An antifragile financial engine powered by a Multi Fungible Token \ 4-token model for the most sustainable, efficient distribution of risk on the blockchain.
I am thrilled to share that V2 of the Lendroid protocol is ready for release. Close to Feb 14, 2020, we will launch a controlled version of the protocol on mainnet. A thorough smart contract audit by Quantstamp is under way and once complete, the protocol will be fully live.
What is V2 of Lendroid?
Designed to be black swan resistant, the Lendroid protocol is powered by a Multi Fungible Token 4-token model for the most sustainable, efficient distribution of risk in the DeFi space. While we believe that the use cases of this protocol are practically unlimited, we have begun by building a strong alternative to crypto lending as it exists today.
V2 represents modularised, or compartmentalised Lending. The breakthrough is this – splitting interest determination and managing collateral risk into separate, independent processes. This makes lending cyclical, stable and deterministic. Here’s a snapshot of the three big problems it solves right away –
- The cost of a loan – Today, the cost of a loan depends on the loan currency. But that doesn’t reflect the real risk of the loan, which is the volatile price of the collateral. On V2, higher the risk of insolvency, higher the cost of the loan. Loans are priced based on collateral risk, not loan currency. For instance, loans against DGX cost less than loans against ETH, which cost less than Loans against TRX.
- Loan maintenance – Everywhere else, loans are cyclical. In crypto, they’re perpetual. As a lender, you don’t really know how risky your loan is. And as a borrower, you’re on call 24/7. If your collateral value falls when you’re not looking, it is simply liquidated. On V2, you get a blockchain loan that’s cyclical. You can set a reminder on your calendar to service the loan, and quit worrying until then. Not only can you let the loan sit until expiry, you can even extend the loan when you come back.
- Decisioning – What if we want to allow a new kind of collateral or a choice of collateral ratios? Who decides? We could centralise it; makes it easy but not quite right. Or try an evolving system of governance, which doesn’t work yet. On V2, we leave it to the market instead. Allow anyone to set up a pool and craft loan packages. This marks a switch from governance-driven to market-driven decisioning.
Under the hood
V2 contains some of our biggest breakthroughs in designing a decentralised, fair, secure and scalable financial system. It also vindicates some of our early decisions.
Shift to Vyper: The smart contracts of Lendroid V2 are all written in Vyper. We took a conscious decision to shift to Vyper early last year to create more elegant, secure smart contracts. As one of the earliest projects to shift to Vyper, we have had an interesting journey and a collaborative relationship with the Vyper team as well as Quantstamp. This is new territory for all of us.
Inventing Multi Fungible Token: MFTs are the true breakthrough at the core of the protocol. These tokens combine the convenient fungibility of an ERC20 and the specificity of an NFT. They infuse flexibility into DeFi and open up opportunities to create a range of financial instruments. The first MFTs are the SUFI tokens on the Lendroid protocol. Subsequent blogs will talk about MFTs in much greater detail.
Resources: Our website underwent a revamp to reflect V2 better. You can access the protocol via the website. You can check out all our developer documentation here. We are working on an off-white paper, which we will release soon. Do also follow us on twitter or join our Telegram group for updates.
On a personal note…
Why Deleuze? There’s a philosophy at the heart of this protocol – an understanding that when you begin with an aspiration to reach somewhere, you recognize the transits in the middle, planned and unplanned, as things that augment your journey, not as burdensome wastes of time. This is inspired by the works of Deleuze, a French philosopher. We have named V2 of our protocol after him to, if anything, remember that how we got here was not in a straight line, and where we go from here won’t be either.
Six months in the making. Or 25 years. Take your pick. This version of the Lendroid protocol represents not just a breakthrough in the DeFi space, but also the culmination of a lifetime of experiences both within and outside the world of finance. We thank you for your support and faith in us and look forward to nurturing this new financial ecosystem with you.