Today, we are thrilled to announce our latest partnership with Aada Finance! This will be a big step for Cardano DeFi, constituting the first instance where two protocols build on top and with each other directly on-chain, harnessing one the key features of DeFi: Composability.
Aada Finance is a crypto assets lending platform on Cardano that enables users to lend and borrow cryptocurrencies in a trustless manner. AADA utilizes a novel primitive, NFT Bonds, to render the lending and borrowing experience more user-friendly, as NFT Bonds are both tradable and transferable. AADA Finance and Minswap will collaborate on three fronts: a Liquidation Oracle solution, the Collateral Swap function and $AADA Liquidity Incentives on Minswap.
Liquidation Oracle solution
The Liquidation Oracle is AADA’s decentralized solution to perform liquidations. As a lending and borrowing platform, there is a big need for a decentralized and autonomous oracle, so that smart contracts can foresee what loan positions can be liquidated. AADA’s Liquidation Oracle can only approve liquidation transactions when the loan to collateral value decreases to a certain level. Minswap Liquidity Pools will be used by liquidation oracle nodes to perform liquidations. Minswap itself will participate as one of the node runners earning a share of the liquidation fee.
Minswap is currently the most liquid DEX on Cardano. As such, Aada Finance will rely on Minswap Liquidity Pools in order to liquidate and swap collateral for defaulted loans. In a seamless way, AADA Finance will enable its users to choose Minswap as the DEX to swap their collateral to $ADA, if loan liquidation is triggered.
$AADA Liquidity Incentives on Minswap DEX
In order to increase $AADA/$ADA Liquidity on Minswap before mainnet launch, AADA has proposed the addition of $AADA incentives to $AADA/$ADA LPs on Minswap. This highlights the intention of AADA to grow its liquidity, and its choice of Minswap DEX as the most user-friendly DEX on Cardano to do so.
Addition of $AADA incentives would give the $AADA/$ADA Pair on Minswap 4x Yields. Given the $AADA/$ADA Pair on Minswap meets all requirements, incentives will be implemented, as the AADA community approved.
Minswap is a community-centric decentralized exchange on Cardano. In that it has no venture capital funding or private investment, making their tokens fairly distributed, and ensuring it’s the community of users that are maximally rewarded, not speculators and insiders. Minswap aims to capitalize on Cardano’s peer-reviewed and secure pillars to realize its potential of financially empowering everyone.
About AADA Finance
AADA Finance is a crypto assets lending platform built on the Cardano blockchain. The platform uses a pooled lending protocol to make assets more readily available and to provide a seamless lending and borrowing process. Users are able to deposit assets to earn a yield, obtain a loan (overcollateralized and undercollateralized) and swap deposited assets. By building on Cardano, the platform will also be able to offer extremely low transaction fees.