While Ethereum (ETH) is constantly in the news about the upcoming 2.0 update, similar smart contract platforms are gradually building up their reputation. One such network is Cardano (ADA), a peer-reviewed Proof of Stake (PoS) blockchain network for DApp development and decentralized finance (DeFi).
As developers begin deploying DeFi decentralized applications (DApps) on the Cardano platform, they need to support layer 2 solutions to scale, secure, manage and stimulate their communities. ADALend takes the lead in this regard, and introduces features that gradually lure users away from Ethereum towards Cardano.
ADALend is a Cardano-based lending protocol that aims to provide decentralized financial DApps with a flexible layer 2 solution similar to that offered by Ethereum-based layer 2 protocols.
The ADALend solution will provide different loan groups, each with its own cryptocurrency. From there, users can contribute assets to the pool in exchange for interest, which reduces the amount of available assets in the Cardano ecosystem.
The platform then supports borrowers – users who borrow amounts in cryptocurrencies by depositing another asset as collateral. The total amount of borrowed assets depends on what you provide as collateral, together with the assets you have already borrowed.
More information from ADALEND here
Users can borrow money over a longer period of time, with partial or full payment accepted at any time. However, the borrowed position can be wound up in the event of a significant price change. Liquidation takes place when the value of the collateral falls below a predetermined limit.
All price information is obtained from oracles that are linked to different price providers to ensure that the values are as accurate as possible.
Believe in Cardano
At the moment, ADALend is more than just a vision. Major venture capital firms Moonwhale Ventures, JP Maxx and even the IOHK Foundation have supported the project, believing in the goal of supporting a new wave of sustainable financial markets in Cardano. In fact, ADALend’s seed tour was sold out within the first hour after aeration.
Part of this popularity is due to the fact that ADALend is a user-supported protocol. The management of the platform depends on a user-driven decentralized autonomous organization (DAO) where new additions and updates are introduced through proposals. The users then discuss and vote on these proposals, which after a majority vote are included in the network.
The team hopes that their support for user control, combined with fair interest rates, will help bring Cardano fans to the ADALend protocol. Following the funding round of the project, ADALend expanded its team to develop more features. The next twelve months will be dedicated to building existing features as well as laying the foundation for new DeFi options. The team will continue to look for new partnerships to provide the user base with an ever-growing set of features.