Meld launches decentralized lending on Cardano for the unbanked (2023)

Dean Takahashi@deantak

Meld launches decentralized lending on Cardano for the unbanked (1)

Meld is a interesting new way to borrow money through the blockchain.

Image Credit: Meld

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Decentralized businesses built around the blockchain are multiplying, and Meld is unveiling a cryptocurrency borrowing and lending protocol based on the Cardano blockchain today. It raised money through an initial stake pool offering, or ISPO.

If you’re not sure what that means, then sit back while we attempt to explain.

One of the things Meld does is let people use cryptocurrency as collateral for getting loans in fiat (traditional currency such as U.S. dollars). Singapore-based Meld has raised $45 million via the ISPO as well as a separate private token sale. It has created a non-custodial, decentralized lending and borrowing protocol that is aimed at leveling the playing field between financial haves and have-nots.

More than two billion people in the world don’t have bank accounts or are so poor they don’t need them. Meld aims to help them by providing a range of financial tools and solutions built around leveraging cryptocurrency assets as collateral for fiat or crypto-based loans, said Ken Olling, CEO of Meld, in an interview with VentureBeat.

“We are excited to offer billions of people a new way to access powerful financial instruments, products and services — but even better and more innovative thanks to the power of the Meld protocol,” said Olling. “Offering a way to stake cryptocurrency as collateral against a fiat loan is powerful for so many reasons — not the least of which is sheltering highly-volatile cryptocurrencies from a forced sell during a market bottoming out. We are very excited to provide unique financial products and services to our customers in the months to come as Meld tokens become widely-shared across different exchanges.”


Meld launches decentralized lending on Cardano for the unbanked (2)

Meld set this fundraising up over a period of months and worked on creating a community of supporters. It already claims close to have about 40,000 token holders for its $MELD tokens.

Olling started Meld in late 2020, and the company launched its ISPO, a new kind of crowdfunding, on July 1, 2021. It completed the process in December.

(Video) Project Interview: Meld - DeFi on Cardano

Meld was the first company ever to carry out an ISPO. Token holders staked more than 620 million ADA, the tokens for the Cardano blockchain, which was the equivalent of around $1 billion. That helped the company raise $10 million for its own funding round. Meld raised another $35 million through an additional private token sale.

“We wanted to create as fair a way of raising our money as we could,” Olling said. “We saw that the typical way of raising money was heavily skewed towards institutional investors, aka normal people are not allowed to participate.”

He said they realized that the Cardano blockchain could enable something novel.

“So we could build these stake pools to allow people to stake the way they would normally in a layer one blockchain,” Olling said. “And instead of getting the staking rewards, which is what you would normally get, they would get the Meld token. In exchange, we would keep the rewards. And that would be our formal way of fundraising. And then when the fundraising was complete, we could airdrop tokens, based on a mathematical equation on the amount of tokens that people had staked.”

Built on Cardano

Meld launches decentralized lending on Cardano for the unbanked (3)

Cardano is a third-generation cryptocurrency, which tries to improve on second-generation cryptocurrencies such as Ethereum and first-generation cryptocurrencies like Bitcoin. A decentralized cryptocurrency keeps track of all transactions by all addresses on a peer-to-peer shared record. One of Cardano’s innovations is the ability to support high-transaction capacities, fast transaction times, and low transaction fees, through a system of proof-of-stake.

Cardano is not minable. The blockchain is a record of all transactions, but rather than validation by anyone who performs the proof-of-work, transactions are validated by consensus proof-of-stake. This is also far more environmentally friendly than mining other cryptocurrencies, as they are not using enormous amounts of electricity.

“We wanted to build a lending and borrowing protocol on the Cardano blockchain,” Olling said. “The reason why we chose the Cardano blockchain was that it was new and had around $40 billion in market cap was not doing anything. And so we wanted to have a first-mover advantage in that space. And also, because it had such low transaction fees. That allowed us to have very high capital efficiency, which meant that we could then offer these services to people outside of the wealthiest nations.”

