DeFi Banking Protocol MELD recently made headlines for raising more than $1 billion in Cardano (ADA) in its protocol through a new funding mechanism called Initial Share Pool Proposal, or ISPO, an important innovation in the way early adopters support blockchain startups. Cointelegraph had the opportunity to connect with Ken Oling, CEO of MELD to discuss the importance of ISPs, as well as Cardano’s role in facilitating widespread participation in equity pools.
ISPO: Overview
ISPO is a new way for investors and other early adopters to support the project by delegating cryptocurrency to public shares in exchange for project token. MELD is currently the only known project to use ISPO, although the concept has been previously proposed elsewhere.
The MELD ISPO, which launched on July 1, allows Cardano holders to post their ADA at any time and for any amount in exchange for MELD tokens. The first pot bet in 24 hours was filled with approximately $100 million at the ADA. Over the course of five days, four betting pools were filled, amounting to approximately $200 million.
MELD stopped accepting new delegations on October 27. At that time, about 620 million ADA had been delivered, for a total of more than $1 billion. In total, ISPO had more than 40,000 members. MELD also generated $10 million in revenue.
ISPO was a major departure from previous crypto funding initiatives, notably the Initial Coin Offering (ICO) and the Security Token Offering (STO), and was a tribute to the growing Cardano ecosystem. He also highlighted pent-up market demand for DeFi projects, which continues to intrigue investors.
Blockchain projects raised billions of dollars in funding in 2017 and 2018 before regulatory action and a massive cryptocurrency market put an end to this obsession. Source: 3TS Capital
Why Cardano?
According to CEO Ken Oling, of all existing Point of Sale (PoS) chains, MELD chose Cardano to be the ISPO due to its low transaction costs, attractive effort mechanism, and comprehensive architecture. During the initial development phase of MELD in mid-2020, Cardano was considered the best option given the conditions surrounding Ethereum (ETH) at the time.
“There are no more blockchains left,” Oling told Cointelegraph, adding:
“One of our requirements was a modern PoS blockchain. The only viable option at the time was Cardano. You have Solana, which has a two-tiered betting mechanism and is more complex compared to the blockchain. It also works legally on In addition, you have Other POS block chains, but none offer the full picture or the whole package. ”
Related: How Solana and Cardano Pave New Paths for NFT Growth
Oling said his company remains “optimistic” about Cardano’s future, despite recent difficulties. In recent months, the performance of ADA has fallen significantly after it was one of the most successful markets in the cryptocurrency market in September.
Achieving financial efficiency
In essence, MELD offers fiat banking, which allows users to lend and borrow both crypto and fiat currencies, betting their MELD tokens in exchange for interest. Lenders can deposit both crypto and fiat currencies on the platform. Borrowers have the option to borrow both types of assets after placing the cryptocurrency as collateral.
The security option for cryptocurrencies is attractive to investors because it means that they can borrow fiat currencies to cover their costs without having to sell their digital assets and thus incur capital gains penalties. (Capital gains tax is a source of fear for crypto investors as portfolio holders are always looking for ways to get the most out of their newfound wealth.)
When asked what makes MELD different from other crypto-lending and lending platforms, Oling highlighted two factors: First, “we offer the highest level of transparency,” he said. “It is on the blockchain, so everything that happens with funds via the protocol is completely open, unlike centralized crypto lending and lending services.”
Second, on a more practical level, MELD “offers users fiat currencies for their crypto-backed loans, while other competitors […] DeFi can only offer other cryptocurrencies.”
On the topic: DeFi could be 100 times more than today in 5 years
Cryptocurrency lending has become one of the major utility issues for DeFi, with Aave and Compound reaching more than $14 billion and a total of $11 billion blocked.
