Introducing Ardana, Cardano’s Decentralized Stablecoin and Much More

Ardana is a new on-chain asset-backed stablecoin protocol set to revolutionise the third generation public blockchain platform, Cardano. Ardana users can mint, send, spend, and receive cryptocurrency which will be held in a compatible wallet or vault. Ardana also features Danaswap, a decentralised exchange for stablecoin and stable asset liquidity pools on Cardano.

Ardano’s Key Features

Ardana’s protocol provides for Cardano native asset stablecoin loans. The stablecoin, dUSD, is soft pegged to the value of the US dollar and is minted by a user when a loan is established via a smart contract. To qualify for a dUSD loan, the user must provide collateral in the form of an approved Cardano native asset — such as ADA — and lock this securely in a private Ardana vault. The collateral must exceed the loan amount by a factor approved by governance. As it is over-collateralized, holders can have confidence in the value of dUSD during market fluctuations. The collateral is released when the stablecoin loan is repaid.

So instead of needing to liquidate ADA to purchase other Cardano assets, ADA (or other approved assets) can be deposited into the Ardana vault to receive a proportion in return as a minted dUSD loan. This empowers the user by leveraging their existing asset.

Smart contracts are programs that are stored on a blockchain that run when predetermined conditions are met, and are primarily used to automate the execution of agreements on blockchain platforms. The smart contract saves time, conflict and provides security during the transaction and reduces surplus transaction costs. It saves time and conflict and is also cheaper, faster and a more secure way of executing a payment as compared to other traditional payment systems.

The Advantage of Storing Assets in a Vault

Vaults hold cryptocurrency just like wallets, the difference is that they stop cryptocurrency from being immediately withdrawn. Vaults offer higher security when it comes to storing crypto assets. With Ardana, the vaults are used to secure loan collateral. Assets that are approved to be lodged in the vault can then be leveraged to mint Ardana stablecoins via smart contracts. There are no limits to the number of vaults that a user may open for different Cardano native tokens.

How Danaswap Works on Ardana

An exciting feature in the Ardana ecosystem is Danaswap. It is a decentralised exchange that uses an automated market maker (AMM)for stablecoin and stable asset pools. Liquidity pools have proven to be game-changers and are a key component of decentralised finance today and they also act as the foundation for AMMs. Liquidity pools allow for trading on decentralized exchanges (DEX) and provide liquidity through a collection of funds locked in a smart contract. Danaswap’s algorithm massively reduces slippage even with six figure (or plus) trades, achieving 50–100X the capital efficiency of standard DEXs. Danaswap also lets holders earn passive income through liquidity trades.

A stable pool on DanaSwap holds different token representations of the same underlying asset, such as the US Dollar, trading at approximately the same price. Swaps and liquidity arrangements are possible with these various assets. At any time, users can elect to switch between any of the assets in the stable pool. Multiple types of tokens can be swapped in a single transaction, but this only applies to stable pools that support more than two tokens.

Ardana Rewards Enhancement Model (AREM)

AREM works to distribute a percentage of the Ardana stablecoin vaults and Danaswap platform fees to DANA token holders. Users can claim rewards by anumber of ways, by staking DANA tokens to earn exDANA, by providing liquidity, and by depositing dUSD in the Ardana Savings Module. ExDANA is made by locking a DANA token into the AREM. The longer exDANA is locked into the AREM, the greater the rewards. An AREM calculator is available to determine the amount of exDANA required to claim the best possible awards in the system.

An exciting feature is the ability for Ardana to pay out profits in ADA. The DANA token effectively becomes a yield bearing asset for holders bringing the value of an entire cornerstone ecosystem to the holders.

Decentralised Foreign Exchange

Ardana will support a wide range of currencies: for example, USD, GBP and EUR. Each of these currencies will be created as stablecoins. Currently, the most minted currency is the US dollar. This means most non-US users are minting a foreign currency. There are other currencies besides the US dollar that can be minted but these are not decentralised. Ardana seeks to remedy this by allowing users to mint stablecoins in different currencies and swap them on Danaswap.

The DANA Token and Governance

There are many interesting features built into Ardana. ADA holders can use the platform for all kinds of projects and the system is governed by its users through DANA tokens. DANA token holders enjoy voting rights and have power in influencing the direction and development of the platform. Stakers can also claim ADA tokens by engaging in different yield generating activities on the platform and have opportunities to generate passive income interest payments, trade fees and more.

Important External Players Outside Ardana

Ardana also depends on outside actors who work to maintain the operation of the protocol. These are known as: Keepers, Oracles, Emergency Oracles and DAO Teams. Keepers are self-interested individuals who help maintain stability by seeking out arbitrary opportunities.

Regarding price and emergency oracles, to guard the Ardana protocol against a majority of price oracles being attacked, the Ardana stablecoin protocol has set up a proxy oracle (Oracle Gate Module) which acts as an intermediary between itself and the other oracles. The OGM serves as the first line of defence between the oracles and the protocol which delays the price feed by one hour. Once the clock begins, the emergency oracle or the Ardana governance (those who hold DANA tokens) will cast their vote to individually freeze corrupted oracles.

DAO teams back Ardana protocol by offering services such as moderating Ardana governance forms, performing market analysis and acting as bug hunters. In the long term, these roles will migrate to the Ardana community.

The bespoke AMM coupled with the sophistication of Cardano ultimately provides Danaswap users with rapid and inexpensive transactions compared with other platforms.

Conclusion

Ardana is shaping up to be the missing puzzle piece in the Cardano landscape. It is on track to unlock unprecedented value and autonomy to the crypto community with advanced technologies, in-built scalability, unique community governance system and a unified stablecoin ecosystem.

About Ardana

Ardana is an on-chain asset backed stablecoin protocol and decentralized exchange stable asset liquidity pool built on Cardano. The stablecoin is overcollateralized with on-chain Cardano native assets facilitating borrowing and the decentralized exchange allows for highly capital efficient trading between stablecoins and identical assets with low risk income from fees for liquidity providers.

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