He added, “So spending 30 to $50 on gas fees, is not realistic if you live in Nigeria, or live in Brazil. So that’s kind of the context for it.”

Blockchain-based cryptocurrencies like Cardano work by grouping transactions together in data blocks and then linking the blocks cryptographically. The chain of blocks is stored across a decentralized network of stakeholder nodes, and distributed as peer-to-peer shared files. Quantities of Cardano are stored at addresses, cryptographic sequences are paired with a private key used to spend the amount at the address. The user’s wallet keeps track of all their Cardano addresses and adds up the balance.

“In the case of Cardano, you do a soft link of the asset from your wallet to the stake pool,” said Olling. “So you’re pledging or you’re voting with your tokens. Your tokens always stay or your coins always stay in your wallet, but they’re locked up and they can’t be used for anything else. So it’s a much safer way of going about it.”

He added, “In our case, we did it for five months. And what that means is you build a community. So people come on slowly, but surely over the period of time. If they believe in you, if they vet you, if they see how the community is, and they want to stick around, they can. So it means that you’re building a community. And it also means that that community is constantly vetting you for a long period of time. So 40,000 people that have been involved in the project for five months.”

(Video) Meld Is Coming To Cardano To Solve This Crypto Problem (Lending & Borrowing)

Cardano was created by Charles Hoskinson as an attempt to technically improve Bitcoin and Ethereum, increasing the amount of transactions that can be processed, by replacing computationally-expensive proof-of-work with a proof-of-stake. Cardano borrows the blockchain concept from Bitcoin, and the smart contract concept from Ethereum. Cardano is maintained by the IOHK (Input Output Hong Kong), and the software is open-source, so anyone can improve it.

Cardano is used for anything money is used for — buying, selling, donations and a whole lot more. However, Cardano can also be used for even more things than fiat currency, including a means of accepting donations or facilitating commerce that cannot be shut down by governments or the banking system.

Decentralized loans

Meld launches decentralized lending on Cardano for the unbanked (4)

Meld represents the first decentralized protocol that incorporates fiat (like U.S. dollars) loan capabilities into the cryptocurrency ecosystem. Meld enables low-friction transactions between crypto and fiat positions while maintaining control of a customer’s owned digital assets.

Meld believes that its crypto-backed fiat loans will be more useful than just taking out a cash microloan. It offers a different type of utility because users are able to deposit cryptocurrency, which is locked in the account, and then borrow value against that locked collateral. The use will be determined by the individual.

The Meld token can be staked on the Meldapp to provide insurance for the Meld protocol. In doing so, Meld stakers will earn a yield through protocol fees and liquidity reward programs (up to 15% currently). The Meld protocol was created to bind the on-chain (crypto) and the off-chain (fiat) worlds together, as well as uniting the many blockchains and DeFi (decentralized finance) protocols.

Meld has two locked staking options. One is a six-month lock and the other is 12 months. They are earning a 12% annual percentage rate and a 15% annual percentage rate, respectively.

Meld was designed as a DeFi protocol, powered by the Cardano blockchain and smart contracts to ensure transparency and fairness for all parties (including both the minting and distribution of tokens). The Meld token is used for governance of the protocol, and users can stake it to earn yield.

Meld capitalizes on Cardano’s transaction efficiency compared to older blockchains, which drastically reduces fees by more than 99% compared to Ethereum-based solutions. That means the computing costs and environmental costs are lower, resulting in lower fees.

The service is expected to be appealing in the European Union and countries such as El Salvador and Nigeria, where cryptocurrency is either already fiat currency or is in mainstream usage. Meld said that countries that adopt crypto as their main currency would be in a tremendously advantageous position, as they can seamlessly leverage their value and earn an interest return for providing it as lending liquidity.

The African mobile provider Tingo is working with Meld on our effort towards seamless mobile app integration as well as Polygon, and Vent Finance with ADAmatic, a bridge that will connect the Polygon blockchain to the Cardano blockchain.

