ADALend, one of the first decentralized lending protocols on Cardano, the largest proof-of-stake (PoS) blockchain, is designed to allow users to get a loan with the aid of liquidity pools, easing lending operation in the process. In classic finance, applying for loans has been a difficult and cumbersome practice. ADALend is changing all of that.
In a blog post released on 9th December, ADALend is described as a decentralized platform that uses smart contracts to allow for decentralized crypto-lending and the creation of financial products that can be controlled at the individual level.
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The novel protocol, leveraging smart contracts on the Cardano blockchain, is designed to counterbalance the gap between the lending segment and blockchain technology.
ADALend tweeted, “Anybody who has had to take out a loan knows that the process is often long and includes humiliating strings attached to the loan. Luckily, we have ADALend to fix all that.”
Anybody who has had to take out a loan knows that the process is often long and includes humiliating strings attached to the loan. Luckily, we have #ADALend to fix all that 🤩🚀🧨 make sure to check our our new medium article here for more details 🙏🥳🔥 https://t.co/hgiTLpyPuu
— ADALend (@ADALend_finance) December 9, 2021
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According to the blog post, there are no requirements to meet in order to be part of the lending operation. Also, anyone can deposit any amount and receive the corresponding APY value set by the protocol in share tokens.
In order to redeem value from liquidity pools, lenders convert share tokens into the underlying assets of the pools. When underlying tokens grow in value, the share tokens also increase. And lender can repay the loan when it’s ready by sending the money and accrued interest between the liquidity providers, which can also be referred to as borrowers.
ADALend Brings Multi-Layered Security to Lending Protocols on Cardano
As stated in the blog post, the key priority of ADALend is the health and security of the protocol. It has integrated internal and external oracles to maintain multiple computational layers of price-checks that maintain the liquidity pools. This implies that no malefactor will be able to perform a flash loan attack against the protocol.
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ADALend further states that protocol architecture, code quality, health monitors, as well as active liquidation bots, and insurance all contribute to the overall security and safety of the project.
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