Input Output, the company behind Cardano, has announced the launch date of its first lending and borrowing 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 decentralized finance (DeFi) primitives have come to the Cardano blockchain, built on the basis of the Plutus smart contract platform introduced for the first time. in Alonzo’s hard fork. in September 2021.
Aada Finance uses a new DeFi primitive called NFT bonds to streamline the borrowing and lending user experience.
According to the project’s Twitter account, commitment with the crypto community about the project started around October 2021. The decentralized application was the first spear in May 2022 on the Cardano testnet. This parallel blockchain serves as a test environment for new applications before they are deployed on the mainnet.
Could ADA see adoption growth after the launch of V1?
In June 2022, Cardano’s upcoming Vasil hardfork project received 13,003 commits as developers readied their code to handle new features. During the same period, the number of wallets increased by 1.8% to 3.4 million, a sign of confidence in the ecosystem. The number of transactions on the network rose to 44 million, as activity on the network increased by 5.4% compared to the previous month. Both bode well for the success of Aada Finance.
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 fallen to less than $81 million, according to DeFi Llama. The introduction of Aada Finance could give TVL a boost as the previous high matched the flood of decentralized apps like SundaeSwap (SUNDAE), Minswap (MIN), MuesliSwap (MILK), ADAX Pro (ADAX) and VyFinance ( VYFI).
Aada recently entered a Partnership with Minswap to help liquidate loans when a loan-secured value falls to a specific level. Minswap’s liquidity will be used in the liquidation process.
Auditing could prevent snags on the mainnet
But the success of the protocol will depend on Aada Finance running smoothly on the mainnet.
Two previous incidents are of concern. Following the launch of Cardano’s NFT marketplace jpg.store in January 2022, the mainnet experienced congestion which affected transaction finalization time. The launch of SundaeSwap, also in January 2022, experienced similar congestion issues.
Working for Aada is a recent check of its smart contract code. Blockchain security experts Vacuumlabs audited Aada Finance’s smart contracts ahead of their launch on the Cardano mainnet. The audit included extensive penetration testing with ethical hacking to determine risks and potential mitigations.
In other news from Cardano, the parent company of Cardano Input Output Global recently associated with Pezesha, an African fintech enabling financial institutions to provide liquidity to small and medium enterprises. Notably, Cardano’s role will help simplify regulated borrowing and lending between participants scattered around the world.
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