We are excited to release the first details of CherryLend V2, an innovative lending solution designed to provide a smooth user experience and take full advantage of Cardano’s eUTxO model to create an unparalleled lending experience. The purpose of CherryLend V2 is to feel like pooled lending, but keep all the benefits of peered lending.
CherryLend V1 has been live for a few months, and we are happy to announce we are currently at an all time high for total value locked, active loans, and holders. Based on community feedback, the app provides a smooth user experience with a unique incentives model.
Today, we are excited to release the first details of CherryLend V2 Smart Lending.
While CherryLend V1 leveraged the security of Lenfi’s V1 smart contracts, CherryLend V2 marks a pivotal moment to carve our own path in the Cardano DeFi landscape.
CherryLend V2 is an innovative lending platform built on the Cardano blockchain, introducing an order book model for decentralized lending for the first time. This model offers a unique twist which highlights the best traits of pooled lending and peered lending, which we believe has the potential to create the best lending experience on Cardano. Here’s a simple explanation of its key features and why it stands out:
- Order Book Model: Unlike typical DeFi platforms that use liquidity pools, CherryLend V2 will use an order book model. This means lenders can place loan offers, and borrowers can take loans by either using partial offers or by putting together multiple offers. For instance, if a borrower wants to take a loan of $500, the system can fulfill this loan by partially using a $1000 offer leaving the rest available for others. Or a borrower could take a $2,000 loan for which the system puts two distinct $1,000 offers together. This offer selection is done algorithmically by the platform, so it works in a completely transparent and seamless manner for the end user. The specification for the selection algorithm will be made public once it’s completely defined.
- Flexibility in Lending and Borrowing: This fulfillment logic adds immense flexibility. Borrowers are not constrained to accept the fixed amounts of existing loan offers. They can borrow exactly what they need, making the process more efficient and tailored to individual requirements, while eliminating the need to use single UTxOs as in pooled lending, which natively generates contention.
- Efficiency and Accessibility: This lending model, utilizing multiple UTxOs, inherently mitigates transaction contention, thereby dispensing with the necessity for batchers, which are commonplace in pooled lending arrangements. Also, by being built on the Cardano blockchain, CherryLend V2 benefits from low transaction fees and high transaction speeds. This makes the lending process more accessible and cost-effective for a broader range of users.
- Innovative Approach to DeFi: The order book model applied to lending is an innovative approach in the DeFi space. It blends elements of traditional finance (like order books) with the benefits of the eUTxO model of Cardano. This offers more competitive rates with the ability for loans to be filled based on partial or multiple existing offers, and can lead to more competitive interest rates, as lenders compete to have their funds borrowed. Additionally, this should encourage increased liquidity since loans can be partially filled, making funds more readily available.
In essence, CherryLend V2’s order book lending system on Cardano is unique because it introduces a new level of flexibility and efficiency to DeFi lending and borrowing. It allows for loan fulfillment using multiple loan offers without generating contention, which is not commonly seen in traditional DeFi lending platforms, enhancing the user experience by providing more control and options to both lenders and borrowers. This Smart Lending concept should accentuate the favorable features of pooled lending and peered lending with the goal of creating the ultimate Cardano lending experience.
The launch of CherryLend V2 is tentatively planned for Summer 2024.
For more information on CherryLend:
CherryLend is an open-source and non-custodial lending protocol built on the Cardano blockchain. CherryLend strives to become a leading DeFi platform by creating a superior user experience and offering the strongest incentives.