Weft Finance is a decentralized lending and borrowing platform built on Radix. At the heart of Weft lies the creation and management of collateralized debt positions (CDPs) represented by NFTs, known as ‘Wefties.’
History
Weft was founded by two Ivory Coast engineers, Yetinin Coulibaly and Atoumbré Kouassi. Living in different continents, with Coulibaly in Paris and Kouassi in Abidjan, they came together with a shared vision for financial innovation and economic development in Africa. Their collaboration began in 2021 when both became active members of the Radix Community. Despite having never met, the two engineers discovered a shared vision for the future and a strong alignment in values.
After meeting in person in Abidjan in fall 2022, they decided to form a partnership and build their first decentralized application (dApp) for lending and borrowing financial services. This led to the creation of Weft, aiming to harness the transformative potential of RadixDLT for the future of DeFi.
The platform is now developed by a team of seven individuals, collectively known as Weft'ers.
https://youtu.be/gqTfrAfqK98?si=qiLmG6PsH0v2AGw9
Features
Weft offers several key features to facilitate lending and borrowing of digital assets:
- Lending Pools: Weft utilizes lending pools that hold assets deposited by lenders. Each pool is designated for a specific asset type. Lenders receive deposit units representing their share of the pool.
- Loan Units: Borrowed amounts are tracked using loan units, which reflect a borrower's share of debt obligation. Interest accrual is handled through the loan unit system.
- Interest Rate Strategies: Interest rates are set dynamically based on lending pool usage through predefined interest rate strategies. This allows rates to adapt to market conditions.
- Borrowing Power Delegation: Users can delegate their borrowing power by minting a linked "delegated Weftie" NFT and sending it to another user. The recipient can then borrow without needing collateral.
- Liquidations: Loans with insufficient collateral can be liquidated by external entities or automatically. This sells collateral to repay loans and brings loan-to-value ratios back into a healthy range.
- User Positions Operations: Weft supports position modifications like collateral swaps and direct loan repayment using collateral ("self-liquidation").
The system is designed to be flexible, secure, and capture the nuances of each loan through use of the non-fungible Wefties.
Components
Weft Finance relies on several key components to enable its lending and borrowing functionality:
Lending Pools
- Hold assets deposited by lenders and act as reserves for borrowers
- Each pool is for a specific asset type (e.g. $XRD)
- Mint deposit units to track lenders' shares
- Manage accrued interest on loans
- Provide flash loans
Lending Market
- Acts as the interface between lenders/borrowers and lending pools