Why Better Bank

BetterBank's primary innovation: Merging Seigniorage with Lending & Borrowing

BetterBank introduces a novel financial model that fuses seigniorage mechanics with lending and borrowing. This combination redefines capital efficiency, providing sustainable liquidity and yield opportunities that TradFi and existing DeFi platforms cannot match.

Solving the Algorithmic Peg Problem

Historically, algorithmic stablecoins (i.e. pegged tokens) have suffered from unsustainable economic models. Many have faced runaway inflation, loss of peg, or outright collapse, leaving investors as exit liquidity. BetterBank solves this abandonment problem by integrating its seigniorage model with a robust lending and borrowing ecosystem, ensuring continuous economic activity, utility, and deep liquidity for its synthetic assets.

How BetterBank Enhances Capital Efficiency

1. Seigniorage-Backed Collateral – The protocol’s synthetic asset system (Favor Tokens) acts as on-chain credit, creating a self-sustaining loop where liquidity fuels borrowing, and borrowing sustains liquidity.

2. Dynamic Market Adjustments – Unlike traditional money markets, BetterBank’s system dynamically expands or contracts supply growth based on real demand, avoiding artificially controlled inflation.

3. Yield Optimization Beyond TradFi's Capabilities– TradFi lending platforms offer low returns due to high operational costs and inefficiencies. BetterBank's Stronghold, by contrast, leverages high yield opportunities, providing impressive APY's that remain sustainable over time.

Preventing Pitfalls of Both TradFi and of Earlier DeFi Models

• No Zero-Sum Liquidity Traps – Unlike previous DeFi projects where early adopters drain liquidity, BetterBank ensures that contributing to long-term growth is the more profitable option for any participant, be they early or late.

• Resilient Against Bank Runs – Liquidity crises often lead to Bankruptcy in TradFi and to death spirals in DeFi. BetterBank integrates automated credit adjustment and liquidity recovery that prevents liquidation cascades and ensures long-term capital stability. (See Protocol Mechanics)

• Sustainable High Yield Generation – Many DeFi projects produce tokens that have their sell value as their primary, and often only, value. BetterBank instead produces tokens that keep their value upon use, and this value generation results in sustainable high yields.

BetterBank is not just another lending protocol—it is a fundamentally new financial paradigm that eliminates the inefficiencies of both TradFi and previous DeFi models. By merging seigniorage-based synthetic assets with highly efficient lending, BetterBank creates a future-proof, yield-generating ecosystem with unmatched capital efficiency and risk mitigation.