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Frequently Asked Questions
- Strategizing the target audience, their requirements, pain points, and expectations from a lending platform.
- Focusing on appealing yet user-friendly UI/UX is a must to ensure a robust user journey.
- Development lifecycle and thorough testing for flawless outputs backed by agile methodology.
- Deployment of the DeFi lending application.
- Ongoing maintenance and upgradation to stay ahead of the market race.
The entire financial world revolves around borrowing and lending money and surprisingly, the system doesn’t have sufficient actual cash for repaying it all. However, dealing with financial institutions, banks, and other intermediaries comes with a lot of hassle and is not an option for modern customers and bankers anymore.
Decentralized Finance (DeFi) is the game changer here. How? Let’s dive deeper!
What is Decentralized Finance?
Primarily developed on an improved version of blockchain technology, derived through Bitcoin, decentralized finance development is advanced for processing financial transactions automatically with smart contracts operating at the core. Operating without any intermediary or central administration, DeFi ensures an open-source, transparent, and permissionless ecosystem where users get control over their digital assets through decentralized and P2P applications irrespective of their location and other parameters.
Surprisingly, as of January 2023, the DeFi user count globally crossed 6,000,000 which is a considerable jump as compared to the previous years. Such rapid elevation has brought DeFi lending into the spotlight lately.
What is DeFi Lending?
DeFi lending provides crypto loans over a decentralized platform in a completely trustless manner. Having no central authority or third-party involvement, DeFi lending platform development enables users in enlisting their crypto coins over the platform for lending activities. Crypto lending platforms ensure improved access, efficiency, and transparency, unlike centralized financial institutions. Unlike the traditional system, lenders/borrowers no longer have to submit their personal information, go through KYC, or any other formality.
Dive deeper into getting started with DeFi lending in this blog.
Best DeFi Lending Platforms
AAVE
Earlier referred to as ETHLend, the concept of AAVE was envisioned by Stanley Kulechov and got rebranded as AAVE in 2020 with the motive of connecting borrowers and lenders with loan requests that match. As flash loans were introduced, Aave gained the spotlight and turned out to be the best DeFi lending platform of 2023.
What makes Aave popular? / Features that make Aave popular
- Aave lets its users fix the interest rate instead of keeping a varying one while adding another dimension to the DeFi lending software development space.
- Aave comes with its own token with a 1:1 ratio token from the Aave liquidity pool, further producing yields whenever sufficient deposits are made on a derivative token.
- Flash loans make Aave stand unique from other crypto lending platforms. Smart contracts are utilized for executing a loan that users need to pay back instantly.
- Aave protocol is completely secure, audited, and open-source which makes it accessible to everyone to directly interact with smart contracts, user interface clients, etc. This is another prominent reason market leaders these days prefer Aave to develop DeFi lending software.
Maker DAO
Headquartered in Santa Cruz, California, Maker DAO was established in the year 2014 by Rune Christensen. Having over 2.3 million Ethereum in its protocol, Maker DAO turns out to be the longest-running platform on the Ethereum blockchain. Maker DAO brings stability to the crypto ecosystem. MakerDAO has numerous advantages that make it an ideal choice to develop DeFi lending platform:
- Unlike other stablecoins that are centralized, Maker DAO is completely decentralized where new DAIs are produced via user-generated collateralized debt positions (CDPs). Users can lock-in Ethereum in smart contract pools while building CDPs with no point of failure.
- Maker DAO stable coins are built through collateralized debt positions and there can’t be a hole in the entire DAI funding circulation.
- Maker DAO overcomes the Bitcoin manipulation problem as all DAIs produced get recorded on the blockchain and are executed depending on the instructions put on the smart contract.
These highlights make Maker DAO a great alternative to develop DeFi lending solutions for modern business needs.
Sturdy
Sturdy is one of the unique and best DeFi lending platforms that offer high yield earning and interest-free borrowing. Instead of borrowers being charged with interest, Sturdy helps in staking the borrower’s collateral and further passing the yield to lenders. Leveraging such an approach makes Sturdy first of its kind positive-sum lending protocol and ideal for DeFi lending software development.
- With Sturdy, there is no interest or any other fees, users only need to pay gas.
Users can borrow stablecoins against their Curve LP tokens for multiplying their yields. - Users get to experience interest-free borrowing.
- Total value locked in Sturdy is $20M.
- Users can earn high APYs for stablecoins.
Compound
It is an Ethereum money market protocol that enables lenders to offer loans while borrowers get access to take out loans. Compound is ideal for crypto investors and accompanies numerous opportunities for lending and borrowing digital assets. It can be considered as a set of smart contracts built over Ethereum with open accessibility. Now, let’s explore what makes Compound perfect for DeFi lending platform development.
- Backed by COMP tokens, Compound allows the tokenization of assets locked in the system.
- No lockdown period, users have the liberty to repay and withdraw their collateral whenever they wish to.
- Users can instantly earn compound interests as they supply assets to the Compound’s liquidity pool.
Alchemix
Alchemix is a future-yield-powered synthetic asset platform that offers users advances in yield farming through synthetic tokens while representing a fungible claim. Alchemix coin is responsible for building yield-backed synthetic tokens and the prerequisite for developing these tokens is that the existing token like ERC20 should have a yield-generating mechanism on the chain.
Major highlights that make Alchemix an ideal choice for developing DeFi lending software include:
- Alchemix transforms and boosts the power of decentralized finance development while offering highly flexible instant loans.
- For getting a loan, the borrower needs to deposit collateral in a smart contract and Alchemix protocol further automatically deposits that collateral into another platform for generating yield.
- The collateral further produces its yield for paying the primary loan.
All the above listed are the major lending platforms that have gained popularity and wide adoption across the globe. These platforms are here to stay and become mainstream this year and beyond.
Wrapping Up
If you are planning to develop a similar lending software and experience complete decentralization, Antier is the one-stop place for all your DeFi needs backed by years of experience and proficiency in the DeFi ecosystem. Partner with the award-winning DeFi Development Company now and navigate the next.
