TLDR
- Weft V2 Enhancements: Weft Finance V2 builds on its predecessor with innovative features like support for Liquid Staked Units (LSUs) as collateral, Efficiency Mode for better capital use, Isolation Mode for managing riskier assets, and configuration buffering to stabilize loans, all designed to improve safety and scalability.
- Radix as the Foundation: Radix’s scalability, composability, and security made it the ideal platform for Weft Finance, offering tools like the Transaction Manifest and Radix Wallet to enhance user and developer experiences.
- Ambitious Growth Goals: By 2025, Weft aims to reach $70M in Total Value Locked (TVL) and $1M in annual revenue through expanded marketing, increased asset support, and liquidity incentives to attract a broader user base.
Weft Finance is shaping DeFi on the Radix Network. Built for seamless lending, borrowing, and capital efficiency, it empowers users to earn yield, access loans, and execute advanced financial strategies with core Radix assets like XRD and xUSD.
With over $2M in TVL at its peak, Weft V1 laid the groundwork for DeFi lending on Radix. It allowed users to deposit assets to earn interest or borrow by locking collateral like XRD, xUSD, and LSULP.
But V1 wasn’t perfect—it highlighted key opportunities for growth, such as increasing listed assets and optimization of transaction fees for better scaling.
Enter Weft V2: a refined, more powerful platform ready to set a new benchmark for DeFi on Radix.
Introducing Weft Finance V2
Weft V2 is a comprehensive upgrade, addressing the challenges of V1 while introducing a host of new features that enhance efficiency, and overall user experience. This latest iteration not only fixes prior limitations but also introduces innovative tools that position it as the premier lending dApp on Radix.
Support for Liquid Staked Units (LSUs) as Collateral
Liquid Staked Units (LSUs) are assets that represent tokens users have staked, and they are among the most valuable and flexible assets in the Radix ecosystem. With Weft V2, you can now use LSUs as collateral for loans.
This means you can borrow funds without needing to unstake your assets, allowing you to keep earning staking rewards while accessing liquidity. Additionally, Weft V2 includes support for NFTs that represent unstaked collateral, giving users even more ways to manage and leverage their holdings efficiently.
Efficiency Mode with Correlation Groups
Efficiency Mode is an innovative feature unique to Weft V2. Imagine grouping together loans and the collateral backing them based on their shared characteristics—this is the idea behind correlation groups. These groups allow Weft to treat related assets as part of a single loan structure called a Collateralized Debt Position (CDP).
LSU with Efficiency Mode Correlation
This approach reduces the amount of collateral you need to secure your loan without increasing risk. In simpler terms, it makes borrowing more efficient, saving you money while still ensuring your loans are safe.
Isolation Mode
Not all assets are created equal—some carry higher risks. Isolation Mode is a way for Weft to handle these riskier assets by placing them in separate ‘pools.’ By doing this, the risk associated with one asset doesn’t spill over to the rest of the platform.
For users, this means more types of assets can be used as collateral, including higher-risk ones, without jeopardizing the safety or stability of the entire protocol. It’s like having separate compartments on a ship to prevent a leak from sinking the whole thing.
Configuration Buffering for Stability
Imagine you’re managing a loan, and suddenly, the system changes the rules, causing your loan to be liquidated unexpectedly.
To prevent this, Weft V2 introduces configuration buffering. This feature locks in the latest settings when calculating the health of your loan, ensuring that sudden updates won’t affect your position. For users, this provides peace of mind and stability, making it easier to manage loans without worrying about unexpected changes in the system.
Improved Safety and Scalability
Weft V2 is designed with a dual-layer system that separates collateral management from the main lending pools. Think of this as creating a secure vault for managing collateral, which improves the overall safety of the platform.
This structure also makes it easier for Weft to grow—new features or versions, like a future Weft V3, can be added without disrupting existing users. On top of that, the system has been fine-tuned with better price data fetching and scalability testing, ensuring it runs smoothly even as more users and assets join the platform. For users, this means a safer, faster, and more reliable experience.
Why Did Weft Finance Build on Radix?
Weft Finance was developed with the vision of creating a truly innovative and efficient decentralized lending protocol. While Ethereum and other EVM-compatible blockchains dominate the DeFi space, their inherent limitations—such as scalability issues, high fees, and less user-friendly developer tooling—made them unsuitable for Weft’s ambitious goals.
DeFiLlama now tracks Weft Finance V2
Radix emerged as the ideal platform for building Weft Finance. Purpose-built for DeFi, Radix offers a unique blend of scalability, composability, and security that is difficult to find on other layer-1 networks.
The Radix stack provides unparalleled composability and user experience, with the Transaction Manifest simplifying dApp interactions and the Radix Wallet enabling seamless asset management. Radix aligns perfectly with our mission to create a scalable, user-friendly, and secure lending platform. We’re confident that Radix will enable us to realize our vision more efficiently than any other blockchain. – Atoumbre, Weft Finance Co-Founder
What Comes Next for Weft?
Weft Finance has set ambitious goals to drive growth and establish itself as a leading lending protocol. By the end of Q2 2025, the aim is to achieve $70 million in Total Value Locked (TVL) and generate $1 million in annual revenue. To accomplish this, Weft Finance is working on three main areas:
Expanding Marketing Beyond the Radix Ecosystem
The first step is to broaden awareness and engagement outside the Radix community. By targeting a wider audience, Weft aims to attract new users from other ecosystems.
Enhancing Asset Support for Lending and Collateral
To meet the needs of a growing user base, Weft Finance plans to significantly increase the variety of assets available for lending and collateral. By supporting a wider range of tokens, the platform will open up opportunities to leverage diverse financial strategies and ensure users have access to the tools they need for success.
Introducing Liquidity Incentives for Additional Yield
To attract deposits and enhance yield opportunities, Weft will implement liquidity incentives. These incentives are designed to reward users for providing liquidity, creating a more attractive ecosystem for both borrowers and lenders.
For more information on Weft Finance, head to the website, follow the project’s official Twitter account or join the Telegram channel.
All information about Weft Finance was provided by the Weft Finance team and has not been verified by Radix Publishing, RDX Works, or their associated companies.
