Overview

What is Fervent Finance?

Fervent Finance is a decentralized lending and borrowing protocol built for the Kaspa ecosystem, inspired by the proven model of Compound V2. By enabling users to lend their assets to earn interest or borrow against collateral, Fervent Finance serves as the foundational credit layer of Kaspa DeFi.

Design Philosophy

Our protocol is built on three fundamental pillars:

• Capital Efficiency – Idle assets become productive through continuous on-chain yield

• Accessibility – Open and permissionless markets for anyone to participate

• Sustainability – Safe, transparent mechanisms to ensure long-term protocol resilience

Interest Rate Model

Fervent Finance uses a dynamic interest rate algorithm based on supply and demand in each lending pool. As utilization increases, interest rates rise, incentivizing more supply and balancing liquidity across the platform.

This allows the protocol to efficiently allocate capital while rewarding lenders fairly in different market conditions.

Risk Isolation Pools

Each asset is isolated in its own lending market with its own collateral factor and risk profile. This prevents bad debt or volatility in one asset from affecting the wider protocol.

Users can choose pools that match their risk appetite — from stablecoins with conservative yields to more volatile assets with higher returns.

Governance & Security

The protocol is based on a battle-tested Compound v2 architecture

• Audited Contracts – Security-first approach with third-party reviews and ongoing monitoring

• Transparent Governance – Parameters such as collateral factors and interest model parameters can be adjusted through governance as the ecosystem evolves

Ecosystem Benefits

• On-chain money markets for DeFi protocols to build upon

• Passive yield generation for long-term holders

• Liquidity foundation for leverage, synthetic assets, and future Kaspa-based financial products