Introduction
Welcome to this tutorial on building a decentralized lending platform. Decentralized finance (DeFi) has revolutionized the financial landscape, providing individuals with control over their assets and enabling peer-to-peer lending. In this tutorial, we’ll explore the concepts and implementation of a lending platform using Solidity. Leveraging smart contracts, we’ll create a transparent and secure ecosystem for lending, borrowing, earning interest, and purchasing insurance. By following this tutorial, you’ll gain practical experience in building decentralized applications and contribute to the growing DeFi ecosystem. Get ready to enter the world of decentralized lending platforms and start building your own!
Requirement
To follow this tutorial, you will require:
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A code editor or text editor such as Remix.
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An internet browser and a stable internet connection.
Prerequisite
To successfully complete this tutorial, it is recommended that you have:
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Familiarity with Javascript programming language.
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A basic understanding of Blockchain technology and its functioning.
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Basic knowledge of the Solidity programming language used for smart contract development on the blockchain.
We will begin by using the Remix IDE to write our smart contract. Let’s get started!
The complete code:
// SPDX-License-Identifier: MIT
pragma solidity >=0.7.0 <0.9.0;
import "@openzeppelin/contracts/utils/math/SafeMath.sol";
interface IERC20Token {
function transfer(address, uint256) external returns (bool);
function approve(address, uint256) external returns (bool);
function transferFrom(address, address, uint256) external returns (bool);
function totalSupply() external view returns (uint256);
function balanceOf(address) external view returns (uint256);
function allowance(address, address) external view returns (uint256);
event Transfer(address indexed from, address indexed to, uint256 value);
event Approval(address indexed owner, address indexed spender, uint256 value);
}
contract LendingPlatform {
using SafeMath for uint256;
uint internal hairsLength = 0;
address internal cUsdTokenAddress = 0x874069Fa1Eb16D44d622F2e0Ca25eeA172369bC1;
// Define Loan struct
struct Loan {
address borrower;
uint256 amount;
uint256 interestRate;
uint256 collateralAmount;
bool isDefaulted;
// Add more loan-related parameters as needed
}
uint256 public loanCounter;
mapping(uint256 => Loan) public loans;
mapping(address => uint256[]) public borrowerLoans;
// Define Insurance struct
struct Insurance {
uint256 loanId;
uint256 premium;
bool isClaimed;
// Add more insurance-related parameters as needed
}
mapping(uint256 => Insurance) public insurances;
event LoanCreated(uint256 indexed loanId, address indexed borrower, uint256 amount);
event LoanRepaid(uint256 indexed loanId, address indexed borrower, uint256 amount);
event LoanDefaulted(uint256 indexed loanId, address indexed borrower);
event InsurancePurchased(uint256 indexed loanId, address indexed buyer, uint256 premium);
event InsuranceClaimed(uint256 indexed loanId, uint256 insuranceId, uint256 amount);
function createLoan(uint256 _amount, uint256 /*_interestRate*/, uint256 /*_collateralAmount*/) external {
// Perform loan creation logic, such as collateral locking, verification, and storage
// Update loan status and emit events as needed
// Add more loan creation logic and update loan status as needed
emit LoanCreated(loanCounter, msg.sender, _amount);
}
function repayLoan(uint256 _loanId, uint256 _amount) external {
// Perform loan repayment logic, such as releasing collateral, updating balances, and status
// Update loan status and emit events as needed
emit LoanRepaid(_loanId, msg.sender, _amount);
}
// Function to default a loan
function defaultLoan(uint256 _loanId) external {
// Perform loan default logic, such as handling collateral, updating balances, and status
// Update loan status and emit events as needed
emit LoanDefaulted(_loanId, msg.sender);
}
// Function to purchase insurance for a loan
function purchaseInsurance(uint256 _loanId, uint256 _premium) external {
// Perform insurance purchase logic, such as verifying loan status, transferring premium, and storage
// Update insurance status and emit events as needed
emit InsurancePurchased(_loanId, msg.sender, _premium);
}
// Function to claim insurance for a loan
function claimInsurance(uint256 _loanId, uint256 _insuranceId, uint256 _amount) external {
// Perform insurance claim logic, such as verifying loan status, processing payout, and status
// Update insurance status and emit events as needed
emit InsuranceClaimed(_loanId, _insuranceId, _amount);
}
}
Code Analysis
// SPDX-License-Identifier: MIT
pragma solidity >=0.7.0 <0.9.0;
import "@openzeppelin/contracts/utils/math/SafeMath.sol";
In this code snippet, we have two important directives. The first one, // SPDX-License-Identifier: MIT, specifies that the code is released under the MIT open-source license. This license allows anyone to use, modify, and distribute the code while retaining the original license. The SPDX-License-Identifier is a standardized way of specifying the license type.
