ADALend: The Sleeping DeFi Lending Giant on Cardano

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Lending Platforms

DAO governed, scalable, and decentralized lending protocol

Decentralized lending protocol ADALend is aiming to shake up the DeFi space with its blockchain-powered lending services. The ADALend protocol will power the new wave of flexible financial markets by serving as a foundational layer for instant loan approval, automated collateral, trustless custody, and liquidity. All on the Cardano blockchain. 

Decentralized finance, or DeFi, is a subset of the blockchain industry that aims to provide a decentralized version of mainstream financial services. Over the last two years, the industry has grown from $1B in January of 2020 to a staggering $98B in September 2021, surpassing all expectations. 

While several DeFi platforms find success on Ethereum, users are footing the high transaction costs and fees. Pushed even higher in 2021 as newly minted NFT collections eat resources and push gas fees for DeFi users even higher. There are several core reasons why ADALend is perfectly positioned to offer these same services. At a fraction of the cost to users, coupled with lightning-fast transaction times. 

Cost & Speed 

As mentioned, ADALend utilized Cardano as the main blockchain that will power its DeFi system; unlike AAVE or Uniswap, for example, which is built on Ethereum, Cardano is much cheaper to send, receive, and initiate contracts. 

In 2021 Ethereum gas prices skyrocketed, making customers realize that fees were a significant problem for everyone using popular Ethereum protocols. In some instances, in 2020 and 2021, an average fee for a transaction reached as high as $80. Cardano fees remain low in comparison, with an average cost of $0.40 per transaction. Mainly due to its dual-layer design, which separates computations from settlements. The benefits of DeFi platforms like ADALend running on Cardano should be clear to see. 

The Ethereum network currently uses a Proof-of-Work (PoW) blockchain which frankly is still inefficient compared to the Cardano blockchain, a Proof-of-Stake (PoS) system. The Cardano blockchain allows the processing of a much higher number of transactions in comparison to Ethereum. Moreover, the Cardano blockchain is much faster.

Safety & Price Stability 

The Cardano codebase is developed in Haskell, a widely popular programming language explicitly chosen for its ease of auditing. The Solidity programming language was invented by Ethereum developers, a very specialized language, and few engineers can write it, much alone peer-review. Which has become a massive selling point of the Cardano blockchain. The more engineers who can review and audit code, the more secure and airtight the system will be. 

To put it another way, Cardano developers want the blockchain to be as free of code errors as possible to avoid future security concerns. While some commentators see this as unnecessary, the benefits of rolling out faultless code will no doubt reap huge longer-term benefits for Cardano and ADALend. 

Most Ethereum based protocols use only Chainlink oracles to feed price data to their applications. Price stability on ADALend is powered by Ergo oracles and Chainlink, offering customers a more secure and efficient experience. Ergo’s oracle pools are more efficient and configurable than Chainlink’s oracle architecture, which uses numerous single oracle data sources.  

Better for the environment 

One big concern arising lately has been the energy efficiency of blockchain protocols. Ethereum is mainly powered by miners consuming a lot of energy to secure the network, eating massive amounts of power in the process. Cardano uses a Proof-of-Stake consensus algorithm called Ouroboros. This closed-loop system efficiently uses network resources by allowing ADA holders to delegate their assets to secure the network. The result is a much less resource-intensive system. 

ADAlend had an oversubscribed seed round earlier last month; with the private sale round running out quickly, many investors are rushing in to guarantee their spot in the private sale.

To find out more about ADALend, visit their website and read their whitepaper.

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