Cardano the gamechanger for DeFi?

Cardano the gamechanger for DeFi? First Lending Protocol in the starting blocks

The IOHK strives with its support programme for a use of the crypto currency Cardano (ADA). Now, the development company behind Cardano has considered the project “Liqwid” as a potential candidate for funding of up to US$ 250,000.

Liqwid is a DeFi credit protocol and is to be used as one of its so-called “idea catalysts” for Cardano. This is a clear sign that Decentralised Finance (DeFi) is not long in coming in Cardano’s use-case portfolio.

On Twitter, the IOHK said on Tuesday that several promising ideas that have been chosen as idea catalysts will be unveiled in the coming days. “Project Catalyst” is a public fund designed to “bring research, social experimentation and 1K Daily Profit review community consent to the creation of an open, democratic culture within the Cardano community”.

Project Catalyst’s first candidate, which has now been announced, is Liqwid, a DeFi loan protocol which allows participants to make interest payments on deposits and lend assets directly on the Cardano Blockchain.

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In an article on Medium in October, Liqwid architect Dewayne Cameron described his protocol as “an automated open source liquidity protocol for lending”.

“Liqwid Finance is not a bank, it is an open source financial infrastructure. Liqwid has no “target region/user”; the functional implementation of Liqwid is an open source lending protocol on a distributed decentralised cloud, by design this is a global strategy”.

The market for decentralised finance has experienced an upswing in the last six months. At the time of writing this article, the total value of DeFi projects (TVL) amounted to $14.6 billion, spread across the markets for loans, derivatives, assets and DEXes.

“Our team is participating in the Cardano Funding Program to obtain our seed financing, which will fund our developers and our development partners Appinventiv and Tweag […] we look forward to showing the DeFi industry what a community led DAO project on Cardano can achieve without venture capital compared to the VC based Ethereum DeFi protocols we are seeing today”.
Liqwid in development: The DeFi Gamechanger of 2021?

Liqwid will start its development phase next week, with testing planned for the end of Q1 2021. Although the official launch depends to some extent on the introduction of smart contracts at Cardano, Cameron is optimistic that Liqwid’s roadmap will be in line with the roadmap planned by IOHK.

The Smart Contracts at Cardano are planned for mid/end Q1 2021 and should achieve full on-chain functionality by then.