Last week, Cedra hosted X Space with Divine Favour C., CEO & Co-Founder of Juncta, to discuss the future of DeFi liquidity, idle capital, and why Juncta is building an integrated DLMM and lending infrastructure on Cedra.
The conversation was led by Diana King, core marketing contributor at Cedra.
Diana: What originally pushed you to start building Juncta?
Divine.: It started with a simple question: is DeFi liquidity actually efficient?
The deeper we looked, the clearer the problem became. Reports showed that between 83% and 95% of liquidity in major DeFi pools sits idle at any given time. That means most capital deposited by LPs is not generating yield at all.
At the same time, lending markets and DEX liquidity existed as completely separate systems, even though they were operating on the same chains with the same capital base.
We realized this was not a user problem or a UI problem. It was a protocol design problem. So we started asking: what if inactive liquidity could automatically earn lending yield instead of sitting unused?
That idea became Juncta. At its core, we are building a connection between liquidity provision and lending so capital is always productive.
Diana: What issues do you think still exist across most liquidity protocols today?
Divine: The first major issue is idle capital. Most liquidity inside DeFi pools is simply parked and not earning anything.
The second is that concentrated liquidity became too difficult for regular users. Professional market makers can actively manage positions with bots, but retail LPs often end up losing money because of impermanent loss.
And the third issue is fragmentation. DEXs and lending markets still operate separately instead of sharing liquidity efficiently. Capital gets scattered across millions of isolated pools instead of being utilized together.
For years, DeFi focused on TVL as the main metric. But locking capital is not the same as using it efficiently. We believe the next phase of DeFi will focus on productive capital rather than just large numbers.
Diana: In simple words, how does Juncta work?
Divine: Juncta combines a DLMM with an integrated lending market.
When users deposit liquidity, their active bins earn trading fees like a normal DEX. But when bins become inactive, instead of sitting idle, that capital is automatically made available to borrowers through the lending market.
So LPs effectively earn from two sources:
- trading fees when liquidity is active
- lending yield when liquidity is inactive
The important part is that the transition happens automatically. Users only make one deposit while the protocol manages the capital underneath.
That is what makes Juncta different. The capital is always working.
Diana: How did you first discover the Cedra ecosystem, and what made you decide to build there?
Divine: I first heard about Cedra through someone I trusted, so I decided to take a closer look.
What immediately stood out was the opportunity to build foundational infrastructure early. Cedra is a Move-based chain approaching mainnet without an established DLMM or integrated lending protocol yet.
For Juncta, that timing matters. We are not just building another DeFi app. We are building infrastructure that other protocols can build on top of from day one.
Move was also a strong fit technically because its resource model gives better guarantees around ownership and reserve management, which is important for the unified reserve layer we are building.
And once we started engaging with the ecosystem, the quality of builders and the community confirmed that Cedra was the right place to launch.
Diana: What were some of the biggest challenges while building the protocol?
Divine: The biggest challenge has definitely been the unified reserve accounting layer.
Juncta uses the same pool of capital for both DEX liquidity and lending. Managing those two systems simultaneously without conflicts is extremely difficult from an engineering perspective.
For example, when market prices move quickly, inactive bins may suddenly become active again while some of that capital is lent out. The protocol has to recall and settle liquidity instantly before swaps happen.
We spent a lot of time redesigning and stress-testing edge cases because this is not something you can patch later after launch.
Another challenge has been building across multiple chains simultaneously, including Cedra, Aptos, Solana, and Stellar. Each environment requires its own implementation while keeping the core protocol logic consistent.
Diana: Security and risk management are major topics in DeFi right now. How does your team approach them?
Divine: For us, security starts at the design level, not after deployment.
That is part of why we chose Move and Rust. Both languages help eliminate entire categories of vulnerabilities before code even runs.
We also built structural safeguards into the protocol itself. For example, only up to 80% of inactive liquidity can be borrowed at any given time, leaving a permanent reserve buffer for the DEX side.
On top of that, the protocol uses volatility-aware interest rates and a gradual liquidation model designed to reduce bad debt risk during extreme market conditions.
And of course, audits and bug bounties are mandatory before mainnet. But the important part is that security influenced every architectural decision from the beginning.
Diana: What are the biggest milestones the community should watch in the coming months?
Divine: The first big milestone is to launch on Cedra’s testnet. That is when people will finally be able to interact with the protocol directly and see how the dual-yield model works in practice.
After that comes the analytics dashboard, where LPs will be able to track trading fees and lending yield separately in real time.
Then comes the audit phase before mainnet launch on Cedra.
And after the DLMM is established, we are launching Juncta Launch, a token launchpad where projects can create tokens and graduate directly into Juncta liquidity infrastructure.
Diana: Looking long term, what does success for Juncta actually look like?
Divine: Success for us is becoming infrastructure.
The goal is to reach the point where developers building on Cedra simply assume Juncta exists underneath the ecosystem, the same way people naturally expect Uniswap or Aave on Ethereum.
We want Juncta to become the liquidity and lending layer that other protocols build on top of.
And beyond metrics like TVL, one of the biggest goals is helping retail LPs finally earn sustainable yield instead of watching their capital sit idle or lose value over time.
Diana: What kind of role do you see Juncta playing in the broader Cedra ecosystem?
Divine: We want to become the financial infrastructure layer for Cedra.
Every token launch needs liquidity. Every wallet needs pricing infrastructure. Every yield strategy needs underlying assets and lending access.
Juncta connects all of those pieces together through one unified reserve system.
Over time, with the addition of Juncta Launch and eventually Juncta Perps, the idea is to create a full native DeFi stack on Cedra rather than isolated protocols operating independently.
Diana: Finally, can you share a little alpha with the community?
Divine: One thing we are very excited about is Juncta Perps.
Unlike most perpetual platforms, collateral deposited into Juncta Perps will continue earning yield through the lending layer while serving as trading margin.
We are also planning broader market exposure beyond crypto, including commodities, indices, and equities.
And on the launchpad side, every successful token launch feeds directly back into Juncta's liquidity ecosystem, creating long-term revenue generation rather than temporary hype cycles.
The bigger picture is that every product we launch compounds the Cedra ecosystem itself. Early users are not just early to one protocol. They are early to the infrastructure layer that future protocols can build on top of.