Input Output, the company behind Cardano, has announced the launch date of its first lending and lending protocol, Aada Finance, on the Cardano blockchain.
The launch of V1 will take place on September 13, 2022 and will mark the first time that the primitives of decentralized finance (DeFi) will arrive at the Cardano blockchain, built on the foundations of the Plutus smart contract platform first introduced in the Alonzo hard fork a September 2021.
Aada Finance uses a new primitive DeFi called NFT bonds to simplify the user experience of borrowing and lending.
According to the project’s Twitter handle, Engagement with the crypto community the project started around October 2021. The decentralized app was the first launched in May 2022 on the Cardano testnet. This parallel blockchain serves as a test environment for new applications before they are deployed to the main network.
Could ADA see growth in adoption after the launch of V1?
In June 2022, Cardano’s next Vasil hardfork project received 13,003 commits as developers prepared their code to handle the new features. Over the same period, the number of portfolios increased by 1.8% to 3.4 million, indicating confidence in the ecosystem. The number of transactions on the network grew to 44 million, as activity on the network increased 5.4% from the previous month. Both bode well for Aada Finance’s success.
Another relevant metric is the total locked value. At its peak, the total value locked in decentralized protocols on Cardano was $ 192.35 million, which has since dropped to less than $ 81 million, according to DeFi Llama. The introduction of Aada Finance could give TVL a boost as the previous high corresponded to the flow of decentralized applications such as SundaeSwap (SUNDAE), Minswap (MIN), MuesliSwap (MILK), ADAX Pro (ADAX) and VyFinance (VYFI).
Aada recently partnered with Minswap to help liquidate loans when the collateral loan value drops to a specific level. Cash from Minswap will be used in the liquidation process.
The audit could prevent hiccups on the main network
But the success of the protocol will depend on Aada Finance functioning properly on the main network.
Two previous incidents cause concern. Following the launch of Cardano jpg.store’s NFT market in January 2022, the core network experienced congestion which impacted the time to close of the transaction. The launch of SundaeSwap, also in January 2022, encountered similar congestion problems.
In favor of Aada is a recent audit of its smart contract code. Blockchain security experts Vacuumlabs have verified Aada Finance’s smart contracts in preparation for launch on the Cardano mainnet. The audit included in-depth penetration testing with ethical hacking to determine risks and potential mitigations.
In other news about Cardano, Cardano’s parent company, Input Output Global, recently partnered with Pezesha, an African fintech firm that allows financial institutions to provide liquidity to small and medium-sized businesses. In particular, Cardano’s role will help simplify regulated lending and lending between participants around the world.
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