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TLDR
Root Finance is a DeFi lending and borrowing protocol that aims to onboard more users and capital to the Radix Ecosystem through education and a superior UI and UX.
The team quickly smashed through $350,000 in TVL, with the goal of reaching $1M TVL and integrating more assets in the coming months.
The team has many years of experience building within the EVM space and chose to build Root Finance on Radix due to its superior tech stack.
Root Finance is a decentralized lending and borrowing protocol built on the Radix Network that launched in mid-October 2024. In the weeks following its debut, DeFiLlama reported over $350,000 in total value locked (TVL), marking a strong start for the platform.
You can currently supply assets like XRD, xWBTC, xETH, xUSDC, xUSDT, LSULP, and HUG, while borrowing is available for all these assets except HUG. The team plans to expand the list of supported assets in the coming months.
Root Finance offers a non-custodial environment where users can participate as depositors or borrowers. Depositors provide liquidity to the market, earning passive income, while borrowers can access funds through an overcollateralized system.
This means that borrowers must provide more value in collateral than the amount they wish to borrow. For instance, to borrow $100 worth of assets from Root Finance, the borrower might need to deposit $150 worth of cryptocurrency as collateral.
This system protects lenders by reducing risk. If the value of the collateral drops below a certain threshold, the protocol can automatically liquidate the collateral to repay the loan, ensuring that lenders are not left with unpaid debts. Overcollateralization is a common practice in DeFi as it maintains the security and stability of lending markets, even in the face of market volatility.
Simply, this approach ensures that loans remain protected and covered, allowing borrowing and lending to happen in a decentralized, trustless manner.
The Root Finance team acknowledges that borrowing and lending in DeFi is nothing new, but they are prioritizing an enhanced user experience to stand out. By focusing on creating a seamless and intuitive UI/UX, Root Finance aims to make DeFi more accessible and user-friendly. This approach is key to attracting new users and capital, driving growth within the Radix ecosystem.
The Roadmap and Goals of Root Finance
The Root Finance team brings a wealth of experience and knowledge having previously worked on EVM-based projects; their aim on Radix is to help grow the Radix Ecosystem by onboarding fresh capital from new users in hopes that they’ll stick around to further explore the other dApps and protocols building on the network.
The team also places a lot of value on education, seeing it as their job to help onboard the average person to Web3 and DeFi users to Radix; this will be done through the Root Finance Academy, providing a wealth of content, including videos and articles on Radix and the Root Finance platform.
As Root Finance reaches its first milestone of $1 million in Total Value Locked, the platform will continue to evolve, with plans to launch a user onboarding campaign that includes the innovative Root Points incentive program. This program adds a fun, interactive layer to the typical lending and borrowing experience. Additionally, Root Finance is focused on integrating new assets, driven by partnerships across the Radix and wider DeFi ecosystem.
Why Build on Radix?
Root Finance's journey began long before its launch on the Radix Network. The founding team had already spent years working together in the EVM space, specifically within asset management. Having gained a deep understanding of the DeFi landscape, they recognized the potential to create something truly innovative on Radix.
“We wanted to create a dApp that we would be excited to engage with on Radix, and at the same time, we aimed to build a lending and borrowing market, as we believe that having platforms like Root Finance in a new DeFi Ecosystem is very important.”
- Komodo, Root Finance
Witnessing the growth and impact of projects like AAVE on Ethereum as the network's first lending and borrowing protocol motivated the Root Finance team to bring that same spirit to Radix, creating a cornerstone for the ecosystem while delivering a user-friendly, high-performance platform for DeFi enthusiasts.
Root Finance chose Radix because of the advantages it offers, which are not readily available on other networks like Ethereum. The Root Finance team highlighted three main reasons for building on Radix, including:
- Radix’s cutting-edge consensus mechanism delivers unmatched scalability without sacrificing decentralization or security. This is critical for a potentially high-transaction protocol like Root Finance, where the ability to scale ensures users experience smooth, efficient transactions every time.
- Radix’s Scrypto programming language allows for a safer, more intuitive way to build smart contracts, reducing the risk of bugs and vulnerabilities that can plague DeFi applications. This security has directly shaped the design of Root Finance’s lending and borrowing features.
- Radix’s exceptional wallet experience further ensures users enjoy a smooth and reliable experience when managing their assets, with lower fees and faster transactions compared to other networks.
For more information on Root Finance, head to the website, follow the project’s official X account, or join the Root Finance Telegram channel.
All information about Root Finance was provided by the Root Finance team and has not been verified by Radix Publishing, RDX Works, or their associated companies.