While Ethereum (ETH) is constantly in the news cycle regarding its upcoming 2.0 update, similar smart contract-powered platforms are slowly building up their reputations. 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’ll need the support of layer-two solutions to scale, remain secure and manage and incentivize their communities. ADALend is leading the charge in this regard, offering features to slowly entice users away from Ethereum and onto Cardano.
ADALend is a Cardano-based lending protocol aiming to provide decentralized finance DApps with a flexible layer-two solution similar to those offered by Ethereum-based layer-two protocols.
The ADALend solution will offer various lending pools, each with its own cryptocurrency. From there, users can deposit assets to the pool in return for interest, reducing the number of idle assets within the Cardano ecosystem.
The platform then supports borrowers — users who borrow amounts of said cryptocurrency by depositing another asset as collateral. The total amount of the borrowed assets is based on what they put up as collateral, alongside the assets they’ve already borrowed.
Users can borrow funds for as long as they’d like, with partial or full payments accepted whenever. However, a borrowing position can see liquidation in the case of a significant price change. Liquidation will occur when the value of collateral drops below a pre-established threshold.
All price information is pulled from oracles, which are tied to various price providers to keep values as accurate as possible.
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