As Liquid releases the first peer-to-pool lending and lending facility based on Cardano, the number of decentralised finance solutions built on Cardano is fast increasing.cardano-based The innovative peer-to-pool lending and borrowing solution has just been the subject of an interesting announcement that was recently made by Liquid Labs. On Cardano’s preview testnet, the newly added functionality may already be seen in action.
The new system makes use of Liquid smart contracts that have been custom-built for the purpose of ensuring custody, escrow, and settlement between borrowers and providers. For the sake of the supplier’s safety, the collateralized assets are brought into the electronic contract and stored there permanently.In order to define liquidation levels and take advantage of algorithmic interest rates, the smart contract is connected to an Oracle price feed. Additionally, the smart contract includes open APIs.
The solution, which the developers claim was implemented approximately two weeks ago on the preview testnet and three weeks earlier on the legacy testnet, consists of market lending and lending, an interest rate curve, and batch contracts. The announcement will be made to the general public within the following few weeks.
The absence of a human element is the primary distinction that can be made between lending from peer to peer and lending from peer to pool. The majority of Liquid’s solution is based on the peer-to-pool model of loan and borrowing, which means that interest rates are computed by an algorithm that is based on supply and demand flow measurements. In other words, rates are determined algorithmically.When the year is over, Liquid will have Cardano intends to conduct a public launch on the mainnet once all of its tests and audits have been completed successfully.
Cardano’s decentralised financial industry is expanding rapidly, and Liquid is a component of it. Unfortunately, due to limitations in the UTxO mechanism, developers were forced to come up with alternative methods of bookkeeping transactions. This is the reason why DeFi solutions bloomed on the network much later than alternative account-based networks such as Ethereum or Solana. came into existence.
