Wildcat V2 Launch on Ethereum

Wildcat, a decentralized lending protocol founded by Laurence Day, has officially launched its version 2 on Ethereum. The announcement was made on Thursday.

According to a tweet from the project’s X account, “Wildcat V2 was just deployed to mainnet,” with the deployment costing 0.06969 ETH (approximately $180). Day mentioned that while the launch was smooth and the “quiet technical part” is mostly complete, it will take about a week for everything to be finalized.

The protocol was co-founded by Indexed Finance’s Dillon Kellar and includes Wintermute’s Evgeny Gaevoy as a silent partner. It operates as an open marketplace that allows ratified borrowers to create fixed-rate, onchain credit facilities. A ratified borrower is defined as someone who has accepted all the terms of a loan.

“We’re not dictating what it is that people are allowed to borrow or at what rate,” Day explained in an interview with The Block, describing their approach as a free market model.

Wildcat differs from traditional lending platforms by not underwriting loans itself. Unlike other decentralized finance (DeFi) credit protocols such as Aave and Compound, Wildcat enables undercollateralized loans.

Borrowers can customize their agreements according to their needs, without the obligation to share financial backing information—effectively allowing them to rely solely on their reputation when borrowing.

However, Day cautioned that this model could be risky, considering the pseudonymous nature of crypto. He emphasized the importance of conducting due diligence on potential borrowers, comparing the evaluation of loans to assessing investments in companies like Netflix versus junk bonds.

Targeted primarily at institutional players such as funds, market makers, and DAOs, Wildcat V1 was mainly used by Wintermute. Day speculated that Wildcat will primarily facilitate stablecoin borrowing while allowing users to create markets for more exotic assets.

Users have control over various loan parameters—reserve ratios, maximum capacity, yield rates, withdrawal cycle lengths, eligible lending addresses, and KYC processes for their vaults.

The protocol’s whitepaper underlines that counterparty risks are significant. If a borrower defaults or disappears after taking on debt, recovery of assets may be challenging.

Despite the risks associated with undercollateralized lending, Day noted that the concept arose as a response to the collapse of Terra, an algorithmic stablecoin platform that caused significant market turmoil in 2022.

He stressed that the goal is to enhance transparency by bringing credit activity onchain, which could potentially prevent failures similar to those witnessed after the Terra incident.

“What happened two years ago was primarily due to a lack of financial transparency among parties involved,” he added. “Post-FTX, due diligence standards must be heightened.”

UPDATE (Feb. 7, 2025): Update whitepaper link to latest version of the document.