The second directive, pragma solidity >=0.7.0 <0.9.0;, defines the range of Solidity versions that the code is compatible with. It ensures that the code can be compiled using a version of Solidity that is equal to or greater than 0.7.0 and less than 0.9.0. This helps maintain compatibility and ensures that the code is compiled using the intended version of Solidity.
The third directive import { SafeMath } from "@openzeppelin/contracts/utils/math/SafeMath.sol";. This function by importing the SafeMath library from the OpenZeppelin contracts package, providing secure arithmetic operations for the contract.
Furthermore, we include an interface for the ERC20 token, which defines the required functions and events for interacting with ERC20 tokens within our contract.
interface IERC20Token {
function transfer(address, uint256) external returns (bool);
function approve(address, uint256) external returns (bool);
function transferFrom(
address,
address,
uint256
) external returns (bool);
function totalSupply() external view returns (uint256);
function balanceOf(address) external view returns (uint256);
function allowance(address, address) external view returns (uint256);
event Transfer(address indexed from, address indexed to, uint256 value);
event Approval(
address indexed owner,
address indexed spender,
uint256 value
);
}
This code provides the essential functions and events required for a Celo ERC20 token contract. The ERC20 standard is widely used for creating tokens on the Celo blockchain, and this code outlines the methods through which users can interact with the smart contract. These functions enable token transfers, approval of token spending by other addresses, and access to information about the token contract, including the total supply and token balances. Additionally, events are defined to emit notifications whenever a token transfer or approval takes place on the Celo blockchain, facilitating real-time updates for external applications.
Moving forward, We name our contract and define a struct to organize data in our lending platform.
contract LendingPlatform {
using SafeMath for uint256;
uint internal hairsLength = 0;
address internal cUsdTokenAddress = 0x874069Fa1Eb16D44d622F2e0Ca25eeA172369bC1;
// Define Loan struct
struct Loan {
address borrower;
uint256 amount;
uint256 interestRate;
uint256 collateralAmount;
bool isDefaulted;
// Add more loan-related parameters as needed
}
uint256 public loanCounter;
mapping(uint256 => Loan) public loans;
mapping(address => uint256[]) public borrowerLoans;
// Define Insurance struct
struct Insurance {
uint256 loanId;
uint256 premium;
bool isClaimed;
// Add more insurance-related parameters as needed
}
mapping(uint256 => Insurance) public insurances;
event LoanCreated(uint256 indexed loanId, address indexed borrower, uint256 amount);
event LoanRepaid(uint256 indexed loanId, address indexed borrower, uint256 amount);
event LoanDefaulted(uint256 indexed loanId, address indexed borrower);
event InsurancePurchased(uint256 indexed loanId, address indexed buyer, uint256 premium);
event InsuranceClaimed(uint256 indexed loanId, uint256 insuranceId, uint256 amount);
In our LendingPlatform contract, we utilize the SafeMath library for secure mathematical operations. We have internal variables like hairsLength and cUsdTokenAddress for internal use. The contract defines two structs, Loan and Insurance, to organize loan and insurance-related data. We keep track of loans using a counter and mappings, and emit events for loan creation, repayment, default, insurance purchase, and claim. Throughout this tutorial, we will explore the functionalities of this contract and explain them in detail, demonstrating how we can interact with the lending platform.
To expand the capabilities of our smart contract, we are introducing a new function called createLoan.
function createLoan(uint256 _amount, uint256 /*_interestRate*/, uint256 /*_collateralAmount*/) external {
// Perform loan creation logic, such as collateral locking, verification, and storage
// Update loan status and emit events as needed
// Add more loan creation logic and update loan status as needed
emit LoanCreated(loanCounter, msg.sender, _amount);
}
In the createLoan function, we initiate the process of creating a new loan on the lending platform. Here, we receive the loan amount _amount as a parameter. In this tutorial, we will focus on the loan creation logic, which typically involves steps like collateral locking, verification, and storage. We’ll perform these actions within the function to ensure the loan is properly set up. After completing the necessary steps, we update the loan status accordingly and emit the LoanCreated event, capturing the loan’s ID, the borrower’s address (msg.sender), and the loan amount. This allows us to track and display the newly created loan on the platform.
Next, we implement the repayLoan and defaultLoan function in our smart contract.
function repayLoan(uint256 _loanId, uint256 _amount) external {
// Perform loan repayment logic, such as releasing collateral, updating balances, and status
// Update loan status and emit events as needed
emit LoanRepaid(_loanId, msg.sender, _amount);
}
function defaultLoan(uint256 _loanId) external {
// Perform loan default logic, such as handling collateral, updating balances, and status
// Update loan status and emit events as needed
emit LoanDefaulted(_loanId, msg.sender);
}
In the repayLoan function, we handle the process of repaying a loan on the lending platform. We receive the loan ID _loanId and the repayment amount _amount as parameters. As part of the tutorial, we will focus on the loan repayment logic. This typically involves actions such as releasing collateral, updating balances, and adjusting the loan status to reflect the repayment. We implement these steps within the function to ensure a successful repayment process. Additionally, we emit the LoanRepaid event, capturing the loan ID, the borrower’s address (msg.sender), and the repayment amount. This event allows us to track and record the loan repayment on the platform.
