Optim OADA 'ADA-Lend' Module – ADA Lending to Top Cardano DeFi Money Markets

[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 a modular extension integrating OADA and OUSD system lending to top Cardano DeFi protocols (Liqwid+LenFi, etc.), enabling autonomous interactions and efficient capital utilization.

[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.”

Optim OADA Lending relies on strategic integrations with key DeFi protocols to ensure robust functionality, security, and efficiency. The primary dependencies are as follows:

Liqwid - Cardano’s leading non-custodial liquidity protocol for lending and borrowing native assets - must remain operational and add lending markets. Integrating with Liqwid enables us to utilize their established smart contract infrastructure for overcollateralized loans, ensuring secure and efficient lending operations. This integration allows OADA and OUSD to tap into Liqwid’s liquidity pools, enhancing the availability and stability of OToken assets for borrowers and lenders alike.

LenFi - a decentralized non-custodial lending and borrowing platform built on Cardano, offering peer-to-peer and pool-based lending solutions - must remain operational. By integrating with LenFi, our lending module gains access to additional liquidity channels and diverse borrowing options. This ensures greater flexibility and scalability for OADA and OUSD users, allowing for a more comprehensive lending ecosystem that can cater to varied user needs and risk profiles.

[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

We plan to make the core components open source after a two-year period under a Business Source License, promoting ecosystem growth while allowing us to maintain initial control over the project's direction.

[METADATA] Horizons

Lending

[SOLUTION] Please describe your proposed solution

We propose developing an Algorithmic Market Operations (AMO) extension for the OADA and OUSD systems to enable seamless OToken lending across leading Cardano DeFi protocols, Liqwid and LenFi. This extension will integrate modular smart contracts that autonomously interact with these protocols, incorporating reliable oracle integrations for accurate price feeds and robust risk management mechanisms.

The AMO extension will feature automated collateral assessment and liquidation processes, ensuring optimal capital utilization and minimizing risk exposure. By leveraging Liqwid’s liquidity pools and LenFi’s decentralized lending infrastructure, the extension enhances liquidity and provides diverse borrowing options for OToken holders.

Additionally, the solution includes a user-friendly interface that offers transparent visibility into lending positions, collateral status, and yield earnings, thereby improving user experience and fostering trust. Comprehensive security audits and continuous monitoring will ensure the platform's integrity and resilience against potential vulnerabilities.

Overall, the Optim OADA Lending AMO extension will optimize capital deployment, enhance liquidity, and meet the growing demand for OToken borrowing, thereby 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.

Our modular system addition solution will significantly enhance capital efficiency within the Cardano DeFi ecosystem by enabling seamless lending and borrowing of OToken assets. By integrating OADA and OUSD with leading DeFi protocols such as Liqwid and LenFi, we will unlock new liquidity pools and optimize asset utilization, thereby increasing overall liquidity within the ecosystem. This integration provides users with expanded options for asset management and yield generation, significantly improving their experience and engagement.

Additionally, by fostering the development of advanced financial products and services, our solution will drive innovation, encouraging the creation of sophisticated DeFi instruments that can cater to diverse user needs. This, in turn, will attract a broader base of users and developers, accelerating the growth and adoption of Cardano DeFi. Ultimately, our project will strengthen the entire Cardano ecosystem by enhancing liquidity, improving user satisfaction, promoting innovation, and driving widespread ecosystem growth and adoption.

[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 nearly 175 million ADA, securing a position among the Top 10 TVL protocols on Cardano. Our OADA product has managed over 24 million ADA since launch. Our team comprises seasoned experts from prominent organizations 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, ensuring the robustness and reliability of our smart contracts and integrations.
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 and minimizes potential vulnerabilities.
3. Partner Collaborations: By working closely with Liqwid and LenFi, we ensure seamless and secure integrations. These collaborations leverage their established infrastructures, enhancing the overall reliability and functionality of our lending module.
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.

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 lending module. Collaborate with partners to verify system integrations. Set and validate system parameters ensuring compatibility for liquidations, yield passing, and robust risk management.

• Milestone Output:
• Detailed Design Specification Document

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

• Milestone Output:
• Completed Smart Contracts Codebase
• Codebase walkthrough video explainer

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

• Milestone Output:
• User Interface Mockups and Design Files in Figma
• Initial front-end codebase link in Github
• User Testing Feedback on Figma and Planned Iterations

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.

• Milestone Output:
• Published Documentation on Gitbook
• Instructional Videos and Tutorial Articles

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 Liqwid and LenFi platforms, making the solution available to users for live transactions.

• Milestone Output:
• Live Deployment on Cardano Mainnet with working front-end
• Integrated Lending Module with either Liqwid and/or LenFi
• Official Launch Announcement and Promotional Campaign

[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 Liqwid and LenFi 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 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 (75,000 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 (100,000 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?

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

The proposed budget is strategically allocated to ensure the successful development, deployment, and adoption of the Optim OADA Lending module. Here's how each budget category contributes to delivering exceptional value:

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.

This project addresses critical gaps in the Cardano DeFi ecosystem by enhancing capital efficiency and expanding lending options. The integration of OToken lending across major protocols will attract more users and capital, fostering ecosystem growth. Our team's proven ability to deliver high-quality solutions ensures that the funds will be utilized effectively.

The long-term benefits of increased liquidity, user engagement, and innovation far outweigh the initial investment, representing excellent value for the Cardano community. The Optim OADA Lending module not only meets the immediate needs of the Cardano DeFi ecosystem but also lays the groundwork for future innovations and sustained growth. This strategic allocation of resources maximizes the project's impact, driving significant value for the entire Cardano community.