Borrowing

  • Yamfore

    A crypto backed loan platform with no liquidation events, no interest payments, and indefinite loan periods. Fundamentally long on the price of ada.

    Yamfore, Cardano DeFi.
    Yamfore
  • Kulfi Finance

    A decentralized lending and borrowing platform for Cardano native tokens. Borrowers pay a fixed interest rate, lenders receive a fixed rate for depositing funds

    Kulfi Finance, Cardano DeFi.
    Kulfi Finance
  • Flac Finance

    A lending protocol where users can borrow fiat against their crypto and stablecoin assets. Initially targeting the Indian market.

    Flac Finance, Cardano DeFi.
    Flac Finance
  • ADALend

    A lending protocol of single currency pools with an unlimited borrowing duration and fluctuating interest rates based on loan length and pool utilization rate.

    ADALend, Cardano DeFi.
    ADALend
  • Commonlands

    Community Driven Land Registry

    Commonlands, Cardano DeFi.
    Commonlands
  • Fluid Tokens

    A peer-to-peer lending protocol where borrowers set the terms and front their Cardano NFT as collateral for an ADA loan. Lender then choose which loan to fund.

    Fluid Tokens, Cardano DeFi.
    Fluid Tokens
  • Lending Pond

    A decentralized lending and borrowing platform where borrowers list Cardano NFTs as collateral for an ADA loan and lenders choose which loans they want to fund.

    Lending Pond, Cardano DeFi.
    Lending Pond
  • LiqwidX

    A decentralized borrowing protocol accepting ADA as deposits for over-collateralized loans issued as a stablecoin that is algorithmically pegged to USD.

    LiqwidX, Cardano DeFi.
    LiqwidX
  • Astarter

    A launchpad and accelerator for projects building on Cardano, also featuring a DEX, a decentralized lending and borrowing, and a technical support platform.

    Astarter, Cardano DeFi.
    Astarter
  • Aada

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

    Aada, Cardano DeFi.
    Aada
  • Revuto

    A subscription management and micro-lending and borrowing platform aiming to redefine their user's personal management of subscription services.

    Revuto, Cardano DeFi.
    Revuto
  • Paribus

    A cross-chain, collateralized loan platform aiming to help users unlock the liquidity locked in a wide variety of digital assets.

    Paribus, Cardano DeFi.
    Paribus
  • B58 Finance

    A mobile-based wallet with an integrated DeFi platform, aiming to increase Cardano adoption through the familiarity of the access point for the general public.

    B58 Finance, Cardano DeFi.
    B58 Finance
  • Liqwid

    An open source and non-custodial liquidity protocol for interest rate curves based on lender supply and borrower demand of the underlying Cardano native asset.

    Liqwid, Cardano DeFi.
    Liqwid
  • MELD

    Deposit crypto to use as collateral and receive a cash loan, deposited into any bank account in the world.

    MELD, Cardano DeFi.
    MELD

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.