Chedda Finance: Reimagining DeFi Lending in a Multi-chain World
Billions of dollars in value is locked out of DeFi lending and borrowing as most tokens are sidelined by existing lending platforms.
Imagine a world where DeFi lending is not limited by the chains you use or the tokens you hold. Welcome to Chedda Finance, where we’re redefining the landscape.
The current state of affairs
The first generation of DeFi lending dApps like AAVE and Compound were built for users to lend and borrow against their major crypto holdings on Ethereum.
Since then, we’ve seen a proliferation in tokens and networks.
Meet Wojak, a typical DeFi user with diverse tokens across Ethereum, Optimism, and Base networks. Despite holding a wealth of assets, Wojak can only utilize a small fraction of them for lending and borrowing as most of his token holdings are not supported by the existing platforms. He also has to switch between multiple chains to use the same dApps on different networks.
Like many DeFi users, Wojak needs a more versatile lending solution. One where a wider array of tokens can be supplied and used as collateral on one chain, without having to switch between multiple networks.
This is where Chedda Finance steps in.
Isolated pools, not cross collateral
A commonality in most leading lending protocols today are shared collateral lending pools where any asset can be borrowed against any other asset. This architecture makes it difficult to include tokens with different risk profiles in the pool, leaving many tokens sidelined. AAVE, for example, typically supports only one to two dozen tokens on any given chain, with most other tokens left out.
Lending pools on Chedda operate in an isolated mode, where one or more collateral tokens can be used to borrow a pool asset like ETH or USDC. This more closely mimics borrowing in the real world, where the borrower puts up specific isolated collateral for a loan.
Chedda’s isolated structure allows for greater flexibility. By grouping assets with similar risk profiles, we can support a broader range of tokens, enhancing liquidity and usability.
For example, there would be an ETH <> GameFi pool, where a basket of the leading gaming tokens on Ethereum can be used as collateral to borrow ETH.
Cross-chain, not multi-chain
DeFi users typically hold tokens on multiple chains.
Existing dApps attempt to address the issue of multiple networks by deploying a version of their dApp on each new chain. You end up with an instance of a dApp running on Ethereum, another instance running on Optimism, repeating for as many chains as the dApp supports.
This not only leads to increased fragmentation of liquidity, users also have to constantly switch between different chains to use different tokens. On the technical side, redeploying an entire dApp and multiple frontends for each network is inefficient. For each new version of the dApp, smart contracts and frontends have to be deployed and configured on all supported chains.
Unlike multi-chain dApps, Chedda facilitates cross-chain token transfers with an in-built token bridge to transfer tokens on other chanis to the base chain. This approach not only reduces liquidity fragmentation but also simplifies the user experience by concentrating liquidity on a single platform.
This creates a hub where supported tokens on active chains can be bridged and used on Chedda. This means we are not limited to only tokens deployed natively on the base chain. This gives our users access to a wider array of tokens, while creating a DeFi home for many token communities, as the only place where they can all come together under one roof.
Bringing it together
DeFi doesn’t have to be boring. We are wrapping up our innovative solution in a fun to use, engaging user experience. Here’s a sneak preview of our Markets page. Spot the difference?
Base is emerging as a leading Ethereum Layer 2 network with the plan to onboard the next billion crypto users. That makes it a great choice to build the DeFi app of the future.
With Base’s scalability and Chedda’s innovative approach, we’re poised to revolutionize DeFi lending. Get ready for a seamless, engaging, and inclusive DeFi experience.
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