FluidTokens Launches Lending V4 on Cardano Mainnet

FluidTokens released its Lending V4 application on Cardano mainnet on September 18, giving users access to new production markets for lending and collateralized borrowing.

The release follows a public preview opened earlier in the month and activates the protocol’s redesigned pool, automation and position management architecture.

V4 Opens New Cardano Lending Markets

FluidTokens is a noncustodial DeFi ecosystem launched on Cardano in 2022. Its lending model allows users to create liquidity pools, define lending conditions and accepted collateral, or borrow assets from pools matching their requirements.

In V4, a lender creates a pool identified by a unique NFT and sets its supported assets, interest rate, maturity, collateral and liquidation conditions. Borrowers can access a compatible pool or combine liquidity from multiple pools within one Cardano transaction.

Collateral remains locked in a smart contract, while repayments are sent directly to the lender’s designated address. FluidTokens does not take custody of user assets. ADA that remains unused inside a pool can continue generating Cardano staking rewards.

The architecture supports static and dynamic pools. Static pools follow conditions established by the lender, while dynamic pools can use loan to value data and oracle feeds to calculate available borrowing capacity.

V4 also includes installments, grace periods, late payment penalties, refinancing and recasting. Recasting reduces the outstanding principal without replacing the loan, while refinancing uses liquidity from a new loan to repay an existing position.

Automation and Transferable Positions Expand the Model

V4 allows lenders to enable automated liquidations and optional compounding of repaid principal.

Bots can monitor loan health, execute eligible liquidations and return available principal to the original pool. Operators receive fees established by the lender for completing those transactions.

The automation connects V4 with FluidTokens’ Aquarium infrastructure. Aquarium was developed as a decentralized transaction fee market that allows Cardano users and applications to sponsor transactions or pay fees with native tokens.

Aquarium operators who satisfy the required $FLDT staking conditions can compete to execute lending operations, including liquidations, collateral conversion and principal compounding. The protocol can combine those actions within one transaction when the pool and loan parameters permit it.

V4 also represents lender and borrower positions through NFT bonds. Depending on the original loan conditions, those bonds can be transferred or sold.

A lender can sell an active position to a compatible pool and recover the principal before the borrower completes repayment. The receiving pool must accept the same parameters, hold sufficient liquidity and operate without permissioned restrictions.

Borrower positions can also be transferred unless the loan terms explicitly prevent it. This creates a secondary market for lending positions instead of requiring every lender to remain in a loan until repayment or liquidation.

Permissioned pools can require a specific KYC token before liquidity becomes accessible. Native multisignature support also allows institutions and larger liquidity providers to manage deployed capital through multiple authorized signers.

Open Source Contracts Enter Production

FluidTokens has published the V4 smart contracts as open source Aiken code. The repository documents static and dynamic pools, multiple oracle models, CIP-113 smart token support and composability with other Cardano DeFi protocols.

The protocol also gives lenders several liquidation structures, including direct collateral claims, Dutch auctions and oracle based liquidations. Lenders can determine whether liquidated collateral is returned directly or converted into the original principal asset.

The official FluidTokens audit page currently lists a completed audit for P2P and Pool Lending V3, but it does not provide a separate final V4 audit report. The main public lending guide also remains labeled as V3.

The absence of a published final V4 report does not establish that the contracts were unaudited, but it leaves the completed scope and findings unavailable for independent public review. Smart contract, oracle and liquidation risks continue to apply to users interacting with the new markets.

V4 moves FluidTokens from preview to live production with pooled liquidity, automated servicing and position transfers operating inside one Cardano application. Its public code is available now, while V4 specific audit disclosure and updated user documentation have not yet appeared on the project’s official documentation site.