The Collateral Decreasing Loans (CDL) dApp is an innovative, fully decentralized lending application that helps users get more funds for less collateral over time.
The main features are:
Borrow all sorts of tokens by using any of them as collateral with a fixed interest rate.
Earn a stable Annual Percentage Yield (APY) by locking tokens as liquidity for loan borrowers.
Choose how much you pay in lending fees. The sooner you choose to repay your loan, the less fees you'll pay in total.
Build your Crypto Score to be able to permanently borrow more tokens with the same collateral or borrow with no collateral at all.
Most decentralized lending applications use what's known as the crypto loan, a system based on lending tokens while locking some equivalent value in other tokens. The main issue with this is the fact that users have to always stake some other token with the equivalent value, a disadvantage compared to traditional loans where borrowers get funds without having to lock any funds.
Some alternative solutions have been created recently where users can borrow funds with no collateral by using an approval system. This works by checking the account history of the potential borrower and deciding whether or not he will be able to repay it at a later date. The main issue here is the fact that borrowers depend on others to approve their loans, making it less decentralized.
With the innovative Crypto Score system, users are able to borrow funds with no collateral and no approvals required, a superior solution to existing lending dApps for the next generation of DeFi loans.
Continue reading the next sections to learn more about each feature of the CDL Loans dApp and how you can benefit either as a liquidity provider or as a borrower.