Leveraging Cardano Assets

[IMPACT] Please describe your proposed solution.

Introduction

Pond is a trustless NFT lending protocol built on the Cardano Blockchain using smart contracts. It provides a fast, safe, and transparent set of tools for anyone to lend and borrow crypto. Pond facilitates users to lend ADA and stable coins when borrowers collateralize their cryptocurrency and NFTs in a Pond Smart Contract. The lender receives an interest rate from secure loans, whilst the borrower can maintain their crypto assets without needing to sell to retrieve liquidity.

What makes Pond so important?

The possibility to access liquidity against their NFTs without selling the asset is typically perceived as unprecedented financial flexibility by NFT holders, especially if they have a large percentage of their portfolio locked up in these illiquid assets.

A few examples of what the liquidity obtained via Pond can be used for include:

• Serving immediate liquidity needs (e.g. covering margin positions)

• Taking advantage of short-term investment opportunities (e.g. high-yield liquidity mining or NFT flips)

• Taking advantage of long-term investment opportunities (e.g. buying real estate; long-term loans will be supported in Pond V2)

• Delaying a planned sale of an NFT for more opportune marketing conditions

• Delaying a planned sale of an NFT to defer potential capital gains tax

• Financing ‘real life’ needs without having to sell valuable assets

Which blockchains does Pond support? Which cryptocurrencies does Pond support?

Pond currently only supports the Cardano blockchain. That being said, we have an ambitious multi-chain strategy and will soon launch on Ethereum blockchain, which will be the first step in that direction. This will allow users to lend Cardano native assets for Ethereum collateral. Users will be able to lend governance tokens, meme tokens, and stable coins across multiple cryptocurrencies.

How do I repay a loan and get my NFT back?

Here are a few important pointers regarding repayments:

• You can repay the loan early at any time, but you still pay the full interest amount
• You can only repay the loan from the wallet you started the loan with
• You can only repay the loan in one single repayment, i.e. not partially
• Once a loan has been defaulted on, it cannot be repaid any longer, even if the Lender has not foreclosed yet.
• Once a Lender has foreclosed the NFT of a defaulted loan, he becomes the sole owner and the loan can no longer be repaid through the Pond platform
• Make sure you have both ADA and the Currency in your wallet! You’ll use the Currency/token to repay the loan, but you still want enough ADA to be able to pay for gas. NOTE: THE Italicized section only applies for Pond version 2.

1. Connect your wallet and put the loan ID in the “pay back loan” field.
2. You can find the loan ID on Cardano scan, when you click on the transaction of your loan you can see the loan ID in your wallet transactions.
3. The contract will know what you owe, so the next step will be a pop up from your wallet which will ask you to confirm the transaction. This will then take money from your wallet and pay back the loan for you.

When I give Pond access to manage an asset in my wallet, will this apply to all my assets?

Approvals happen at the NFT contract level. This means that once you have approved or granted Pond access to manage an asset, the Pond smart contract will have access to all of your assets minted on that contract. The Pond smart contract will not have access to manage NFTs minted on other contracts though. For example, if you approve an Ape Society NFT and you have multiple apes and also a Spacebud, our smart contract will have the ability to manage all of your apes but not your Spacebud. However, it is important to remember that the only way for the contract to move the asset is for you to start a loan on the asset, this can not happen automatically.

How do I make a loan against an NFT?

Now proceed to the ‘Lend’ tab. As a Lender, you can browse all available NFT collateral and make (gas-free) loan offers by proposing a loan amount, duration and interest rate. Once you submit an offer, it will show on the asset's listing page. You can modify or cancel an offer any time before it is accepted. If your loan offer is not accepted it will expire automatically after 7 days. You can currently only make 1 offer on any given NFT at a time.

Once a Borrower accepts your loan offer, the corresponding funds will be automatically deducted from your account. From hereon, you cannot cancel the loan before it expires as a lender, however, it could be repaid early by the Borrower.

