Inspiration
The inspiration for KL Protocol came from the growing interest in decentralized finance (DeFi) and the desire to create a lending protocol on Radix DLT. Radix DLT is a platform for building decentralized applications, and it provides a highly scalable and secure environment for financial applications. The aim was to create a lending protocol that is decentralized, efficient, and Delegated Debt Position.
What it does
KL Protocol is a decentralized lending protocol that allows borrowers to obtain loans using their digital assets as collateral. The protocol has three main components:
Lending pools: These pools manage lending markets for specific assets. Each lending pool contains a vault that holds lenders' assets and tracks loans made to borrowers. Lending pools are instantiated with a price oracle component and an interest factory that allow for flexible dynamic interest rates.
Collateral Debt Position (CDP) Non-Fungible Token (NFT): This is an NFT that tracks the collateral, debt, and overall health of the loan. CDPs are used to secure loans and ensure that the lender is fully collateralized.
Lending Market: This component is the main interface for borrowers, where they can interact with lending pools to obtain loans. Lenders can also interact with lending pools to earn a yield on their assets. The lending market manages CDP NFTs and the liquidation feature, which ensures that loans are always collateralized and the lender's investment is protected.
How we built it
KL Protocol was built using Scrypto, a Rust-based framework for building blockchain applications. We also used various JavaScript technologies and frameworks such as Node.js and Svelte for web development.
Challenges we ran into
The primary challenge we faced was learning Rust, as we had no prior experience with the language. Additionally, web development posed some challenges as we were more comfortable with desktop and mobile development. Despite these challenges, we were able to overcome them and create a working lending protocol.
Accomplishments that we're proud of
We are proud of the innovative interest rate mechanics that we developed for KL Protocol. Specifically, we introduced a concept of loan share to avoid running through all the debt positions to update accrued interest. This innovation allowed us to create a more efficient and scalable lending protocol.
What we learned
Throughout the development process, we learned more about Rust and web development. Additionally, we discovered how powerful Radix DLT is for building financial systems. We also gained valuable experience in developing decentralized applications and working with blockchain technology.
What's next for KL Protocol
We envision being part of the second cohort of the Radix grant program , continuing to improve KL Protocol and hopfully go main stream one day. Additionally, we plan to integrate KL Protocol with other early stage DeFi protocols and platforms like DEXs and Oracles to help create a more solid ecosystem for decentralized finance on Radix.
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