Genius Loans

Meld launches decentralized lending on Cardano for the unbanked (5)

Meld tokens will be available for purchase from crypto exchanges such as Bitrue and FMFW beginning today. Currently the Meldapp is being utilized with the Nami wallet. To reduce the environmental effect of the blockchain computing, Meld has donated 87,500 ADA towards planting trees.

(Video) Meld Launch Coming | Cardano Defi Banking | Meld Price Prediction | CMattDye

Meld will provide new financial services never offered by traditional banks, including not only standard cryptocurrency-backed loans, but also the company’s unique Genius Loans. With a Genius Loan, the customer collateralizes their cryptocurrency and takes out a loan with a slightly-higher interest rate. The customer is only required to service the interest on the loan, while the yield generated from the crypto collateral pays down the principal.

Since Nigeria has had big currency fluctuations, people have had to hedge their positions in cryptocurrency. But because they are hoping the value will go up, they don’t want to touch that crypto. So they have to let it sit in the account and appreciate. With Genius Loans, they can get access to money.

Tingo has preloaded mobile phones with the Meld application on them. People can take their cryptocurrency, lock it up in a non-custodial manner, and then borrow fiat against that. So someone who makes $800 a month can take out a loan.

“We’re not putting anybody into debt,” said Olling. “We don’t believe that putting people into debt is a good way of getting them out of poverty. We’re trying to make it so that they make the best decisions, to invest in assets that are going to benefit them in the long run. And they can get some of the value from those assets now, and then be able to pay that back and keep their long positions.”

He added, “We wanted to try and do something a bit fairer, along the same lines, as we did with the ISPO, and so we came up with this idea of a Genius Loan. In a Genius Loan someone locks up their crypto into a smart contract, and they can borrow fiat. That crypto is then used as collateral in the DeFy space and generates a yield. And part of that yield is used to pay the principal on the loan. So it’s a self-paying loan. The customer has to pay the interest, which is tax deductible, but they don’t have to pay the principal. So depending on market conditions, the loan will pay itself off between three and six years.”

And he said, “For the unbanked, these Genius Loans let you take out a loan, and, except for the interest, it just pays itself back. That’s fantastic for people who are poor, or don’t even have a bank account to borrow against.”

Meld also offers a Crypto-Backed Credit Line (CBCL), which provides a flexible tool for managing fiat cash requirements while only being exposed to interest on the amount of fiat used. The CBCL works in conjunction with the Meld debit card where users can spend with their Meld Card both at point-of-sale and online.

The CBCL works similar to a fiat loan, where cryptocurrency is collateralized in a smart contract and 50% of the collateral value can be used as a line of credit. Margin calls and liquidation events work the same in the line of credit product as they do in the Meld Loan.

Users interact with the Meldapp via iOS, Android or in the browser to access their digital assets to lend, borrow and manage the services offered by Meld. Customers keep the keys to their assets at all times for security. Other crypto-to-fiat loan options are centralized and require the user to give up their private keys, Meld said.

Finally, Meld also enables so-called “Melded assets,” where anyone can bring in tokens from other blockchains such as BTC, ETH and BNB directly into the third-generation Cardano smart contract enabled blockchain. This not only increases crypto liquidity, it also allows people to stay long in their crypto of choice instead of forcing them to use only Cardano’s ADA tokens. Meld also benefits from the performance and user transparency of Cardano.

The Meld Foundation in Switzerland controls the protocol, and the development company Meld Labs is based in Singapore. Meld Labs has 45 people. Meld is still trying to get licenses required by regulators in the U.S. and Europe.

(Video) MELD Token - More DEFI to Grow the Cardano ADA Ecosystem!!! Borrow Cash With Crypto Through MELD!

“What we’re doing now is we’re building the protocol,” Olling said. The protocol will be built over the summer, and we’re most likely going to launch it sometime at the end of this year. We’re doing something that no one has ever done before it which is lending and borrowing to both crypto to crypto, as well as crypto to fiat, in a decentralized manner. We have a lot of regulatory hurdles that we have to go through in order to be able to achieve the goal.”