Expected APY Lending on Pond

[IMPACT] Please describe how your proposed solution will address the Challenge that you have submitted it in.

Cardano needs an ecosystem of different Dapps. Currently, too many developers are creating duplicates of dapps that already exist. Cardano needs to have unique dapps that are capable of adding to the Cardnao ecosystem. Pond is the first of its kind, and that is why is is crucial to support the development of protocols that diversify the pond ecosystem.

[IMPACT] What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?

Fork Delays are the main risk that could prevent us from delivering the project on time. This is due to the majority of the version 2 features requiring vasil hard fork updates.

Bugs are another issue that could prevent the delivery of the protocol. This is why the majority of the funds potentially acquired from Fund 9 will go to financing an audit of Lending Pond.

[FEASIBILITY] Please provide a detailed plan, including timeline and key milestones for delivering your proposal.

Vasil Fork will mark the launch of the launch of V2.

V2 will have a tweet announcing the launch

Audit will happen on 7/15/2022

Github book of all of lending pond's new features and collaborations with other projects.

[FEASIBILITY] Please provide a detailed budget breakdown.

20,000 USD -> Audit (Martify Labs)

8,000 USD -> Development Costs

2,000 USD -> Server Hosting

5000 USD -> Front end and user experience tweaks

[FEASIBILITY] Please provide details of the people who will work on the project.

Lending Pond is the first Platform on Cardano to bring a lending platform to mainnet. Lending Pond has done 2 million volume in 2 and a half months since launch. Lending Pond currently does 60k in volume daily, and has reached a all time loan amount of 30k ada. The lending pond team is experienced in capable in creating high performing dapps and apps such as dexes and marketplaces also. This is possible because of our experience in building Pond which is the biggest lending platform on Cardano till this day.

The team at lending pond is primarily made of students from Hawaii and south Africa.

Half of our team is doxxed, and our team members are close with one another and know each other in real life.

[FEASIBILITY] If you are funded, will you return to Catalyst in a later round for further funding? Please explain why / why not.

Pond will always be around! There is no quick profit, no one-off event. If we are funded the likelihood of the Pond team coming back to Project Catalyst is high. Pond will always be developing further tools to improve the DeFi capabilities of the Cardano ecosystem. If not Fund 9, Fund 10!

[FEASIBILITY] Are you or any member of your team working on any other proposals in this Fund9?

[FEASIBILITY] Are you or your team working on any other proposals from previous Funds?

[AUDITABILITY] Please describe what you will measure to track your project's progress, and how will you measure these?

• 10k Discord members
• 300k ada volume per day
• Audited
• Over 100 interactions per twitter post
• Increasing Average Loan Period
• Consistent User feedback to improve the UX

[AUDITABILITY] What does success for this project look like?

• Participants will feel that Lending Pond is a hub to do a variety of crypto based activities.
• Participants will know that Lending Pond is safe to use
• Participants will come back to Lending Pond

[AUDITABILITY] Please provide information on whether this proposal is a continuation of a previously funded project in Catalyst or an entirely new one.

This is an entirely new proposal! Lending Pond already exists, but our vision has not been achieved. Lending Pond is looking to Fund 9 to make new features possible.

Sustainable Development Goals (SDG) Rating

SDG goals:

End poverty in all its forms everywhere

Ensure healthy lives and promote well-being for all at all ages

Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation

Make cities and human settlements inclusive, safe, resilient and sustainable

SDG subgoals:

By 2030, ensure that all men and women, in particular the poor and the vulnerable, have equal rights to economic resources, as well as access to basic services, ownership and control over land and other forms of property, inheritance, natural resources, appropriate new technology and financial services, including microfinance

Achieve higher levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors

Develop quality, reliable, sustainable and resilient infrastructure, including regional and transborder infrastructure, to support economic development and human well-being, with a focus on affordable and equitable access for all

Key Performance Indicator (KPI):

Annual growth rate of real GDP per employed person

Universal Human Rights Index (UHRI):

#proposertoolsdg