Cardano‘s Alonzo hard fork has enabled smart contract integration, so it only makes sense for the network to venture into the world of decentralized finance (DeFi). Emurgo, Cardano’s commercial arm, has officially announced the launch of Astarter, Cardano’s very own DeFi venture, to that end.
Emurgo arranged for the joint venture to be launched through a partnership with China-based technology firm BlockChain4A. Cardano will be used to build the infrastructure for DeFi services. Proponents of the collaboration hope to use Emurgo’s understanding of Cardano’s technical aspects, as well as Blockchain4A’s expertise, to develop DeFi technical infrastructure.
Cardano’s much-anticipated Alonzo hard fork earlier this week successfully integrated Plutus smart contract functionality, allowing developers to deploy a wide range of dApps on the network. In fact, it was reported that 100 smart contracts were deployed on the network within 24 hours of the HFC event. This confirmed the new upgrade’s seamless integration.
The first item on Astarter’s agenda would be to create an initial decentralized exchange offering (IDO) launchpad. This is scheduled to be released by the end of the year. Following that, a decentralized exchange on Cardano would take place.
Once this is accomplished, Astarter intends to integrate decentralized money market features such as lending and borrowing on Cardano. The goal of these features is to provide greater utility to users of Cardano’s native token, ADA. It will also provide access to financial services to people living in previously underserved areas.
EMURGO CEO Ken Kodama said in a statement announcing the collaboration,
“A broader range of services promotes financial inclusion and social cohesion, particularly in areas where traditional financial services are scarce.”
“Decentralized finance has piqued the interest of the crypto-community due to the increased transparency, security, and credibility of financial transaction processing. The value of crypto assets managed by DeFi apps has skyrocketed.”
Indeed, according to a recent BlockData report, upcoming projects in the DeFi space, as well as rising institutional and regulatory interest, point to a very bullish outlook. This could result in large sums of money being injected into DeFi.
According to a previous report, the total value locked (TVL) in smart contracts increased from $670 million to $13 billion between 2019 and 2020. Furthermore, user wallets grew from 100,000 to 1.2 million, indicating increased user interest.
At the time of writing, more than $150 billion had been invested in DeFi applications. And, while much of this is dominated by Ethereum, the leader in smart contracts, Cardano does not want to fall behind.