⛓️Why Cardano?

The eUTXO model offers advantages and challenges that vary depending on the specific use case. Maintaining a global state, such as a fund pool, can be complex and necessitates intricate solutions for aggregation in the eUTXO model, sometimes resulting in a loss of key scaling benefits. However, for scenarios where the state can be distributed across separate, unrelated scopes, Cardano stands out, with the block size being the only limiting factor for scalability.

This is why we've chosen P2P lending as our MVP product. Each loan operates independently, defined by a simple UTXO with transaction scope limited to two participants, the lender and the borrower. This alignment with the eUTXO model perfectly suits our P2P lending use case, where blockchain parameters are the sole scaling constraints. With the ability to create numerous loans per block, we can address real-world scenarios and volumes. Coupled with fractional order filling and other usability enhancements, we've achieved a decentralized finance solution on par with traditional finance. Wall Street, take note.

Furthermore, this is also why we're persisting with our plans for a decentralized orderbook exchange and continuing R&D on it. Only on Cardano's eUTXO model can we achieve a centralized exchange (CEX)-like orderbook experience and handle substantial volumes. The Ethereum Virtual Machine (EVM) is not up to the task.

Now, keeping in mind these considerations, the primary factor influencing our choice of the eUTXO model is our deep exploration of decentralized Treasury smart contract implementation. Microtransactions, like fees, are inherently small in nature. There's no need to aggregate these microtransactions into a single pot and then distribute them, as this would be a resource-intensive process. On Cardano, these small fees can remain as separate, unrelated UTXOs pointing to a single Treasury smart contract address. With no practical limit to the number of UTXOs that can point to a single address, this approach is ideal for our purposes.

Splitting these fees to CERRA token holders becomes as straightforward as collecting them. Each recipient only needs to access the UTXOs corresponding to their profit share, validated by the Treasury smart contract with the assistance of the Staking smart contract. Each recipient has an incentive to utilize different UTXOs to avoid potential racing conditions, especially when there's a significant number of UTXOs to choose from. This strategy enables us to fully leverage the Cardano blockchain's maximum scalability capacity and avoid congestion.

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