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ADA · 6w

Liqwid is Integrating Chainlink Feeds Into Its Lending and Borrowing Protocol on Cardano

Our team is thrilled to announce that the Liqwid lending and borrowing protocol is integrating Chainlink Price Feeds on Cardano to help secure borrow limits, collateral values, and liquidations. Liqwid will utilize the ADA/USD Chainlink Price Feed during core protocol functions such as initiating loans, updating collateral asset value, and triggering liquidations of undercollateralized positions. Integrating Chainlink’s industry-leading oracle solution will help ensure that the price data referenced within Liqwid markets is accurate and tamper-proof, protecting users against price manipulation attacks and other outlier shocks.

Liqwid is a decentralized lending protocol on Cardano that allows users to securely earn interest on deposits and borrow assets with ease while earning yield on ADA from multiple revenue streams. Users can collateralize their supplied assets to initiate a loan in any asset supplied to the Liqwid protocol. Assets have varying maximum loan-to-value ratios termed collateral factors (e.g. 80 for ADA), and borrowers must ensure they remain under the collateral factor or their funds will be liquidated to protect the solvency of the protocol. In tandem with a user’s initial collateral, loans are secured by depositors in liquidation pools who supply assets to repay undercollateralized loans in exchange for seized collateral at a discount.

Efficient liquidation mechanisms are critical functionality for any DeFi lending protocol, especially during adverse market conditions. If the price of the liquidated collateral asset drops too fast, the debt may not get offset, and the protocol is at risk of becoming undercollateralized. The liquidation pool ensures that the assets borrowed from the protocol always remain fully backed by serving as the primary liquidity source for repaying debt from liquidated borrowers. If the liquidation pool for an asset is empty or is less than the total amount to be repaid, the protocol uses a secondary liquid...

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