he DeFi sector has faced its fair share of volatility in 2024, with many protocols struggling to maintain their liquidity and user engagement amidst bearish market conditions. However, amidst this challenging landscape, Colend, a decentralized lending protocol on the Core blockchain, has defied expectations.

On August 16, 2024, Colend achieved a significant milestone by surging to a total value locked (TVL) of $180 million, a remarkable 100% increase within a week. This surge is particularly noteworthy given that no other lending protocol within the top 120 DeFi apps has experienced such a substantial monthly TVL increase. At its peak, Colend became the largest decentralized application (dApp) on the Core blockchain by TVL, showcasing the protocol’s ability to attract and sustain liquidity even in a bearish market.

As of this writing, Colend’s TVL has slightly corrected to $116 million, making it the second-largest DeFi app on the Core blockchain, just behind Pell Network, a multi-chain restaking protocol. Despite the correction, Colend’s performance remains a beacon of success in the DeFi space, demonstrating the potential of innovative protocols to thrive even when market conditions are less than favorable.

Colend’s success is also reflective of the broader growth of the Core blockchain, which has seen its TVL double over the past week to reach a record $259 million. This growth is largely attributed to the combined influence of Colend and Pell Network, both of which have driven significant liquidity to the Core blockchain. Core’s rise to become the 25th largest blockchain by TVL in DeFi is a testament to the effectiveness of its ecosystem in supporting high-performing dApps like Colend.

The Factors Behind Colend’s Success

Colend’s success is underpinned by several key factors that have enabled it to outperform other DeFi protocols during a period of market downturn:

1. Strategic Asset Listings: Colend’s focus on Bitcoin-related tokens, particularly SOLVBTC.B and SOLVBTC.M issued by Solv Protocol, has attracted significant deposits. These tokens represent real-world assets (RWA) and offer an average annual percentage yield (APY) of 0.09% and 0.01%, respectively. The choice to list stable and highly valued assets has helped Colend maintain liquidity and attract conservative investors looking for lower-risk opportunities in a volatile market.
2. Innovative Use of the Core Blockchain: Core, a layer 1 blockchain launched in 2023, was designed to address the scalability trilemma by offering a robust and scalable infrastructure for dApps. Colend has effectively leveraged Core’s capabilities to deliver a seamless and efficient user experience, which has played a critical role in attracting and retaining users. The blockchain’s ability to handle high transaction volumes with minimal latency has enabled Colend to scale rapidly, even as the broader DeFi market experienced a downturn. Core’s architecture, which prioritizes both decentralization and scalability, has provided Colend with the necessary tools to thrive in a competitive environment.
3. Market Positioning and Timing: Colend’s rise also coincides with a broader trend of increasing interest in DeFi solutions that offer real-world asset (RWA) exposure. As investors seek stability in turbulent markets, platforms like Colend, which offer lending options backed by real-world assets, have become increasingly attractive. The timing of Colend’s growth, coupled with its strategic positioning within the DeFi ecosystem, has allowed it to capture significant market share.
4. Community and Ecosystem Support: The Core blockchain’s growing community and ecosystem have also played a vital role in Colend’s success. As more projects launch on Core, the network effects of these developments have helped drive liquidity to Colend. The support from other projects within the Core ecosystem, such as Pell Network, has further enhanced the protocol’s visibility and appeal.

How to Launch a DeFi Lending App on the Core Blockchain?

Launching a DeFi lending application on the Core blockchain involves a series of strategic steps, from initial concept development to deployment and scaling. Below is a comprehensive guide to help entrepreneurs and developers navigate the process.

1. Conceptualization and Market Research

Before diving into development, it’s crucial to conduct thorough market research to identify the needs and pain points within the DeFi lending space. Understanding the competition, user demand, and potential market gaps will help you design a product that stands out. For example, Colend’s focus on RWA-backed loans is a direct response to the demand for lower-risk DeFi options in a volatile market.

• Identify Target Audience: Determine who your potential users are — whether they are retail investors, institutional players, or specific crypto communities.
• Assess Market Demand: Look at current trends, such as the growing interest in real-world asset lending, to gauge the demand for your product.
• Analyze Competitors: Study existing DeFi lending platforms, particularly those on the Core blockchain, to understand their strengths and weaknesses.

