Cardano the game-changer for DeFi? First lending protocol in the starting blocks

The IOHK strives with its support program for the use of the cryptocurrency Cardano (ADA). Now the development company behind Cardano has considered the project “Liqwid” as a potential candidate for a grant of up to $250,000.

Liqwid is a DeFi credit protocol and is to be used as one of its so-called “idea catalysts” for Cardano. That is a clear sign that Decentralized Finance (DeFi) in Cardano’s use case portfolio is not long in coming.

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Cardano Project Catalyst: Scientific & democratic approach

On Twitter, the IOHK said on Tuesday, December 8th, that several promising ideas that have been chosen as idea catalysts will be unveiled in the coming days. “Project Catalyst” is a public fund that aims to bring “research, social experimentation and community consent to create an open, democratic culture within the Cardano community.”

Project Catalyst’s first candidate to be announced is Liqwid, a DeFi credit protocol that allows participants to make interest on deposits and lend assets directly on the Cardano Blockchain.

Developers convinced of ADA’s future

In an October post on Medium, Liqwid architect Dewayne Cameron described his protocol as “an automated open-source liquidity protocol for lending.”

“Liqwid Finance is not a bank, it is an open source financial infrastructure. Liqwid does not have a “target region/user”; the functional implementation of Liqwid is an open source credit protocol on a distributed decentralized cloud, by design this is a global strategy.”

The decentralized finance market has seen an upswing in the last six months. At the time of writing, the total value of DeFi projects (TVL) was $14.6 billion, spread across the credit, derivatives, asset and DEXes markets.

“Our team is participating in the Cardano funding program to receive our seed funding, which will fund our developers as well as our development partners Appinventiv and Tweag […] we look forward to showing the DeFi industry what a community-led DAO project on Cardano can do without venture capital compared to the VC-backed Ethereum DeFi protocols we see today.”

Liqwid in development phase: the DeFi gamechanger of 2021?

Liqwid begins its development phase next week, with testing scheduled for late Q1 2021. Although the official launch depends to some extent on the rollout of smart contracts at Cardano, Cameron is optimistic that Liqwid’s roadmap will align with the IOHK’s planned roadmap.

Smart contracts at Cardano are planned for mid/late Q1 2021 and are expected to achieve full on-chain functionality by then.

More Cardano funding planned for 2021

On December 8th, IOHK named “Maybe Workshop” – a project-based learning platform – as another candidate for the funding program. The best ideas, selected by the Cardano community, will receive ADA worth up to $250,000 to further develop their projects.

IOHK plans to issue millions of dollars worth of ADA in 2021 as part of future funding rounds for dApps and DeFi protocols.

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(Featured image by LauraTara via Pixabay)

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