Lendfinity : Building a Decentralized Lending Protocol

DeFi moves fast, and Lendfinity keeps you one step ahead. The project started as a simple hackathon idea and has grown into something much bigger—providing a unique, efficient way to lend and borrow digital assets on the Internet Computer (ICP) and Bitfinity networks. 

Lendfinity is one of the fastest-rising protocols in the ICP and Bitfinity ecosystems. It was built to meet the growing demand for onchain lending products within the ecosystems.

But who are those behind this protocol and what do their stories sound like? This short blog will give you insight into Lendfinity; its missions, current state, and future plans. 

In a recent interview with Gastão Faria. the CEO of Lendfinity, we got a deeper look into the story behind the platform and what they’re aiming to achieve. The insights are fascinating, especially for those who want to understand what it takes to build and scale a DeFi project from scratch.

Exploring Lendfinity: From Hackathon to Startup

A good number of hackathons exist for developers to have fun while building, and not necessarily to make a startup from their products.

But the story was a bit different for the Lendfinity team; they had a product idea in mind, and the Portugal ICP hackathon was for them to do two things:

• Build the MVP
• Get product validation

Initially, the team wanted to build an MVP for algorithmic stablecoin. However, they had to pivot into a lending protocol instead because of uniqueness and market demand. After several nights of hacking—planning product, coding, and fixing bugs—the team built out the MVP like gold refined with fire. Fortunately, they won!

“Winning the hackathon was a key validation, and when we learned about Bitfinity, the ICP EVM chain, it became clear that launching on that platform was a perfect fit for our vision.” –Gastão

Winning the hackathon was the validation the team needed to further lock-in and polish up the product.

For the hackathon judges to see the viability of the product and also appreciate its technical underpinnings, then there is a future for what we have as Lendfinity today.

Bringing Greater Innovation to the DeFi Landscape

Lendfinity isn't just another lending protocol; it's trying to be something different. By focusing on ICP and Bitfinity networks, Lendfinity taps into a growing ecosystem that’s still relatively new in the DeFi world. 

The platform aims to provide users with access to unique assets like ICP’s ICRC-1 and ICRC-2 tokens, expanding options that most other protocols don't yet support.

Security-wise, Lendfinity leans on Aave’s battle-tested smart contracts, ensuring the safety of users’ funds. This approach offers peace of mind in a space where exploits are all too common. With partnerships and strategic alliances already forming, Lendfinity seems to be building a solid foundation for long-term growth. 

What really stands out, though, is Lendfinity’s ambition. Their plan to introduce Bitcoin runes as reserves is intriguing and could help them differentiate themselves further from other lending protocols. 

Focusing on a smaller, emerging ecosystem like ICP means they’re well-positioned to capture a growing market rather than trying to compete in an already saturated space.

In addition, what sets Lendfinity apart is its unique asset pool and strategic focus. It aims to deliver a familiar DeFi experience but with a distinct advantage: offering assets that no other lending protocols currently support.  

Its initial focus is on ICP’s ICRC-1 and ICRC-2 tokens, which positions us to capture the growing ICP ecosystem.  But in the future, we plan to include Bitcoin runes as tradable reserves, further diversifying our offering.

The Journey to Building a Battle-tested Lending Protocol

Notably, there have been many hacks worth millions of dollars in 2024, and this made security more important than ever before. Web3 is at the stage where users will only put their funds in protocols they can trust, and trust is cemented with battle-tested security.

As a protocol that seeks to exist and serve the needs of customers long-term, Lendfinity was security-minded as early as possible. Apart from following development and security best practices, they made a major protocol decision to leverage Aave, a legendary Web3 lending protocol now known as Sky.

Since Aave has been battle-tested over the years, there are greater chances of safety to build on it, which Lendfinity did. 

To ensure scalability and reliability, we decided to follow Aave’s proven and robust model.  Since its release in early 2022, it has maintained a flawless security record, which is a testament to its reliability.

Partnering with Bitfinity and ICP for a Boisterous Ecosystem

Since the team started as an ICP Hub hackathon project, they have been in constant sync with the core team for technical support in their journey of building a scalable lending protocol.

In addition, the team is one of the earliest on Bitfinity, and we have done all within our best to empower and support the Lendfinity team.

Based on these relationships, the Lendfinity team is in talks with other protocols in both ecosystems for co-marketing initiatives. Speaking of partnerships, Gastão mentioned, 

“Since day one, we’ve been collaborating closely with the ICP Hub in Lisbon, our partner from the hackathon days.  We also have solid partnerships with Bitfinity, being early developers on their chain, as well as with Omnity and Chapswap, key players in the Bitfinity ecosystem.”

Concluding Remarks: A Future in DeFi on Bitfinity and ICP

DeFi on ICP is still in its early stages, but the potential for growth is huge. Lendfinity is one of the projects laying the groundwork for what could become a major player in the DeFi world.

With a clear vision and a strong technical foundation, Lendfinity is positioning itself to be a significant part of the future of decentralized finance. If you’re interested in DeFi and want to explore new opportunities, Lendfinity is worth keeping an eye on. They’ve shown that a simple idea, backed by solid execution, can evolve into something much more—something that might just shape the future of DeFi on ICP and beyond.

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