Everything You Should Know Before Creating A DeFi Lending Platform

DeFi Lending platform

You’ve heard of the blockchain, and you’ve heard of cryptocurrencies like Bitcoin, Ethereum, and Litecoin. But what you may not know is that there are specific protocols created specifically to facilitate lending on the blockchain.

With DeFi (short for decentralized finance), users can easily develop their own lending systems and tokens to create an entirely new business mode. Also, this DeFi lending platform development can offer lower fees, faster transfers, and an increased sense of security than traditional banking institutions can offer.

In this part of the article, we will explore how to create a DeFi lending platform from a technical point of view. So, keep reading.

Lending & Borrowing Apps In Decentralized Market

DeFi lending solutions are one of the top decentralized apps. For example, Total Dollar Value Locked (TVL) at 80 billion dollars doesn’t sound too bad, does it? To think about that second spot – it’s kind of obvious. When did so many of us end up in crypto? That has to be through cryptocurrency exchanges since they’re easier to onboard and have a nice UI.

It follows that the next big thing would be saved just like in traditional finance, right? Once people started trading in cryptos, they realized how risky investing can be. And nothing worse for them than sitting on crypto leftovers when it’s idle in wallets for years or months on end.

It might sleep even less than money does – cryptos are constantly awake making more profits before we know it! Giving out loans/borrowing tokens has proved profitable enough due to cryptocurrency volatility especially if someone was exposed longer.

Top lending markets use Compound, Aave, and Anchor. If you want to create such a platform, you should connect with an experienced p2p crypto exchange development company with relevant expertise.

A Quick Guide To Create DeFi Lending Platform

Discovery Phase

The Discovery phase is an important part of creating a DeFi application because it allows you to build the business logic of your project. In order to do everything right from a technical point, developers need to build a lending platform architecture that meets their business goals and those of end-users.

This data will form the basis for choosing the right technology stack and building the correct architecture for the product. As statistics show, skipping this step can lead to overestimating costs or underdelivering features needed by users.

 It can result in risking future growth due to dissatisfaction with what was provided originally.

User Experience/User Interface Design

The weakest point of many Decentralized Finance apps is the User Experience and User Interface design. Regardless of how complex the logic of your lending app may be, it should always look simple to users.

You need to collaborate with experienced UX/UI designers in order to tailor your requirements into a streamlined and easy-to-use UI. We advise choosing companies that have an in-house Design Department.

Here are several benefits: First, designing and developing your platform within a single company will save you time and money. Second! when working together under one roof – these experts can quickly solve any issues or meet deadlines set by clients.

Lastly, these teams can also work seamlessly together because they share goals. User experience is the most essential part of P2P lending applications and enterprise Blockchain development success.

DeFi Lending Protocol Development

We have already discussed that in order to create a blockchain-based lending platform, it is necessary to put all the logic of the platform’s operation into smart contracts. Smart contracts are self-executing contracts that are triggered automatically as soon as all the conditions set out in them are met.

Once you have agreed on the requirements for the project, the calculation method for interest rates, type of credit pool, investment reward mechanics, etc. All these features need to be coded via code.

Testing And Launching

DeFi is a transparent and open system that imposes additional security requirements. When testing your lending app, you need to make sure not only that the system is working as intended, but also that it is free of vulnerabilities. And the main task here is to audit smart contracts.

You shouldn’t have any unnecessary issues with assets locked into smart contracts and other problems – which can happen if there are flaws or oversights in their design. It would be too easy for a hacker to exploit these when they come up.

Just remember that ensuring full coverage for all unit tests will provide protection against hacking attempts from outside sources – since this provides another check on code integrity.

Wrapping Up

Undoubtedly, creating a DeFi lending platform is a complex job that requires in-depth market research and planning. If you want to create such a platform, you should hire Blockchain developers in India with relevant experience in digital finance and cryptocurrency development.


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