Lendefi x Chainlink AMA RECAP
Held on March 28th, 2022
Tell us about your project guys, how does it work?
Lendefi is a leveraged trading and lending protocol. It works by giving lenders the choice to deposit into various lending pools (https://bsc.lendefi.finance/lend), and borrowers (leveraged traders) to take loans from these lending pools for the purpose of leveraged trading (https://bsc.lendefi.finance/trade).
Given the borrowers are able to take loans for more than the collateral they deposit, it gives the protocol the feature of providing undercollateralized loans, with the caveat of the protocol escrowing the funds in order to secure the lender in case the borrower is unable to meet margin requirements and a liquidation is necessary.
Tell us more, what makes your project special?
The secured undercollateralized nature of loans make the protocol unique.
For example a borrower could take a 5x long position on LINK/USDT for 5 LINK. In which case they have the choice of using LINK as the collateral itself. Hence they would take a loan for 4 LINK by borrowing 4 LINK worth of USDT from the USDT lending pool, and that would be swapped into LINK via PancakeSwap.
Their collateral (1 LINK) along with the 4 LINK (minus any fees) borrowed would be escrowed in the protocol. This demonstrates the undercollateralized nature of the protocol. However, USDT could also be used as collateral, which would still make it undercollateralized (with added complexities) but the example given demonstrates it more clearly.
The reason it is secured, is that if the loan does not meet margin requirements, then the protocol (via a liquidation call) will liquidate the position in order to secure the lender and reward the liquidator.
The Chainlink Community is excited that you are here and we would like to hear from you: how does Lendefi integrate Chainlink Price Feeds?
Lendefi Protocol has integrated Chainlink Feeds for all its price data requirements just generally and in order to mitigate against exploits such as flashloan attacks. For instance we could simply calculate the price data directly from the Pancakeswap liquidity pools, however, as witnessed in past DeFi exploits this is not the best approach. Chainlink Price Feeds are an essential component of the DeFi ecosystem and in reality many projects would not even be feasible (especially from a security perspective) without this technology available.
For instance, it is absolutely critical for a position that does not meet margin requirements be liquidated in order to secure the lender, hence a reliable on-chain price feed is necessary for this to occur efficiently and securely. Or else, the protocol could be left in a position where it did not secure the lender entirely and owes part (worse case all) of the loan to the lender which was not paid back from the borrower. However, with Chainlink Price Feeds we can very much mitigate such a scenario.
Also, note we are in the process of developing a liquidation contract that will be compatible with Keepers, which will add another layer of contingency to the current liquidation method. In this scenario there would be a deployment of the new Keepers compatible liquidator contract which will be used for Keepers called liquidations.
What is the best way for someone watching today to get started with Lendefi?
The best way to get started would be to:
1. Visit the website (https://lendefi.finance)
2. Open the App (https://bsc.lendefi.finance)
3. Familiarise yourself with the different sections of the App
4. Read the GitBook (https://lendefi.gitbook.io)
5. Have a read through any articles that are of interest to you in our Medium (https://medium.com/lendefi)
6. Join the Lendefi Telegram community (https://t.me/lendefi_io)
Regarding lenders depositing and traders borrowing on the App, care should be taken as we are still undergoing the auditing process. We have provided liquidity to take small positions (long or short) on the BTC/BUSD pair.
Let’s talk about the future, what’s next on Lendefi’s roadmap?
1. Farm, where users will be able to stake interest accumulating tokens (iTokens) which are issued to lenders as well as LDFI/BNB LP tokens (Pancakeswap) and LDFI tokens in return for rewards. It should be noted that we will be using Chainlink Keepers in order to call the Update Pool function to keep the staking contract up-to-date.
2. Affiliate Program, where users will be able to refer other users to use the protocol and being awarded commissions. This will be undertaken as an off-chain operation whereby, we will deploy the following on StackOS (decentralized cloud):
- mySQL available on Docker Hub
- Script for populating database with transactional data from the Lendefi protocol from a BSC endpoint
- Public API for querying the database
Then make queries available on-chain via Chainlink Any API. For instance a user can query on-chain (thanks to Any API) how many affiliate commissions they have earned or what is owing to them.
3. Deploy contracts that are delegated to do certain functions with the protocol such as transfer funds to referral pools. These contracts can be called periodically using Keepers in order to keep the referral pools up to date.
Leveraging Keepers for liquidations is something that seems very interesting.
I’m curious, where will the liquidation liquidity come from and the benefit head to?
Liquidation liquidity will come from Pancakeswap and benefits will be awarded to liquidators.
a) what do you see as the main new unique selling point(s) for Lendefi that make(s) it stand out from others in the otherwise rather overheated general DeFi loans area — obviously there is the rather unique undercollateralized capability that you have developed a model for?
b) most retail traders are relatively unfamiliar with (safe) leveraged trading, how can you help to educate and develop that community, without exposing them to the attendant risks?
c) how do you see the protocol developing and integrating toward mainstream adoption ?
a) Undercollateralized loans are scarce in the market, but the real USP is the upcoming features such as affiliate programs and advanced statistics dashboards amongst other future plans.
b) Through education via publishing quality content on the subject and maintaining high quality documentation in our GitBook.
c) The usage of the affiliate program will attract more users and the farm will provide incentivization to use the protocol.
1) As you told before, you have a liquidation functionality to protect users. But any plans to make TP/SL as its done on CEXes?
2) What is a practical usage (use-cases) of LDFI token itself on the platform, except staking? What are the benefits of holding LDFI?
1) Yes, we will be adding this functionality in the future including Limit Orders. We have a few technical parts to work out here. Whether to do parts of these functions off-chain or not. They can be done on-chain though. We’ll model both approaches.
2) LDFI is a governance token that will allow token holders to vote on changes to the Protocol and the introduction of features.
Trading, lending fees will be used to buy back and burn LDFI tokens
Chainlink is the industry standard for building, accessing, and selling oracle services needed to power hybrid smart contracts on any blockchain. Chainlink oracle networks provide smart contracts with a way to reliably connect to any external API and leverage secure off-chain computations for enabling feature-rich applications. Chainlink currently secures tens of billions of dollars across DeFi, insurance, gaming, and other major industries, and offers global enterprises and leading data providers a universal gateway to all blockchains.
About Lendefi Protocol
The Lendefi protocol will deliver leveraged trading and secured lending to cryptocurrency markets. Utilizing an undercollateralized loan model, Lendefi facilitates a trustless relationship between lender and borrower, managed by the protocol to remove counterparty risk. For further information please join our global Telegram group, visit our website, join our Twitter feed or inspect our GitBook documentation.
Lendefi Protocol:: https://bsc.lendefi.finance/
Protocol information https://lendefi.gitbook.io/