Please describe your proposed solution
The current landscape of Cardano staking limits users to fixed annual percentage rates (APRs), which can be suboptimal compared to the dynamic opportunities available in decentralized finance (DeFi).
Many users, especially those with smaller amounts, find it challenging to access lucrative lending opportunities or leverage their staked assets effectively. By introducing a permissionless lending mechanism, we aim to overcome these limitations and create a more engaging and profitable staking environment.
Approach:
We propose to implement a protocol that utilizes lending and staking delegation concepts to enable higher APRs without additional risks. This solution allows lenders to earn returns that exceed traditional staking rates by lending their staked assets to borrowers who need them for their pools or Initial Stake Pool Offerings (ISPOs). Our approach is designed to be transparent, secure, and user-friendly, leveraging the existing boosted stake protocol built on Plutus v2, upgrading to plutus v3
Evolution
While current boosted stake works fine for some scenarios has some limitations:
- Lenders can deposit minimum of 1000 ADA
- Borrowers can borrow from 10 lenders per transaction
This can be further improved using withdraw 0 mode with Cardano contracts, our target is to allow lenders to deposit even 200 ADA and borrowers to get liquidity from up to 50 lenders in one transcation, improving the throughput and showcasing how scalable can be Cardano