three are finally available on Solana, which is what allows Mango to thrive within Solana’s ecosystem right now.
What Problems Does Mango (MNGO) Solve?
Let’s start with the problems that Mango can solve, as there are a few things that the project has to offer.
Combining the best of CeFi and DeFi
The first thing to note about Mango is that it intends to take the liquidity and usability of CeFi, and merge them with the permissionless innovation of DeFi. Not only that, but it aims to do it in a way that will significantly reduce the cost for the end-user, eventually offering a better deal than what any of the two sectors could offer on their own. To achieve this, Mango is also offering a number of services that are rather popular in trading, such as margin trading, lending, and perpetual futures, in addition to decentralized governance.
Increased trade execution at near-zero fees
Thanks to the fact that Mango is based on Solana, the project can harness the power of one of the most scalable blockchains that were ever created. As a result, it can offer lightning-speed trade execution and near-zero fees. This is a significant achievement even in the crypto space, especially since major blockchains like Ethereum still see major scalability issues.
Benefits of Mango (MNGO)
Next, let’s talk about a few things that Mango does that benefits the users directly. There are quite a few of such benefits and perks that you should be aware of if you are considering whether or not to start using it.
Low cost
We already mentioned low cost briefly, but we should point out that Mango’s offer is capable of outperforming centralized finance and decentralized finance alike. Take Ethereum’s network — the largest DeFi center in the crypto industry — as an example. Due to its inability to scale and its low TPS count, Ethereum’s gas fees have skyrocketed to record height.
Meanwhile, centralized finance is full of intermediary services, each of which intends to get a cut for providing its services in the first place, which results in just as high, or even higher transaction fees. Mango has a better offer than either of them, which is what makes users turn to it upon learning that there is a cheaper and faster solution.
Margin trading
Margin trading has been an instant hit as soon as it appeared in the crypto world, and even more so when it became a feature that DeFi projects could offer too. It is risky, but it is also rewarding if you know what you are doing, and many in the crypto industry have grown accustomed to the regular risks of trading crypto, and they no longer find it thrilling. Margin trading allows users to borrow money and boost their trades multiple times, which then results is extremely high earnings — or complete losses, depending on what happens in the market.
Lending
Lending has been one of the most popular activities in crypto ever since DeFi went big. Taking a loan in centralized finance is a long, difficult process that is not even available to everyone, and even those that can gain access to it often get denied or offered a poor deal due to a bad credit score or some similar issue. In crypto, Lenders can lock up their funds in a lending pool and be rewarded for providing money that borrowers can borrow. Meanwhile, borrowers themselves can get the loan quickly, provided that they can offer collateral. It is all quick, simple, transparent, and immutable, thanks to smart contracts and blockchain technology.
Governance
Finally, let’s talk about governance. Like many other projects in the DeFi sector, Mango allows users who hold some of its native cryptocurrency MNGO, to participate in decision-making regarding the project and its future. Essentially, users are allowed to vote on proposals or even make their own proposals regarding what direction the project evolution should proceed in. The more tokens a person has, the greater is their vote, but in the end, it is all fully decentralized, and the majority needs to agree on the next course of action in order for it to be taken.
Conclusion
Financial technologies are evolving at a rapid pace, moving so quickly that it is getting very difficult to follow it all through. Only two years ago, DeFi was still a small sector of the crypto industry that very few people were paying attention to. These days, it is massive, and it is constantly growing. Now, there are even projects like Mango, that aim to combine it with centralized finance and create hybrid services that could offer the best sides of DeFi and CeFi, while eliminating the flaws of either of these two sectors.
