For anyone familiar with the plague of loans, they are aware of the ridiculously long and highly frustrating strings that come with it. Indeed, the present state of financial products is made so that banks enjoy complete control over loans and those who take them.
ADALend is here to change all that. In detail, the decentralized platform will use smart contracts to enable decentralized crypto-lending. In addition, the smart contracts will also facilitate the creation of financial products which can all be controlled by the individual directly.
Share Token Operations in Liquidity Pools
To participate in the lending operation, anyone can begin by depositing any amount to receive a corresponding APY value. This value is set by the protocol in share tokens. Suffice to say, liquidity provision is a key part of the platform. Thus, it will function with both internal and external oracles so as to establish dynamic rates for liquidity pools.
Meanwhile, the redeem operation allows the conversion of share tokens into their underlying token counterparts. Hence, within this procedure, share tokens are burnt and the underlying token is given back to the user. This completes the transaction and underlying tokens grow in value since the share token increases over time.
Finally, the repayment operation takes care of paying back all borrowed money as well as all interests accrued. So, if the payback amount is below the amount needed for repayments, the borrowing amount will be taken from the repayment amount. This becomes the repayment amount. However, if the repayment amount is above the amount needed for repayment, it is then set as a lending amount.
Multi-Layered Security for Liquidity Pools
Above all, ADALend’s key priority is always, the security and health of the protocol. Therefore, the platform will integrate both internal and external oracles to maintain multiple computational layers of price-checks to maintain the liquidity pools. To highlight, the project’s overall security and safety will be kept in shape with stellar protocol architecture, code quality, health monitors, insurance, and active liquidation bots. Lastly, the project is very eager to keep evolving with the tech and trends. Thus, ADALend promises new features to continue to keep the system secure.
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Source: Cryptocurrency - investing.com
