Ardana

An over-collateralized, stablecoin-based protocol offering a multi-asset pool DEX and enabling borrowing against over-collateralized assets.

The Ardana protocol revolves around around a decentralized stablecoin, dUSD, that is over collateralized by on-chain Cardano native assets and soft-pegged to the US Dollar. It is yet to be announced how much the stablecoin will be over-collateralized by.

dUSD is the first iteration of Ardana’s stablecoins. In the future multiple stablecoins, representing other FIAT currencies, will be backed, minted, and traceable on the platform.

Danaswap: The DEX

An AMM based DEX with muti-asset pools, i.e. not just asset pairs, providing minimal slippage even for large trades.

Borrowing

Users can borrow dUSD by locking up their approved Cardano Native Token collateral in an over collateralized loan; with collateral ratios yet to be determined.

Throughout the period of the loan the user must maintain a sufficient collateral to loan ratio, in the same native token used to create the loan, or have their assets liquidated. The opposite is also true, if the assets laid down as collateral rise in value then a user can choose to repay only a part of their loan amount, release some collateral and continue with the loan.

When a user deposits their collateral into an Ardana smart contract stable coins are minted in return. A stability fee of 3% per annum is charged for borrowing on the platform and is charged on a pro rata basis.

Liquidation

When a position is liquidated the collateral must be auctioned before the collateral falls below the value of the debt. The collateral is auctioned to liquidators who bid against each other to purchase the asset. The revenue from this auction is used to settle the users debt with the platform. If there are insufficient bids for the collateral the debt is absorbed by the platforms buffer, “Ardana Buffer”, who’s purpose is this. This buffer is funded by stablecoin proceeds from previously successful collateral auctions.

DANA: A Platform Token

Users can earn rewards derived from platform fees by:

Staking DANA to earn exDANA
Providing liquidity
Depositing dUSD into the “Saving Module” i.e. staking dUSD

DANA holders can also vote and influence the direction and development of the platform.

Ardana plans to have a multi-currency FIAT onboarding ramp along with mobile applications to increase familiarity, accessibility, and use of the platform amongst people.

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Glossary

On-Chain

These are all the on-chain NFTs, and on-chain NFT collections, that currently exist on Cardano. Many people consider on-chain NFTs to be better, or more special, than off-chain NFTs.

In regards to the on-chain vs off-chain NFT argument, the image represented by an off-chain NFT is found by following a link, typically stored on the IPFS, from the NFTs metadata. This can be changed by the person who uploaded it. The image represented by an on-chain NFT is coded into the metadata and is, therefore, immutably coded into the blockchain's history. This is usually, but not always, in the form a language that your browser understands, allowing your browser to interpret that information and display the NFT.

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)

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.

Borrowing

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.

Auction

An auction is when something is put up for sale and people place bids to determine who wins, a.k.a. buys, the item. There are multiple types of auction out there and below are the most common types:

English Auction: An item starts at a certain price and people places bids that raise in value with each bid and the winner is the person who places the highest bid. They then pay the value of their bid.

Dutch Auction: An item starts at a certain high price. The price is then progressively lowered until someone claims it and they pay the price that they stopped the auction at.

Sealed Bid Auction: People write down their bids for an item and submit them. Once the time for submitting bids is over then all the bids are opened and the highest bidder wins the auction.

Vickery Auction: Works in almost the same way as a sealed bid auction. However, when all the bids are opened the highest bidder wins but they pay the price of the second highest bid.

Auctions, especially English auctions, often have reserves attached to them. A reserve means that the seller sets a minimum price for the item. If the price is not met by the buyer then the item is not sold. Reserves can be kept hidden, which is most common, or they can be disclosed to the bidders.

AMM

AMM stands for Automated Market Maker. This is an algorithm, often supplemented by oracles, that facilitates the pricing and exchange of assets between users. Assets are exchanged at market value through liquidity pools. These pools are created by Liquidity providers, LPs, who deposit assets to the exchange in pairs. This “asset pair” then allows users to swap one asset for the other through the liquidity pool. Fees are paid to the LPs who provided the liquidity. The more liquidity a pair has the less “slippage” a user experiences, meaning the less likely the user is to experience a price change in their trade.

Danaswap: The DEX

Borrowing

Liquidation

DANA: A Platform Token

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