1. Platform Design and Tokenomics

Designing your DeFi lending platform involves creating a user-friendly interface and developing the tokenomics that will govern your platform’s operations. This includes deciding on the types of assets that will be supported, the interest rate models, and the incentive structures for users.

• User Interface (UI) Design: Focus on creating a seamless and intuitive user experience. The platform should be accessible to both experienced DeFi users and newcomers.
• Smart Contract Development: Write and test the smart contracts that will manage the lending and borrowing functions. Core’s blockchain offers tools and libraries to facilitate smart contract development.
• Tokenomics: Define the tokenomics of your platform, including the native token (if applicable), interest rates, collateral requirements, and reward mechanisms. Consider implementing mechanisms that encourage liquidity provision and long-term engagement.

1. Development and Testing

Once the design is finalized, the next step is to start the development process. This involves coding the backend and frontend of the platform, integrating it with Core’s blockchain, and ensuring all components work seamlessly together.

• Backend Development: Develop the core functionalities of your platform, including the lending and borrowing logic, wallet integration, and user account management.
• Frontend Development: Build a responsive and easy-to-navigate frontend that allows users to interact with your platform’s features.
• Integration with Core Blockchain: Utilize Core’s developer tools and SDKs to integrate your platform with the blockchain. This includes setting up nodes, deploying smart contracts, and ensuring secure communication between your platform and the blockchain.
• Testing: Conduct extensive testing to identify and fix bugs. This should include both unit tests and integration tests to ensure the platform is secure and reliable.

1. Security Audits

Security is paramount in DeFi. Before launching your platform, it’s essential to conduct thorough security audits of your smart contracts and platform architecture. Engage with reputable security firms to audit your code and identify potential vulnerabilities.

• Smart Contract Audits: Have your smart contracts reviewed by third-party auditors to ensure they are free of vulnerabilities and exploits.
• Penetration Testing: Conduct penetration testing to assess the security of your platform’s infrastructure and identify any weaknesses that could be exploited by malicious actors. This step is critical to protecting user funds and maintaining trust in your platform.

1. Deployment and Launch

With the development and testing phases complete, you’re ready to deploy your DeFi lending platform on the Core blockchain. The deployment process involves setting up the necessary infrastructure, launching the smart contracts, and making the platform available to users.

• Infrastructure Setup: Ensure that your platform’s backend is hosted on reliable servers or a decentralized hosting solution to provide high availability and resilience.
• Smart Contract Deployment: Deploy your smart contracts on the Core blockchain. Ensure that the contracts are correctly configured and accessible to users through the platform’s frontend.
• User Onboarding and Education: Create guides, tutorials, and FAQs to help new users understand how to use your platform. Consider running a marketing campaign to attract early adopters and liquidity providers.

1. Marketing and Community Building

Building a strong community around your DeFi lending platform is crucial for its long-term success. Engage with the broader Core blockchain community, collaborate with other projects, and use social media, forums, and events to promote your platform.

• Social Media and Content Marketing: Use platforms like Twitter, Discord, and Medium to share updates, tutorials, and insights about your platform. Regular content keeps your community engaged and informed.
• Incentive Programs: Consider launching incentive programs, such as liquidity mining or staking rewards, to attract users and encourage platform usage.
• Partnerships and Integrations: Collaborate with other DeFi projects, especially within the Core ecosystem, to expand your platform’s reach and functionality.

1. Ongoing Development and Updates

The DeFi space is dynamic, and continuous development is essential to stay competitive. Regularly update your platform with new features, optimize existing functionalities, and respond to community feedback.

• Feature Enhancements: Continuously improve your platform by adding new features, such as support for additional assets, enhanced analytics, or new lending models.
• Security Updates: Keep your platform secure by regularly updating your smart contracts and infrastructure based on the latest security practices and audit recommendations.
• Community Engagement: Maintain an active dialogue with your community to gather feedback, address concerns, and keep users informed about upcoming updates and developments.

