Five Cardano-powered lending and borrowing protocols ($ ADA)


This article takes a brief look at five lending and borrowing protocols built on top of Cardano smart contracts: Aada; ADALend; Liqwid; TO MIX TOGETHER; and Paribus.

Aada ($ AADA)

here is a Overview of this project:

Aada is a crypto asset lending platform. The smart contract makes it possible to deposit assets and collect interest or to borrow assets and perform financial actions.

Aada is a decentralized money market protocol that allows users to lend and borrow cryptocurrency with confidence. There is a wide variety of cryptocurrencies to choose from. With the addition of the Cardano ERC20 converter, Aada will bring much needed features to the DeFi ecosystem.

The Cardano ERC20 converter will bring huge amounts of assets into the Cardano blockchain that is cheaper to process. The converter will allow issuing organizations and their users to manage the migration of ERC20 tokens to Cardano.
Users can convert their Ethereum tokens with just a few clicks, and when moved, those tokens will be “translated” into a special native token on Cardano which has the same value and functions as an ERC20.

The Aada team said that since “building a lending platform” takes “a lot of resources and time”, they “decided to issue AADA tokens which will be used in Aada utilities “.

The Aada platform will generate various fees which will be distributed to holders of $ AADA. Additionally, once the team has finished building a Decentralized Autonomous Organization (DAO), $ AADA will serve as a governance token.

ADALend

The team says the ADA Lend protocol “will fuel the new wave of flexible financial markets by serving as a fundamental layer for instant loan approval, automated guarantees, trustless custody and liquidity.”

Here are its main characteristics:

  • Without permission: “Lend on any pairing.” Our governance will ensure that the best deals are available and that only the most secure oracles are used. “
  • Incentive liquidity: “Liquidity relies on having enough assets in each pool to facilitate lending. ADALend meets this requirement by incentivizing users to deposit assets and provide liquidity.
  • Community governance: “Token holders can build consensus by voting on governance proposals or by introducing new proposals for a vote. “
  • Foundation layer of the ecosystem: “Attract assets and create incentives that can strengthen an ecosystem of financial products. “

And here is the project roadmap:

Liqwid

The Liqwid team describes this project as “an open source, algorithmic, non-depository interest rate protocol designed for lenders, borrowers and developers” and they say that users can “safely earn interest on deposits and borrow assets with ease while earning a yield on ADA from four yield streams.

Here is the project roadmap:

Here are the main features of Liqwid:

  • “Assets held under Liqwid Market Contracts earn APYs based on market demand for that asset; put your crypto to work and earn per block.
  • Instantly borrow any protocol supported asset against your qToken balance with no trading fees and no slippage at a competitive APR directly on the Cardano blockchain. “
  • “Unlock cash and stay for a long time by mining the value of your crypto holdings to borrow stablecoins or crypto assets against it. This is the HODL method!
  • “The Liqwid protocol is powered by Cardano, a programmable UTXO blockchain designed for deterministic, secure, and low-cost transactions for the next evolution of DeFi innovation.”
  • “Anyone can access immutable smart money market contracts right on the chain; participate in non-depository markets and keep your keys.
  • “Using the Liqwid protocol opens up access to a global liquidity pool for each asset. A decentralized borderless marketplace for lenders and borrowers, built on Plutus smart contracts. “
  • “No ISO, no presales, no venture capital funding. The only way to earn LQ Tokens is to use Protocol or receive grant funds from the DAO Treasury. The LQ token generation event occurred in the 1st multi-asset support block on Cardano using a timelock keystroke policy.
  • “Liqwid DAO token holders use the governance smart contract to submit proposals and exercise their voting power in a democratic manner. LQ is the foundation of Liqwid DAO governance and is staked as a reserve asset in the security pool, generating additional return for LQ holders.

QTokens, which are Liqwid’s interest-bearing tokens, are “struck at the current exchange rate when you provide assets to a market contract and burnt when you redeem assets.” Holders “earn interest through the qToken at the exchange rate of the underlying asset, which increases in value as borrowers repay loans plus accrued interest.”

