Optim + FluidTokens Borrow Protocol - OADA Lend/Borrow Market

[GENERAL] Name and surname of main applicant

Ethan Protas

[GENERAL] Are you delivering this project as an individual or as an entity (whether formally incorporated or not)

Entity (Incorporated)

[GENERAL] Please specify how many months you expect your project to last (from 2-12 months)

6

[GENERAL] Please indicate if your proposal has been auto-translated into English from another language

No

[GENERAL] Summarize your solution to the problem (200-character limit including spaces)

Develop the OADA Borrow Protocol to enable seamless OADA lending and borrowing against diverse collateral, enhancing capital efficiency and liquidity within Cardano DeFi.

[GENERAL] Does your project have any dependencies on other organizations, technical or otherwise?

Yes

[GENERAL] If YES, please describe what the dependency is and why you believe it is essential for your project’s delivery. If NO, please write “No dependencies.”

No Dependancies

[GENERAL] Will your project’s output/s be fully open source?

No

[GENERAL] Please provide here more information on the open source status of your project outputs

N/A

[METADATA] Horizons

DeFi

[SOLUTION] Please describe your proposed solution

We propose the development of the OADA Borrow Protocol, a standalone lend/borrow solution integrated with the OADA system. This protocol enables users to borrow OADA against various forms of collateral, with the OADA system providing the liquidity rather than individual users. By acting as the sole lender, OADA Borrow enhances the utility of OADA within the ecosystem, allowing for leverage and offering diverse collateral options. Flexible collateral options include Minswap LP tokens and possible future DEX LP tokens depending on liquidity and reliability as well as Liqwid’s qADA. 

The protocol features fault-tolerant oracle integrations, robust liquidation risk management, and dynamic collateral assessment parameters, all designed in a modular and extensible manner. This ensures high capital efficiency and precision, surpassing larger, monolithic lending architectures. By leveraging FluidTokens' established DeFi services, deep experience in the Cardano DeFi space, and new set of lending contracts, OADA Borrow can seamlessly integrate with existing infrastructures, unlocking new liquidity pools and optimizing asset utilization. The system's modular design facilitates easy upgrades and future integrations, ensuring scalability and adaptability to evolving market conditions.

Comprehensive security audits and continuous monitoring will safeguard the platform's integrity and resilience against potential vulnerabilities. Additionally, a user-friendly interface will provide transparent visibility into lending positions, collateral status, and yield earnings, enhancing user experience and fostering trust within the community. Overall, the OADA Borrow Protocol will optimize capital deployment, enhance liquidity, and meet the growing demand for OADA borrowing, significantly boosting the efficiency and scalability of the Cardano DeFi ecosystem.

[IMPACT] Please define the positive impact your project will have on the wider Cardano community

OADA, the first of the OToken assets, has seen significant adoption in the short few months since launch with over 24 Million OADA in circulation. This unique product has contributed signifigantly to Cardano DeFi TVL and on-chain activity, giving an option for passive ADA yield that is competitive with ETH staking rates. With OADA Borrow the impact will grow larger and continue to scale.

OADA Borrow will substantially enhance capital efficiency within the Cardano DeFi ecosystem by enabling seamless lending and borrowing of OADA assets. By integrating OADA with FluidTokens' leading DeFi protocols, we will unlock new liquidity pools and optimize asset utilization, thereby increasing overall liquidity and enhancing the ecosystem's robustness. This integration provides users with expanded options for asset management and yield generation, significantly improving their experience and engagement.

Furthermore, the OADA Borrow Protocol fosters innovation by supporting the development of advanced financial products and services. This encourages the creation of sophisticated DeFi instruments tailored to diverse user needs, driving continuous innovation within the Cardano ecosystem. By offering diverse collateral options and leveraging FluidTokens' P2P Lending and Liquidity Pools, our solution attracts a broader base of users and developers, accelerating the growth and adoption of Cardano DeFi.