Cost Analysis: Features of a DeFi Lending Platform on Core Blockchain

Building a DeFi lending platform on the Core blockchain involves various costs, depending on the complexity of the platform, the features implemented, and the resources required for development and deployment. Below is a cost analysis of the key features involved in launching such a platform.

1. Smart Contract Development

Smart contracts are the backbone of any DeFi lending platform. The cost of developing smart contracts varies based on their complexity and the level of security required.

• Basic Lending Contracts: For basic lending and borrowing functions, expect costs to range from $10,000 to $30,000, depending on the complexity of the contracts and the expertise of the developers.
• Advanced Features: Implementing advanced features, such as dynamic interest rates, collateral management, and liquidation mechanisms, can increase costs to between $30,000 and $70,000.
• Security Audits: A thorough security audit of smart contracts by a reputable firm can cost between $15,000 and $50,000, depending on the scope and depth of the audit. Given the importance of security in DeFi, this is an essential investment to protect user funds and ensure the platform’s integrity.

1. Frontend and Backend Development

The user interface and backend infrastructure are critical for ensuring a smooth and efficient user experience. The costs associated with frontend and backend development include design, coding, and integration with the Core blockchain.

• Frontend Development: Creating a responsive and intuitive user interface can cost between $20,000 and $50,000, depending on the complexity of the design and the number of features implemented.
• Backend Development: Developing the backend to handle user accounts, transaction processing, and integration with the Core blockchain can cost between $30,000 and $70,000. This includes setting up secure servers or using decentralized hosting solutions.
• Integration with Core Blockchain: Integrating the platform with the Core blockchain, including setting up nodes and deploying smart contracts, can cost an additional $10,000 to $30,000.

1. Security Measures

Beyond smart contract audits, additional security measures are necessary to protect the platform from external threats and ensure the safety of user data.

• Penetration Testing: Conducting penetration tests to identify vulnerabilities in the platform’s infrastructure can cost between $10,000 and $30,000, depending on the scope of testing.
• Ongoing Security Monitoring: Implementing ongoing security monitoring and threat detection services can cost between $5,000 and $15,000 per month.

1. Tokenomics and Incentive Programs

If your platform includes a native token or other incentive mechanisms, there will be additional costs associated with tokenomics design, distribution, and maintaining liquidity.

• Tokenomics Design: Hiring experts to design a robust tokenomics model, including setting up initial distributions, staking rewards, and governance mechanisms, can cost between $15,000 and $40,000.
• Liquidity Provision: Initial liquidity provision for token pairs on decentralized exchanges (DEXs) may require a capital investment ranging from $50,000 to $200,000, depending on the target liquidity levels.
• Incentive Programs: Running liquidity mining or staking programs to attract users can cost between $10,000 and $50,000 per month, depending on the rewards offered and the scale of the program.

1. Marketing and Community Building

Marketing and community building are crucial for the platform’s adoption and long-term success. The costs associated with these efforts can vary based on the scale of the campaign and the platforms used.

• Initial Marketing Campaign: A comprehensive marketing campaign, including social media promotion, content creation, and influencer partnerships, can cost between $20,000 and $60,000.
• Ongoing Community Management: Maintaining an active community through regular updates, events, and engagement can cost between $5,000 and $20,000 per month.
• Partnerships and Integrations: Forming partnerships with other DeFi projects and integrating with other platforms within the Core ecosystem may require additional budget allocations ranging from $10,000 to $50,000, depending on the scope of collaboration.

Conclusion

Colend’s impressive surge to a record TVL of $180 million, even in the face of a broader DeFi market downturn, underscores the potential for innovative protocols to defy market trends and achieve significant growth. By strategically leveraging Core blockchain’s advanced capabilities, focusing on real-world asset-backed loans, and building a strong community, Colend has set a new standard for what is possible in the DeFi space.

For entrepreneurs looking to launch a DeFi lending platform, Colend’s journey offers valuable insights into the importance of strategic planning, robust security measures, and continuous development. With the right approach, it is possible to build a platform that not only survives but thrives in the competitive DeFi landscape. As the Core blockchain continues to evolve, it presents a fertile ground for new projects to innovate and succeed, just as Colend has done.

Disclaimer：

1. This article is reprinted from [Coinmonks]. All copyrights belong to the original author [Markdomain]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.