Cardano (ADA) is a pioneering blockchain project that continues to push the boundaries of innovation. It has introduced a groundbreaking concept that ADA holders and enthusiasts should grasp – the platform’s potential as a yield and bond platform. This article sheds light on this new concept in an accessible manner.

Traditional funding methods for decentralized applications (dApps) involve venture capital or initial coin offerings. However, Cardano has introduced an original approach: undercollateralized loans. This method works as follows:

ISPO and dApp Funding:

Cardano’s network provides a risk-free rate of 3.2%, which is channeled towards the Initial Stake Pool Offering (ISPO) or the ongoing dApp development. This innovative approach ensures that dApps receive funding from the community itself, eliminating the need for external venture capital. This, in turn, promotes projects driven by the community.

At the conclusion of this process, Cardano gains a new dApp that’s funded by the community, maintaining its decentralized nature while excluding external venture capital influence. All participants, including stakers, benefit from the heightened chain activity.

Cardano’s Approach Highlights:

Undercollateralized Lending:

Unlike other platforms, Cardano allows lending without the requirement of excessive collateral, making it more accessible for borrowers.

NFT Bonds:

Cardano introduces the concept of NFT bonds, laying the groundwork for a potentially extensive secondary bond market.

ISPO:

The Initial Stake Pool Offering is an exclusive concept of Cardano, enabling decentralized funding for projects.

nnovatively, Cardano’s strategy for funding decentralized applications involves directing a risk-free rate of 3.2% towards ISPO or the dApp, guaranteeing that community-driven projects receive funding without relying on external venture capital. Borrowers on the platform can obtain loans by paying an amount exceeding the risk-free rate, thereby receiving tokens that might be volatile but also have the potential for significant returns.