Aada

A decentralized, non-custodial crypto asset lending platform offering both over-collateralized and under-collateralized loan, and an ERC-20 converter.

Aada is a decentralized money market protocol based on lending pools of crypto assets. In this market users can be depositors (lenders) or borrowers.

Lenders deposit their assets into smart contract controlled liquidity pools and accrue interest paid on loans drawn from the liquidity they provide to the pool.

An NFT-Bonds Strategy

NFTs represent an individual's deposit on the platform. Representing these deposits as NFTs means that they are tradable on the open market while the funds they represent are locked in the protocol accruing interest.

Lenders - When a lender deposits assets into the protocol a new NFT-bond representing their assets, and any interest it accrues from that point forward, is minted and sent to the lender. If the lender trades their NFT-bond to another user the new holder, upon trade-in, is entitled to the initial amount and the interest the bond has accrued since its creation.

Borrowers - A borrower is also a depositor because they must deposit assets to collateralize their loan. They receive an NFT-bond representing both their deposited collateral and their loan. Whoever holds this bond must provide the loan amount in order to claim the collateral also locked up with the NFT-bond.

Dynamic Interest Rates

Borrowers can borrow from any of the asset pools and the interest rate they pay is dynamic and calculate based on the utilization rate of the pool.

If a liquidity pool has a low utilization rate i.e. not many loans are being drawn from it; then the interest rate will be low to incentivize borrowing from that particular pool.

If a liquidity pool has a high demand i.e. many loans are being taken against the assets in that pool and the liquidity is almost fully allocated; then the interest rates will be higher. This will encourage both the repayment of loans and more deposits from lenders looking to capitalize on the greater gains to be had from lending at higher interest rates. As a result the interest rate of the pool will decrease.

The idea behind this dynamic interest rate, which begins to rise excessively as a pool approaches saturation, is to prevent pool saturation, i.e. when 100% of the pool is allocated to borrowers. When a pool is saturated liquidity providers can’t withdraw their deposited collateral.

Flash Loans

Flash loans allow anyone to borrow any amount of an available assets without putting up collateral. This is under the condition, written into a smart contract, that the liquidity is returned within one block of the initial transaction. It is unclear how these loans are guaranteed to the platform without the depositing of collateral.

Governance

AADA token is the platform's token which lenders receive for depositing to liquidity pools and also accrue as interest on their deposits. These tokens can be staked to the platform for voting in governance votes, or stored in wallets to accomplish the same function. The whitepaper states that Aada wants to provide higher voting powers to those staking liquidity to DEXs but can’t assure this until a “stable DEX platform is built on Cardano”.

A dynamic quorum has been put in place for governance votes. This means that for a proposal to be accepted it must have a significantly higher majority of yes over no votes in order to pass.

A safety module is in place where users lock their AADA tokens to protect the protocol and receive daily fixed rewards. This is to reduce the impact of a shortfall event, i.e. unexpected loss of funds from:

Smart contact risks
Liquidation risks
Oracle failure risks

Aada DeFi Academy

This DeFi academy has been built to help spread the word about DeFi and educate new and existing smart contract developers on Cardano.

Industry

DeFi

Lending Protocol

Tags

Borrowing

Lending

Loan

ERC-20 Converter

Yield Farming

NFT

Partnerships

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Glossary

Wallets

If you’re searching for where to store Cardano, ada, you’ve come to the right page. The best cardano wallet is a hotly debated topic in the Cardano community, and there are many types of Cardano wallet, all listed here, available to users. The only Cardano desktop wallet available is Daedalus, a full node wallet that downloads the complete Cardano blockchain, ~100GB.

By far the most popular type of wallet is a Cardano light wallet and there are many of these for you to choose from. The second most popular type of wallet is a Cardano web wallet. Most Cardano wallets will show the Cardano price, and a few have even the integrated the ability for you to buy Cardano, ada, directly in the wallet!

Almost all the wallets listed above allow you participate in the Cardano staking protocol, Ouroboros, where you can help to secure the network and earn passive income in the form of staking rewards. Many of the wallets listed above will also allow you to search for which pool to stake your Cardano, ada, to right in the wallet itself.

Finally, there are multiple Cardano cold storage wallets for you to choose from. There are five hardware wallets that offer native support for where to store ada, and two of them, the Ledger and Trezor are supported by multiple light wallets allowing you to use your favorite interface to keep your coins secure in cold storage.

Oracle

In the ancient world oracles were people through whom the Gods spoke directly to the inhabitants of earth. In the blockchain and crypto world oracles are a service that provides off-chain data to smart contracts running on a blockchain.

On-chain functions, i.e. smart contracts, cannot access real world data on their own. This is problematic when a smart contract is trying to provide the real-time price of financial assets to users, or when it needs to determine the outcome of a sporting event for a gambling protocol, or even when it has been asked to use something measurable in the real world, such as the temperature or quantity of snowfall, in its calculations. Oracles can feed any real world data onto the blockchain for use by smart contracts.

Data is collect it in a variety of ways: APIs, websites, sensors, etc, and can be manual input by humans. This data is collect by nodes and is then passed on to the oracle service that then supplies the smart contract with the data. Having one node supplying data means a central point of failure, and a high potential for manipulation of the data. As a result oracle services usually use a network of nodes to build a consensus of the correct data point and to prevent the data from being manipulated, thereby helping to ensure trust in the data they supply.

