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Setting up

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Wallet Setup

To interact with Lendex, users must first have the following wallets set up:

  1. EVM-Compatible Wallet: An EVM wallet, such as MetaMask, is required to manage assets and interact with the Ethereum blockchain. Users can download and install MetaMask as a browser extension. Once installed, they can create or import an existing wallet to connect it with Lendex.

  2. Cardano Wallet: A compatible Cardano wallet is necessary for interacting with the Cardano blockchain. Users can choose from supported Cardano wallets, such as Nami or Eternl. After setting up the wallet, users should connect it to Lendex to manage their Cardano-based assets seamlessly.

Both wallets are essential for participating in the cross-chain functionality of Lendex, enabling users to lend, borrow, and manage assets across Ethereum and Cardano blockchains.

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Supported Assets

At present, Lendex allows users to participate in lending and borrowing activities using Ethereum NFT as collateral. These NFTs, which are unique digital assets on the Ethereum blockchain, can be used to secure loans. Borrowers can request ADA (Cardano’s native currency) in exchange for using their NFTs as collateral.

Key points:

  • Collateral Type: ERC721 NFTs from the Ethereum blockchain are the only supported collateral at this time.
  • Loan Currency: Borrowers request ADA as the loan currency, which they receive upon the approval of their loan requests.
  • Cross-Chain Interaction: This functionality highlights the cross-chain capability of Lendex, enabling users to use Ethereum-based NFTs to access liquidity in ADA from the Cardano blockchain.

Important: Additional assets and blockchains will be supported in future releases to expand the range of available collateral and loan types.

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How It Works

Lendex is a decentralized lending protocol that allows users on the Ethereum blockchain (EVM) to borrow ADA using their NFTs as collateral. The flow of the lending process is as follows:

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Borrow Token

  • An user with NFT who wishes to borrow ADA sets their desired borrow amount, deadline, and repayment terms (APY). They then send their NFT to Lendex smart contract while waiting for a Cardano lender to accept the offer.

  • If no lenders accept the deal, the borrower can choose to remove their offer. This action effectively returns the NFT to the original NFT smart contract, reinstating the borrower as the owner.

  • If a Cardano user decides to accept the deal, they mint a token on the Lendex Cardano blockchain. This token serves as proof for the Chainlink Oracle, confirming that the lender has accepted the agreement and paid the requested amount to the borrower. Chainlink Oracle will verify that the token has been minted on Cardano, ensuring it meets the borrower’s specified requirements (e.g., amount, fee, deadline). At this point, the borrower cannot withdraw their NFT until the debt is paid.

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Pay Token Debt

  • To repay the debt, the borrower submits a transaction on Cardano with a payment for the ADA owed (including fees) to the lender and a request to burn the NFT in the Cardano blockchain. The Cardano smart contract will only allow the NFT to be burned if the transaction includes the payment to the lender.

  • After the transaction, the Chainlink Oracle checks that the token has been burned. If the verification is successful, it updates the NFT status in the Lendex EVM contract.

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Claim Token

  • If the borrower has paid he can retrieve their NFT from Lendex EVM Contract.

  • In the event of a default (where the debt remains unpaid), and the expiry time specified in the offer has passed, the lender (Cardano user) can claim the NFT for themselves. The NFT will be sent to their EVM wallet (e.g MetaMask).