On Wednesday (August 31), Cardano-powered crypto lending startup Aada Finance announced that it is launching the Aada Finance V1 lending and borrowing protocol on the Cardano mainnet on September 13.

The team’s press release, which was published on Cointelegraph earlier today, went on to say:

After months of public testnet, Aada Finance is finally ready to deploy its eagerly anticipated app. The release brings lending and borrowing to Cardano, introducing decentralized finance (DeFi) primitives to the network for the first time. The event marks a significant milestone in the blockchain’s development, which will surely benefit the entire ecosystem.

Aada Finance plans to launch in anticipation of the Vasil hard fork, which will update the Cardano network. The team aims to leverage the first-mover advantage thanks to its V1 protocol’s peer-to-peer approach. While it provides a straightforward and efficient solution, the smart contract concept will mitigate future risks associated with hard fork migration.

Here is an overview of how Aada Finance works:

Aada V.1 app is a peer-to-peer lending and borrowing protocol on the Cardano blockchain. It brings a financial lending and borrowing activity to the blockchain. Users can submit loan request and lend assets in an order book style. Borrowers can place inquiries by setting custom parameters, like asset type, amount, collateral, term and interest. In turn, lenders can choose whether to fill orders and liquidate them if needed. Aada V.2 version will include pooled lending mechanism…

This method of lending turns off the role of middleman. But not completely. Borrower sets up the loan request, and there he controls all the data within the loan. Collateral is being locked into a smart contract. The lender has to agree with the loan request that has been set and sends loan to the borrower via Aada’s set up tx…

Borrower and Lender receive B and L tokens . These tokens are the only proof of loan, they are not attached to a wallet, meaning that they can be transferable or tradable. Beauty of these Aada NFT Bonds comes with its utility. The ones who owe Lender’s Bond, can redeem loan and interest after loan expires. With the Borrower’s Bond, you have to return the loan, pay interest and then you will receive collateral back.