Loda Using Chainlink to Secure its Off-Chain Crypto-Backed Fiat Lending Product
We are excited to announce that Loda is embarking on an ambitious move that redefines the relationship between Decentralized Finance (DeFi) and custodial platforms. For those new, Loda is a lending platform that allows users, starting in Australia, to obtain fiat loans using their crypto-assets as collateral. Our first product is a custodial solution making use of Chainlink Price Feeds, which is particularly exciting given it shows how ce/defi products can also benefit from Chainlink oracles.
To support Loda’s crypto-backed fiat loans, we have integrated the industry-leading Chainlink Price Feeds—open-source, decentralized data feeds that secure a large portion of the DeFi market by supplying high-quality and up-to-date information on blockchains regarding the prices of various crypto-assets, FX rates, and other asset types. Loda references Chainlink Price Feeds and uses them in our custodial solution to determine users’ borrowing rates and monitor loan collateralization. Through this integration, our loan issuance and liquidation processes are outsourced to a fully transparent and tamper-proof price feed solution, establishing verifiable assurances that users are getting fair market prices within our collateralized lending products.
Loda works by allowing users to deposit their crypto and open an instant credit line with a credit limit determined by the value of the deposit. Once the process is complete, cash or stablecoins are deposited in the user’s nominated bank account, where they are free to start using it in everyday life. Loda supports today’s top cryptocurrencies as collateral, including BTC, ETH, USDT, USDC, and more.
We believe digital assets have enormous potential to reshape the existing financial system and create a more democratized and transparent economy. Allowing crypto-asset holders instant access to more traditional forms of credit is a fundamental building block to transitioning to this new decentralized financial economy, which Loda is delighted to help pioneer.
The use of Chainlink Price Feeds empowers us to merge DeFi and CeFi by combining the surety and security of our custodial solution with an on-chain decentralized technology like Chainlink. The result is Loda establishing higher transparency and manipulation resistance guarantees around the price data determining key processes while still retaining strong data quality and availability guarantees. By using decentralized infrastructure to support our traditional financial processes, we are able to offer an intuitive user experience yet give our users enhanced insight and auditability into our process.
Such a hybrid solution could only be possible with mature decentralized technology like Chainlink Price Feeds, which offer several attractive features that outweigh centralized alternatives.
- High-Quality Data — Chainlink Price Feeds source data from numerous premium data aggregators, leading to price data that’s aggregated from hundreds of exchanges, weighted by volume, and cleaned from outliers and suspicious volumes. Chainlink’s data aggregation model generates accurate global market prices that are resistant to API/exchange downtime, flash crash outliers, and data manipulation attacks.
- Low Deviation Updates — Chainlink Price Feeds can perform low deviation price updates at minimal costs, resulting in precise price data that consistently reflects current market conditions.
- Robust Infrastructure — Chainlink Price Feeds utilize decentralized networks of professional node operators run by leading blockchain DevOps teams and traditional enterprises with a strong track record of uptime during market volatility.
- Transparent Monitoring — Chainlink provides a robust reputation framework and set of on-chain monitoring tools that allow users to independently verify the historical and real-time performance of price feeds.
“We’re excited to strengthen the infrastructure of our lending product via Chainlink, creating newfound transparency and manipulation resistance guarantees for our custodial lending product without sacrificing on data quality,” stated Dion Dalton-Bridges, Founder, and CEO of Loda.
Chainlink Price Feeds have a strong track record of reliability, along with a robust aggregation methodology, ensuing lending processes are in constant alignment with global market prices.“
This integration marks the starting point for further collaboration between Loda and Chainlink Labs, with additional initiatives already being explored such as the use of Chainlink in our upcoming uncollateralized lending product (Loda V2). Stay tuned for more details in the coming weeks and months!
Chainlink is the industry standard oracle network for powering hybrid smart contracts. Chainlink Decentralized Oracle Networks provide developers with the largest collection of high-quality data sources and secure off-chain computations to expand the capabilities of smart contracts on any blockchain. Managed by a global, decentralized community, Chainlink currently secures billions of dollars in value for smart contracts across decentralized finance (DeFi), insurance, gaming, and other major industries.
Chainlink is trusted by hundreds of organizations, from global enterprises to projects at the forefront of the blockchain economy, to deliver definitive truth via secure, reliable oracle networks. To learn more about Chainlink, visit chain.link and subscribe to the Chainlink newsletter. To understand the full vision of the Chainlink Network, read the Chainlink 2.0 whitepaper. Want to discuss an integration? Talk to an expert.
Loda is a crypto lending solution that aims to bridge the space between defi markets and traditional financial markets, focusing on both collaterized and non-collateralized crypto lending products.