NFT

If you’re looking for a Cardano NFT then you’ve found the place for you! listed here are all the projects that feature NFTs in some form on Cardano. NFTs are no longer just the PFP collections that made them famous, although many do still exists and you can find Cardano NFT projects here, NFTs are assets with multiple different types of utility, depending on which project’s NFTs your buying.

A Cardano NFT is a native asset on Cardano which means that, unlike on other (specifically EVM-based) chains, an NFT is not managed by a smart contract, meaning that it behaves and is managed differently to the chain’s base asset, ada. On Cardano NFTs behave the same as the chains base asset as they are native to the chain.

On this page you’ll find everything from Cardano NFT projects to DeFi projects and decentralized identity (DID) solutions that have incorporated NFTs, to the Cardano NFT marketplaces you can use to purchase NFTs.

Loan

Blockchain brings forth a new decentralized method of lending, allowing individuals to offer each other loans in a peer-to-peer fashion through smart contracts. Cardano loan platforms allow you to access Cardano collateral loans, where you lock up your holdings on the Cardano blockchain to receive a loan of equal or lesser value.

These protocols also include unique, Cardano NFT loans, where you can lock your Cardano NFT up in a smart contract, using it as collateral, in return for a loan in ada. All of this is done in a trustless manner through the use of smart contracts on the Cardano blockchain.

On the multiple Cardano loan platforms listed here you can be either the loaner or the loanee, allowing you to access loans using your existing assets as collateral, or to put your ada to work to earn you money by lending it out to others.

Cardano NFT loans are some of the most popular types of loans as the protocols allowing you to complete Cardano NFT loans, Lending Pond and Fluid Token, allow NFT owners to unlock the liquidity locked up in their assets without losing their beloved NFTs (so long as they return the borrowed assets, plus interest, in the allotted time)

Lending

Lending Protocols

Lending protocols in the DeFi world allow people to loan or lend money in a peer-to-peer manner, i.e. without the banking middleman. These loans are secured by the lender over-collateralizing the loan and the terms of the loan being managed in a smart contract. This gives the unbanked or those who have poor credit the ability to take loans, and it gives those with excess capital the opportunity to provide loans in a secure and trustless manner, and to earn income from them.

Over-collateralization means that the person receiving the loan locks up more than the value of the loan to secure it e.g. if they want to loan 100 they must lock up 150. How much they over-collateralize the loan by, and which tokens they use as collateral, depends on the platform. Some platforms only accept stablecoins, and other accept a variety of crypto assets. Typically, an individual uses one asset for collateral and takes a different asset as their loan.

An important factor in all loans is the interest rate and the length of the loan. These vary greatly by lending protocol, and loans can have fixed interest rates and periods, or infinite periods with interest rates that fluctuate throughout the loan period, fluctuating based upon the utilization rate of the pool of funds the loan was drawn from.

Importantly, the receiver of a loan is expected to maintain a certain ratio of collateral to loan, meaning that if the value of their collateral drops below that of their collateral to loan ratio, they need to add more collateral to keep the required balance. If they don’t keep up the collateral ratio they face liquidation and the loss of their collateral.

To "become the bank" those with idle tokens can deposit them into a lending protocol and earn from the interest derived from the loans their tokens are used to facilitate. Usually this deposit requires a lockup period of a certain length of time. Often, the longer the lockup period the higher the percentage return for the depositor.

DEX

Here is a Cardano DEX list for you to explore all the decentralized exchanges built on Cardano. There are multiple Cardano DEX projects for you to choose from, each with a different take on the DEX concept and the way of managing a decentralized exchange protocol.

Listed here are Cardano DEX projects that are based on both the automated market maker (AMM) and the traditional order book style of exchange. Both types of DEX on Cardano, like any other exchange, require a good amount of liquidity to operate effectively. This leads many to say that the best Cardano DEX is the one with the most liquidity. However, there are many other factors that the users of these DEXes would tell you to take into account before deciding which is the best Cardano DEX, and which one you should interact with (although a high amount of liquidity is a good indicator for users).

Interestingly, many Cardano exchanges, such as Sundaeswap, use the concept of “batchers” to collect, order, and execute transactions. This reliance on a small group of batchers to order and execute user transactions reduces the decentralized nature these exchanges as these entities could easily collude to front run transactions from particular wallets or to censor transactions from other wallets.

DeFi

Here are all the Cardano DeFi projects complete with descriptions and tags. If you’re looking for a Cardano DeFi exchange, a lending protocol, a launchpad, a Cardano stablecoin, or platforms on which to tokenize real world assets then you’ve come to the right place. The Cardano DeFi ecosystem is maturing and, as it does, we will continue to list the new Cardano DeFi projects here. If you look at Cardano in 5 years this list will be substantially different, some projects will have left it, but many many more will have been added.

If you’re looking to simply swap Cardano native tokens then a Cardano DEX is your best choice. If you’re looking to utilize your crypto holdings for a loan then take a look at all the Cardano lending and borrowing platforms on offer and choose which one fits your needs. There is much more utility in the Cardano DeFi world and we invite you to explore it here!

Borrowing

An NFT-Bonds Strategy

Dynamic Interest Rates

Flash Loans

Governance

Aada DeFi Academy

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