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(Video) Meld Finance | DeFi Banking On Cardano


How much is a Cardano Meld worth? ›

The price of 1 MELD currently costs $0.0186.

Is Meld a Decentralised exchange on Cardano Blockchain? ›

Meld was designed as a DeFi protocol, powered by the Cardano blockchain and smart contracts to ensure transparency and fairness for all parties (including both the minting and distribution of tokens). The Meld token is used for governance of the protocol, and users can stake it to earn yield.

What will the meld token be used for? ›

MELD is the first DeFi, non-custodial, banking protocol. You can securely lend & borrow both crypto and fiat currencies with ease and stake your MELD tokens for APY.

How do I buy meld Cardano? ›

How to Buy MELD (MELD) Guide
  1. Download a Nami Wallet. ...
  2. Set up your Nami. ...
  3. Buy Cardano as Your Base Currency. ...
  4. Send Cardano From Binance to Your Crypto Wallet. ...
  5. Choose a Decentralized Exchange (DEX) ...
  6. Connect Your Wallet. ...
  7. Trade Your Cardano With the Coin You Want to Get. ...
  8. If MELD Doesn't Appear, Find its Smart Contract.

How many ADA Cardano are left? ›

Cardano has a total limited supply of 45 billion tokens, and there is nearly 34 billion in circulation. That means there's around 11 billion ADA tokens left in the market.

What exchanges will meld be on? ›

  • Bitrue. Advanced Exchange Platform.
  • FMFW. A Deep Liquidity Exchange Trusted by Financial Institutions.
  • MEXC. Retail & Institutional Multi-Exchange Trading Platform.
  • HitBTC. A Mature & Extensive Crypto Trading Exchange.
  • Changelly PRO. Custodial Full-Featured Exchange Platform.

Where is meld token listed? ›

Go to CoinMarketCap and search for MELD. Tap on the button labeled “Market” near the price chart. In this view, you will see a complete list of places you can purchase MELD as well as the currencies you can use to obtain it. Under “Pairs” you'll see the shorthand for MELD, MELD, plus a second currency.

Can you buy meld crypto? ›

You can buy MELD on cryptocurrency exchanges like Bitrue. MELD is traded on 1 exchanges. Currently, the most popular exchange for MELD is Bitrue.

How much will Meld crypto be worth? ›

MELD (MELD) Price Prediction. According to our current MELD price prediction, the value of MELD is predicted to rise by 3.37% and reach $ 0.020131 by February 13, 2023. According to our technical indicators, the current sentiment is Bearish while the Fear & Greed Index is showing 58 (Greed).

Is meld a Cardano token? ›

Meld is a popular non-custodial platform for lending and borrowing tokens. It's built on the Cardano blockchain, and you can borrow fiat against your crypto.

How do I participate in meld? ›

MELD Participation Options via Vent Launchpad

For ADA holders to participate in MELD's Private Sale Offering, they MUST hold VENT tokens along with their ADA tokens to measure which tier they fit in. Any ADA holders who are not holding VENT tokens, will NOT be eligible for the MELD sale.

What wallets support Meld? ›

To use the MELDapp, and gain access to MELD staking, you need to be using a Nami wallet.

How many meld tokens does ADA have? ›

If you stake your ADA in the MELD ISP for 32 Epochs, you will receive 2.08 MELD per 1 ADA.

What is the interest rate on Meld? ›

Second, you can stake MELD and earn 4% APY rewards.

Does Cardano still have a future? ›

Cardano has proven to be one of the most active and busiest digital assets in the crypto world in the past year. With that in mind, it's wise to say that ADA is one investment option worth considering. Many experts predict Cardano to have a bright future in 2023.

What's the lowest Cardano will go? ›

The price of Cardano is predicted to reach [a] minimum level of $3.42 in 2025.

