DeFi could come to Cardano

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IOHK, the development company behind Cardano, has named a DeFi credit protocol as one of its so-called Project Catalyst ideas. This is a strong message that decentralized financial applications could get onto the project’s blockchain.

In a series of Twitter posts on Tuesday, IOHK said that some promising ideas related to Project Catalyst will be revealed 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”.

The first candidate for Project Catalyst to be announced is Liqwid, a DeFi credit market that allows participants to earn interest on deposits and borrow assets directly on the Cardano blockchain.

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

He explained:

“(1) Liqwid Finance is not a bank; Open source financial infrastructure (2) Liqwid does not have a “target region / user”. The functional implementation of Liqwid is an open source credit protocol in a distributed decentralized cloud. Design means this globally. “

The decentralized finance market has seen an upswing in the past six months. At the time of writing, the total value of DeFi projects was $ 14.6 billion across the credit, derivatives, assets, payments, and DEX markets.

“Our team is participating in the Cardano Project Catalyst grant rounds to receive our seed funding that will fund our core developers and our development partners Appinventiv and Tweag,” Cameron told Cointelegraph.

He adds:

“[…] We’re excited to show the DeFi section what a community-led DAO project without a card on Cardano can do compared to the Ethereum DeFi protocols supported by VC today. “

Liqwid starts the development phase next week. The tests are planned for the end of the first quarter of 2021. Although the official launch depends to some extent on the provision of smart contracts to Cardano, Cameron is optimistic that Liqwid’s roadmap will coincide with IOHK’s planned roll out of smart contracts.

The official start of Liqwid in the Cardano mainnet depends a bit on the official start of smart contracts at Cardano’s Go-Live in Goguen, but with the first Goguen protocol update this week our team is optimistic about our version 1. The development Roadmap fits well with the IOHK development roadmap for the introduction of complete smart contract functions in the chain (mid to end of the first quarter of 2021).

In addition to Liqwid, IOHK named Maybe Workshop – a project-based learning resource – as another candidate for Project Catalyst on Tuesday. The best ideas selected by members of the Cardano community will receive ADA worth up to $ 250,000 to further develop their projects.

According to IOHK, millions of dollars worth of ADA will be released in 2021 as part of future funding rounds – “from content to community resources, dapps to defi”.