By Alicia Maher
Liqwid Labs based on the Cardano blockchain shared a piece of exciting news recently. It pertains to the new peer-2-pool borrowing and lending solution it developed. The latest feature is currently available on Cardano’s testnet.
Better Borrowing and Lending Ahead
The newly built solution uses the customized Liqwid smart contract. The contract guarantees custody and payment between borrowers and suppliers. Any asset used as collateral is held in the smart contract for the supplier’s protection.
The Liqwid smart contract is linked with the oracle price feed. The price feed then determines liquidity levels and how to use the algorithmic interest rates. It also has open Application Program Interfaces.
The developers said that the solution was deployed on the preview testnet about two weeks ago. They also said it was deployed on the legacy testnet about three weeks ahead. What was deployed included the market lending and borrowing, and the batching contract.
The public unveiling is expected to take place a few weeks from now. There are certain differences between peer-2-pool and peer-to-peer borrowing and lending. The major difference, however, is the lack of human factors.
The solution is mainly patterned after the Aave peer-2-pool system of borrowing and lending. It simply means the rates depend on algorithmic supply. Whereas, demand flows are calculated based on the interest rate algorithm.
Better Late than Never
Till the year ends, Liqwid working toward the public launch on Cardano’s mainnet. That is, however, dependent on the audit and test going as planned.
Liqwid is part of the rapidly growing decentralized finance frameworks on Cardano. But developers have come up with an alternative means of bookkeeping in transactions. This is a result of the limits of the UTxO protocol.
This was why decentralized finance solutions blew up later on in Cardano. It was faster on other networks such as Solana and Ethereum which are account-based.
Ethereum seems to be taking the lead in terms of network scaling solutions. This was one of the network’s major goals while transiting to the proof-of-stake protocol. Network scalability is one of the main drivers of decentralized finance.
Ethereum’s transition also promised better network security. Exploits have become rampant in the crypto space as investors and platforms lose huge funds. Crypto service providers are employing any means to make sure they secure investors’ funds.