Ultimately, this project strengthens the entire Cardano ecosystem by enhancing liquidity, improving user satisfaction, promoting innovation, and driving widespread ecosystem growth and adoption. The OADA Borrow Protocol not only addresses current gaps but also lays the groundwork for future advancements, positioning Cardano as a leading platform for decentralized finance.

[CAPABILITY & FEASIBILITY] What is your capability to deliver your project with high levels of trust and accountability? How do you intend to validate if your approach is feasible?

Optim Finance boasts a proven track record of delivering innovative DeFi solutions on the Cardano blockchain. Our Liquidity Bonds dApp has safely managed over 150 million ADA, reaching Top 5 TVL on Cardano. Our new product, OADA, is approaching 25M ADA TVL in the 3 months since launch. Our team comprises seasoned experts from prominent organizations in the ecosystem such as Minswap, MLabs, and IOHK, underscoring our deep expertise and comprehensive understanding of Cardano's unique capabilities.

To ensure the feasibility and reliability of our project, we implement a multi-faceted validation approach:

1. Rigorous Testing: We will conduct extensive testing on Cardano testnets to identify and rectify any issues before mainnet deployment. This ensures the robustness and reliability of our smart contracts and integrations, mitigating potential risks.
2. Security Audits: Engaging reputable third-party firms, we will perform thorough security audits of all smart contracts and integrations. This proactive measure guarantees the highest standards of security, minimizing vulnerabilities and ensuring user asset protection.
3. Partner Collaborations: By working closely with FluidTokens, we ensure seamless and secure integrations. Leveraging their established infrastructures enhances the overall reliability and functionality of our lending module, fostering a cohesive DeFi ecosystem.
4. Community Feedback: Actively incorporating feedback from the Cardano community, we will refine and improve our solution. This iterative process fosters transparency, trust, and alignment with the community's needs and expectations, ensuring that our protocol meets user demands effectively.

Our comprehensive approach, combining proven expertise, strategic partnerships, rigorous testing, and community engagement, positions Optim Finance to deliver this project with exceptional trust and accountability. By adhering to these validation strategies, we ensure that our solution is not only feasible but also robust, secure, and highly beneficial to the Cardano DeFi ecosystem.

[PROJECT MILESTONES] What are the key milestones you need to achieve in order to complete your project successfully?

Design Specification and Verification: Develop a comprehensive design specification for the OADA Borrow Protocol. Collaborate with FluidTokens to verify system integrations, ensuring compatibility for liquidations, yield passing, and robust risk management.

• Milestone Output:
• Detailed Design Specification Document
• Verified Integration Plans with FluidTokens

Development of Smart Contracts: Build the modular smart contracts necessary for integrating with and building on top of FluidTokens codebase. Incorporate oracle integrations, liquidation mechanisms, collateral assessment, and other risk management parameters.

• Milestone Output:
• Completed Smart Contracts Codebase

User Interface Development: Develop a user-friendly front-end interface that allows users to effortlessly lend and borrow OADA assets. Ensure the interface is intuitive, responsive, and aligns with user experience best practices.

• Milestone Output:
• User Interface Mockups and Design Files
• User Feedback and Iterations on Figma
• Begin front-end codebase work

Documentation and Community Education: Create comprehensive documentation, including user guides and educational materials. Engage with the community to educate users about the new lending module through video tutorials and guide articles.

• Milestone Output:
• Published Documentation on Gitbook
• Instructional Video and Tutorial Article

Security Audit: Engage a reputable third-party security firm to perform a comprehensive audit of all smart contracts and integrations. Implement any recommended security enhancements to ensure the robustness and safety of the lending module.

• Milestone Output:
• Detailed Security Audit Reports
• Implemented Security Recommendations

Mainnet Deployment and Integration: Deploy the finalized lending module on the Cardano mainnet. Complete the integration with FluidTokens, making the solution available to users for live transactions.

