ADALend is cheaper, faster and more eco friendly than Ethereum lending solutions
The ADALend DeFi lending protocol powers a new generation of flexible financial services for digital asset markets. From speedy loan approval to automated collateralization and trustless custody, ADALend is a lending solution to watch in the DeFi space.
ADALend is a scalable, decentralized lending protocol built on the Cardano blockchain. It is cheaper, safer and more environmentally friendly than its Ethereum competitors. In this article, we’ll take a closer look at why you should choose ADALend on Cardano over an Ethereum competitor.
As Ethereum users will know, gas fees can be prohibitively expensive. Aave, the Ethereum protocol to earn interest on deposits and borrow assets, is a working solution for DeFi use cases, but it prices out many users. Gas fees at various stages in 2021 exceeded $80 per transaction. It’s not without reason that Aave expanded its operations to Polygon in an effort to escape costly gas fees and attract a bigger audience.
Keeping the cost to lend low
ADALend, in contrast, is affordable from the start. You don’t need to transfer assets from Ethereum to Polygon using a costly bridging service. Whether you want to initiate a contract, take out a loan, or boost your collateral, the fees for all these decentralized services are low. Given that Aave has locked up over $12 billion in its potentially costly smart contracts, ADALend could easily attract a share of the market.
IOHK founder and brainchild behind ADA, Charles Hoskinson, built Cardano with the ‘unbanked’ and underprivileged in mind. His goal is to bring a new wave of financial tools to those who need it most. The team at ADALend are in agreement: if ADALend is to eliminate banks and intermediaries, it has to work smoothly and be affordable for everyone. As a result, fees have remained and will likely remain low on the Cardano blockchain. This benefits the dapps utilizing the ecosystem, including ADALend.
In addition, ADALend will leverage Chainlink and Ergo oracle technology to provide a more secure and efficient experience for clients. Using Ergo’s oracle pools is more efficient and configurable than Chainlink’s oracle architecture, which relies on many single oracle data sources. AAVE solely makes use of Chainlink oracles. Ergo’s oracle pools are more efficient and configurable than Chainlink’s oracle architecture, which uses numerous single oracle data sources. However, it’s best to take advantage of both.
Efficiency is everything
A common critique of the crypto space is energy consumption. Ethereum and Bitcoin burn through more electricity than countries like Argentina and Portugal due to Proof-of-Work consensus mechanisms. While it’s true some miners consume renewable energy sources, the practice is not exactly environmentally friendly.
ADALend, however, takes advantage of Cardano’s Proof-of-Stake consensus system. Specifically, the Ouroboros consensus algorithm is the tool that secures the Cardano network. It is a far less resource-intensive system than its competitors and requires users to stake their ADA to secure the network.
Admittedly, Ethereum also seeks to upgrade to a Proof-of-Stake system like Cardano’s. However, the idea was first discussed in 2017 and the process remains elusive. Until then, Cardano is the superior network for eco-friendly crypto enthusiasts.
ADALend stakes its claim
A side benefit of running on Proof-of-Stake is speed. While Cardano already has a reputation for being a peer-reviewed paradise, it’s also easy to build and enact protocols on. Unlike Ethereum’s Solidity coding language which is hard to use and build (trust me, or just give it a go yourself!), Cardano uses Haskell.
The Haskell codebase is a widely-used programming language. Cardano chose Haskell for its simplicity and ease of use. It means that dapps and DeFi solutions on Cardano could grow exponentially. Consequently, ADALend will be in good company and will benefit from increased interoperability.
It’s clear by now that leveraging the benefits of the Cardano blockchain makes sense. It’s only through projects like ADALend that Cardano can democratize and decentralize the world of finance.
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