MELD

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

MELD links the world of crypto backed loans with traditional (and non-traditional) FIAT lenders. The MELD protocol acting as the middleman between the two parties. Here’s how it works:

Fiat lenders provide FIAT to the MELD protocol and this is then used to fund loans that are backed by the collateral deposited by borrowers.
Borrowers deposit approved crypto collateral. Borrowers must deposit 200% of the value of their loan as collateral, e.g $100USD worth of crypto entitles you to a $50USD loan. Borrowers can take out a direct loan or open a line of credit against their deposited crypto.
Borrows make regular monthly payments to pay back their loan or line of credit, and the interest. Once their loan or line of credit is fully paid off they can retrieve their collateral. Lenders receive 100% of the interest paid on the loans they provide.
If a loan reaches 85% of the value of the deposited collateral then the borrower liquidated and the lender receives 100% of their FIAT back.

When lenders deposit their FIAT and borrowers deposit their collateral they receive MELD tokens in return. These tokens entitle the user to receive a portion of the rewards generated by the protocol.

Those taking out loans are required to go through KYC/AML checks.

MELD Vaults and Token

The crypto assets deposited by borrowers are locked into "MELD Vaults", i.e. community managed liquidity pools, where they accumulate trading fees from external DEX aggregators. This is how the protocol generates revenue.

The rewards from these pools are split 50:50 between the MELD protocol and MELD token holders. These tokens also give them platform governance rights and it is worth noting that they are not returned at the conclusion of the loan.

MELD has integrated impermanent loss protection for crypto depositors. This is done by other users who staking MELD tokens to the MELD protocol staking pools specifally for covering impermanent loss. The incentive to stake to these pools is that 40% of all fees collected for the protocol are distributed to those staking here.

Industry

DeFi

Lending Protocol

Tags

Yield Farming

Lending

Borrowing

Loan

Partnerships

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Author

builtoncardano

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Glossary

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.

Aggregator

An aggregator is a person or entity who gathers things together and then either displays them to others or utilizes what they have gathered for a purpose.

The most common use case for aggregators in the blockchain world is a DeFi protocol that aggregates DEXs. This means that a user submits their order to the aggregator protocol and the protocol distributes that order across multiple DEXs to get the user the best price at the lowest cost.

MELD Vaults and Token

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