• Milestone Output:
• Live Deployment on Cardano Mainnet with integrated front-end
• Integrated Lending Module with FluidTokens 
• Official Launch Announcement and Promotions

[RESOURCES] Who is in the project team and what are their roles?

• Ethan Protas - Product Lead
• Maksymilian Brodowicz / Zygomeb - Tech Lead

Our team members have extensive experience working with Cardano and have contributed to projects like Minswap, MLabs, and IOHK. We have a clear track record of successfully delivering high-quality DeFi protocols to mainnet that are widely adopted.

Website: https://www.optim.finance/

[BUDGET & COSTS] Please provide a cost breakdown of the proposed work and resources

Design and Specification (50,000 ADA): A robust design phase is crucial for laying the foundation of the project. This ensures that all system components are well-defined, integrations with FluidTokensis are seamless, and risk management protocols are effectively incorporated. Investing in detailed specifications minimizes the risk of costly revisions during development and deployment.

Smart Contract Development (150,000 ADA): Developing secure and efficient smart contracts is the backbone of the lending module. This includes writing, testing, and deploying contracts that are extensions of and modifications to the FluidTokens contracts which handle lending, borrowing, liquidation, and yield management. The significant investment reflects the complexity and importance of ensuring these contracts are reliable and secure.

Oracle Integration and Risk Management (100,000 ADA): Accurate and timely data from oracles is essential for the proper functioning of the lending platform. Integrating robust oracle services and developing comprehensive risk management systems ensures that the platform can handle market fluctuations, collateral valuations, and potential liquidation events effectively, safeguarding user assets and maintaining system integrity.

User Interface Development (75,000 ADA): A user-friendly interface enhances user experience, making it easier for users to interact with the lending module. This includes designing, developing, and iterating on the front-end application based on user feedback. A well-designed UI is essential for user adoption and satisfaction.

Testing and Audits (75,000 ADA): Rigorous testing and independent security audits are vital to ensure the platform's reliability and security. This investment covers comprehensive testing phases and engaging third-party auditors to validate the smart contracts and integrations, ensuring that the platform is secure against vulnerabilities and ready for mainnet deployment.

Documentation and Educational Content (25,000 ADA): Clear and comprehensive documentation is necessary for users and developers to understand and effectively use the lending module. Educational content helps in onboarding new users and promoting the platform within the Cardano community, fostering wider adoption and engagement.

Total Budget: 475,000 ADA

[VALUE FOR MONEY] How does the cost of the project represent value for money for the Cardano ecosystem?

The proposed budget of 500,000 ADA is strategically allocated to ensure the successful development, deployment, and adoption of the OADA Borrow Protocol. Each budget category is meticulously planned to deliver maximum value to the Cardano ecosystem:

1. High-Quality Deliverables: Investing adequately in design, development, and security ensures that the lending module is robust, secure, and user-friendly, reducing the need for costly fixes post-deployment.
2. Enhanced Ecosystem Integration: Seamless integration with top DeFi protocols like Liqwid and LenFi enhances the overall DeFi infrastructure on Cardano, promoting interoperability and capital efficiency.
3. Risk Mitigation: Comprehensive risk management systems protect user assets and maintain system integrity, fostering trust and reliability within the ecosystem.
4. User Adoption and Growth: A well-designed user interface and thorough educational materials lower the barriers to entry, attracting more users and developers to the Cardano DeFi ecosystem, thereby driving growth and liquidity.
5. Security and Trust: Third-party audits and rigorous testing build confidence among users and investors, positioning Cardano as a secure and reliable platform for DeFi activities.
6. Sustainable Development: Detailed documentation and ongoing community education ensure that the platform remains maintainable and adaptable, supporting long-term sustainability and continuous improvement.

In summary, the investment ensures that the OADA Borrow Protocol not only meets the immediate needs of the Cardano DeFi ecosystem but also lays the groundwork for future innovations and sustained growth. The strategic allocation of resources maximizes the project's impact, driving significant value for the entire Cardano community.