What is the highest ADA coin can go? ›

According to Changelly, the minimum ADA price is predicted to fall to $1.87 in 2025, while its maximum price will be $2.19. The cost of trading will typically be $1.93. Cardano is forecasted by Finder's team of fintech experts to soar to $2.93 by 2025.

Can you still stake Meld? ›

You can securely lend & borrow both crypto and fiat currencies with ease and stake your MELD tokens on the MELDapp for APY. Staking your MELD tokens is a great way to earn some extra APY while helping the MELD protocol. With staking, you can easily add your MELD tokens to a pool of other tokens, and earn rewards.

Is meld decentralized? ›

In one sentence, MELD is a decentralized non-custodial banking protocol. MELD was started in April of 2021, and its development is done by MELD Labs, based in Singapore. The governance is done by MELD Foundation based in Switzerland. They oversee, for example, all of MELD's fiat bank accounts.

Does Cardano have a decentralized exchange? ›

Prominent Cardano-based decentralized exchange (DEX) SundaeSwap has floated its first on-chain governance proposal, developers said Tuesday.

What is meld blockchain? ›

MELD is a decentralized and trustless lending protocol built on the Cardano Blockchain using smart contracts and governed by the MELD token. It provides a fast, safe, and transparent set of tools for anyone to lend and borrow crypto and fiat currencies.

What tokens are on the Cardano blockchain? ›

ADA is the in-house token of the Cardano blockchain that resides on the Cardano Settlement Layer. The maximum supply of the ADA cryptocurrency is limited to 45 billion tokens, to be released over time through minting. The hard limit on the total token supply guarantees a deflationary attribute to ADA.

What is the future price of MELD? ›

MELD (MELD) Price Prediction. According to our current MELD price prediction, the value of MELD is predicted to drop by -16.70% and reach $ 0.020435 by January 30, 2023. According to our technical indicators, the current sentiment is Neutral while the Fear & Greed Index is showing 51 (Neutral).

Does meld have a token? ›

MELD is the first decentralized and non-custodial DeFi banking protocol for lending & borrowing fiat & cryptocurrency. The MELD token is a governance token enabling holders to vote on the development of the protocol.

Is Cardano 100% decentralized? ›

Like Bitcoin and Ethereum, Cardano is decentralized. One can send ADA to anyone, anywhere in the world without being dependent on a central third party. Cardano is an open protocol. Anyone can help secure the network, complete transactions or create decentralized applications stored in Cardano's blockchain.

What is the best Cardano decentralized exchange? ›

MinSwap is the largest decentralized exchange (DEX) in the Cardano ecosystem. The platform supports six of the leading Cardano wallets. Users can exchange dozens of cryptocurrencies built on the Cardano blockchain, and the platform has its MIN token.

Is Cardano more decentralized than Solana? ›

But BitBoy added that this also indicates that the Cardano blockchain is also one of the most decentralized blockchain networks in the market. The report from CCRI notes that the Solana blockchain consumes about 0.17 Wh per transaction. This is the lowest among all the PoS blockchain networks on the list.

How can I participate in MELD Ido? ›

To participate in the MELD ISPO, investors need to delegate their ADA to the MELD staking pool, and 100% of the ADA rewards go toward supporting the MELD project. The investors, on the other hand, receive MELD tokens during the launch.

What are the new Cardano native tokens? ›

Native tokens is a new feature that enables the transacting of multi-assets on Cardano. Users can transact with ada, and an unlimited number of user-defined (custom) tokens natively.

Is Solana better than Cardano? ›

If you're an investor who values a peer-reviewed, scientific process before implementing new technology, Cardano may be a better fit for your portfolio. If transaction speed is the name of the game, Solana might be the better choice.

Does Cardano have a future? ›

Many experts predict Cardano to have a bright future in 2023. With continued developments taking place within the Cardano ecosystem and in the crypto asset market as a whole, we may see Cardano potentially reaching a new high. The estimated price of Cardano (ADA) January 2023, according to experts, is USD2. 33.


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