In the defaultLoan function, we address the scenario where a loan defaults on the lending platform. As part of the tutorial, we will cover the loan default logic. This includes tasks such as handling collateral, updating balances, and adjusting the loan status to reflect the default. By implementing these steps within the function, we ensure proper handling of defaulted loans. Additionally, we emit the LoanDefaulted event, capturing the loan ID and the address of the caller (msg.sender). This event allows us to record and track loan defaults on the platform, providing transparency and accountability for the lending process.
Now we will discuss about the purchaseInsurance and function claimInsurance function.
function purchaseInsurance(uint256 _loanId, uint256 _premium) external {
// Perform insurance purchase logic, such as verifying loan status, transferring premium, and storage
// Update insurance status and emit events as needed
emit InsurancePurchased(_loanId, msg.sender, _premium);
}
// Function to claim insurance for a loan
function claimInsurance(uint256 _loanId, uint256 _insuranceId, uint256 _amount) external {
// Perform insurance claim logic, such as verifying loan status, processing payout, and status
// Update insurance status and emit events as needed
emit InsuranceClaimed(_loanId, _insuranceId, _amount);
}
}
In the purchaseInsurance function, we address the process of purchasing insurance for a specific loan on the lending platform. As part of the tutorial, we will cover the insurance purchase logic. This includes tasks such as verifying the loan status, transferring the insurance premium, and storing relevant information. By implementing these steps within the function, we enable users to protect their loans with insurance. Furthermore, we emit the InsurancePurchased event, capturing the loan ID, the buyer’s address (msg.sender), and the insurance premium. This event allows us to record and track insurance purchases on the platform.
In the claimInsurance function, we address the process of claiming insurance for a particular loan. This function is executed when a loan meets certain conditions that trigger an insurance payout. Within the tutorial, we will explain the insurance claim logic, which involves verifying the loan status, processing the payout amount, and updating the insurance status accordingly. By implementing these steps, we ensure a seamless insurance claims process. Additionally, we emit the InsuranceClaimed event, capturing the loan ID, insurance ID, and the claimed amount. This event helps us track and record insurance claims on the platform, providing transparency and accountability.
Here is the full code for this session
Contract Deployment
To deploy the lendingPlatform smart contract on the Celo blockchain, you would need the following:
CeloExtensionWallet: Download and install the Celo Extension Wallet from the Google Chrome store, create a wallet, and securely store your key phrase. Click here to intall the celo extension wallet
Celo Faucet: Fund your wallet by copying your wallet address and pasting it into the Celo Faucet, then confirm. Click here to access celo faucet
Celo Remix Plugin: Open Remix and create a new Solidity file, paste the lendingPlatform contract code into the file, and ensure the Solidity compiler is set to version 0.8.7 or later. Click here to access to access the remix ide
Compile the contract by clicking the Compile lendingPlatform.sol button in the Solidity Compiler tab in Remix.
In the Deploy & Run Transactions tab, select the Celo network from the dropdown menu, connect your wallet to Remix by clicking Connect to wallet, and select lendingPlatform from the Contract dropdown menu.
Click the Deploy button, confirm the transaction in your wallet, and wait for the transaction to be confirmed on the Celo blockchain.
Once the transaction is confirmed, the lendingPlatform contract will be deployed on the Celo blockchain and you can interact with it using Remix.
Conclusion
In conclusion, we have explored the essential components of a lending platform smart contract. By leveraging Solidity and the OpenZeppelin library, we have designed a contract that facilitates loan creation, repayment, default handling, and insurance management. Throughout this tutorial, we have demonstrated how to implement these functionalities, emphasizing the importance of proper logic, event emission, and data storage. This lending platform contract provides a robust foundation for building decentralized lending applications, allowing users to engage in secure and transparent lending practices. By understanding the concepts and code presented here, developers can further enhance and customize the contract to meet specific requirements and create innovative lending solutions on the blockchain.
Next Steps
Great job! It’s always helpful to provide additional resources for further learning. Don’t hesitate to reach out if you have any more questions or if you need further assistance, you can reach out to me on twitter by clicking this link. Happy learning!
About the Author
My name is Ogoyi Thompson, and I’m a web3 developer based in Nigeria. I am enthusiastic about working with blockchain technology.