Holding crypto-assets in the form of tokenized qToken balances offers several advantages:

  • “Earn interest on the underlying assets”
  • “Keep your keys”
  • “Stay for a long time”
  • “Borrow against a qToken guarantee”

TO MIX TOGETHER




The MELD team says this is a “non-custodial banking protocol”. You can “securely lend and borrow crypto and fiat currencies with ease and stake your MELD tokens for APY”.

The following overview of MELD is taken from his white paper:

MELD is an open source, non-custodial liquidity protocol for borrowing fiat (USD and EUR) against crypto collateral and generating a return on deposits. The MELD token is used for the governance of the protocol and you can wager it to earn a return.

MELD is the first decentralized protocol that integrates fiat lending capabilities into the crypto ecosystem. This enables low friction transactions between crypto and fiat positions while maintaining control of digital assets.

Users interact with the MELD app on iOS, Android and in the browser to easily access their digital assets to lend, borrow and manage the services offered by MELD. Users have peace of mind because they keep the keys to their assets at all times.

MELD offers significant capital efficiencies in lending and borrowing over centralized blockchain solutions and traditional fintechs. Running on a third generation blockchain, MELD inherits Cardano features including low transaction costs, high throughput, and Cardano 10 has over $ 50 billion in security stacked within the blockchain.

Built on the Cardano blockchain, MELD capitalizes on transaction efficiency, which dramatically reduces fees by over 99% compared to ETH-based solutions.

This is how MELD works:

  • “Using the MELDapp app, choose the amount of money you want to borrow. Add your crypto as collateral (twice the amount you want to borrow) and lock it in a MELD smart contract.
  • “Your crypto collateral is added to MELD’s cash pools to generate a return and work for you for the life of the loan.”
  • “It doesn’t matter if you borrow, lend, stake or hodling, you always get a return from the crypto in your MELDapp.”
  • “Once the smart contract is in place, your loan is electronically transferred to your bank account anywhere in the world. “
  • “Make monthly payments to pay off the interest and principal on your loan. Once the loan is repaid, your collateral is returned to you.

And here is MELD’s roadmap:

Paribus ($ PBX)

Paribus describes itself as “a cross-chain borrowing and lending protocol for NFTs, liquidity positions and synthetic assets, powered by the Cardano blockchain.”

Here are the things you can do with Paribus:

  • “Lend, borrow or invest synthetic assets”, “thus increasing the efficiency of capital or the flexibility of investments, through any chain”
  • Get “NFT Collateral-Based Loans”; this allows you to “borrow against your investment, freeing up your capital while the underlying NFT appreciates”
  • Get “LP Collateral-Based Loans”; this allows you “to borrow on your AMM liquidity positions, allowing you to take advantage while staking or earning thanks to LP’ing”
  • Participate in “Sharing the benefits of PBX tokens”; this means that you can “earn a percentage of the charges collected by the network, based on a tiered staking model”
  • Participate in “NFT Staking”, which means you “bundle with other similar NFTs, generating a return on your NFT assets”
  • Participate in “LP staking” (this means “market specific staking pools for LP tokens from multiple blockchain-based liquidity pools”)

$ PBX is the “native Paribus governance token, allowing holders to create and vote on proposals for protocol directives”. Its objective is “to align the incentives through the Paribus return protocol, by creating a codified harmony between the stakeholders, the protocol itself and the security of the assets it contains”. Holders of $ PBX are “also entitled to a percentage of the fees earned by the protocol, relative to their stake. The larger the stake, the higher the level and the higher the percentage.

Token holders are also entitled to a percentage of the fees earned by the protocol, compared to their stake. The higher the bet, the higher the level and the higher the percentage won. “

DISCLAIMER

The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptoassets carries a risk of financial loss.

IMAGE CREDIT

Photo through “niekverlaan” Going through Pixabay

About Edward Fries

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