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 is built on the fundamental fact that they are bullish on the longterm price of ada. On the Yamfore Cardano lending platform users deposit their ada, along with a certain amount of the platform’s token (ratios vary depending on the usage ratio of the platforms treasury funds for loans), as collateral to receive loans in stablecoins native to the Cardano blockchain.

The loan amount they receive is based on the value of ada the user deposits and the deposited platform tokens only are a security deposit for establishing the loan. These staked platform tokens are always returned in full to the user, whereas the 5% fees for using the platform is deducted from the user's ada.

The receiver of the loan also receives an NFT that represents their ownership of the deposited collateral and can trade this NFT on secondary NFT marketplaces. The loanee does not need to make any interest repayments on their loan and their loan term is indefinite. How is this possible?

A 5% Loan Fee and Staking Rewards are The Loan’s Interest

When a loanee wants to collect their loan they return the NFT representing their loan to the platform and the platform checks that the value of the locked ada collateral currently equals 105% of the total loan value.

The platform then removes this value from the user’s ada collateral before returning the remaining collateral ada and all their staked platform tokens to the wallet that returned the NFT to the platform.

So the platform takes 5% of the value of the loan amount, in ada, as a part of the fee for the loan. It also keeps all the staking rewards accumulated by the ada collateral whilst it was in the platform's custody.

The user’s ada collateral is never liquidated, regardless of market price action. If ada price is not high enough for the collateral to equal 105% of the loan's value when the user wants to withdraw it the user can chose to pay up the deficit to release their collateral. Note that if this is the case they’ll only be returned their deposited platform token, all the ada will be kept by the platform to pay off the loan amount.

Industry

DeFi

Lending Protocol

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.

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!

A 5% Loan Fee and Staking Rewards are The Loan’s Interest

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