A Quick Dive Into Solana DeFi
Solana is the 16th largest cryptocurrency as per market capitalization now. While the market isn’t in a very bullish state, Solana is doing quite fine. The blockchain project was conceptualized in 2017 and it collected $20M funding through a private sale in 2019. The mainnet beta of Solana was launched in 2020 and many prominent projects joined the Solana ecosystem since then. With 600+ active validators distributed across the globe; the project is creating a nice buzz. Like Ethereum, Solana supports smart contracts but provides transaction throughput of 50,000 - 65,000 TPS (vs. Ethereum’s 15 TPS) with 400 milliseconds blocktimes. The transaction cost of the blockchain is around $0.00001 only. Solana uses proof-of-stake (PoS) as its consensus model but it uses proof-of-history (PoH) which acts like a clock used before consensus to solve many problems of a distributed ledger. Solana looks fit for many use cases due to its high scalability. DeFi or decentralized finance is the hottest application of blockchain now. Let’s try to analyze the DeFi ecosystem of Solana where $900M+ value is locked at present.
Solana DeFi TVL growth all time - From defillama
Raydium
Raydium, an automated market maker (AMM) DEX, just completed 100 days on Solana. Raydium is different from many other AMM DEXs as it leverages the central order book of the Serum DEX to enable lightning-fast trades and shared liquidity. Raydium basically brings the order book of Serum to its AMM model to provide a better depth. The AMM model works just like Uniswap. A liquidity provider earns fees for providing liquidity to any pair. At present, liquidity pool creation needs Serum market ID. The swap trades take place with lightning speed. Raydium has adopted a liquidity mining model and you can earn higher APY by providing liquidity to certain pools. The ‘AcceleRaytor’ of Raydium works as an IDO kind of platform and the projects like Mercurial Finance, Media Network were launched successfully there. RAY is the utility token of Raydium DEX and it also acts as the governance token.
Audit: No details are available
TVL: $500M+
Serum
Serum is an order book based DEX built on Solana and it’s designed for trustless cross-chain trading. It’s natively implemented on Solana but will be interoperable with Ethereum. Serum DEX has no oracles to centralized price feeds and it offers pure, fast and cheap DeFi. Anybody can create a market on Serum in a permissionless manner. SRM is the utility token of Serum. Serum DEX GUI is open source and anybody can hold the GUI on any website and can customize it. Bonfida is the most popular GUI of Serum DEX.
Audit: No details are available
TVL: $180M+
Solfarm
This is a newly launched yield aggregator on Solana. The project is offering auto compounding yield for Raydium vaults. Solfarm received a grant from Solana Foundation. TULIP is the governance token of Solfarm and the platform offers a nice farming APY.
Audit: Not audited
TVL: $147M+ (100% into Raydium, so double counting of TVL figure is possible)
Orca
Orca is an AMM based DEX on Solana. The project aims to deliver a simpler, more human-centred experience for traders on Solana. Orca has planned to integrate Wormhole, a cross-chain bridge between Ethereum – Solana. There is no native token of Orca at present. Orca wants to give collectibles to the early adopter. There is no liquidity mining incentive as of now.
Audit: No details are available
TVL: $35M+
Mango Markets
Mango Markets offer on-chain margin trading on limit order books as well as perpetual futures. The project is in public beta now and it’s offering up to 5X leverage long or short, with limit orders on Serum DEX’s order book.
Audit: No details are available
TVL: $16M+
Oxygen
Oxygen is a DeFi Prime Brokerage protocol. It offers a pool-based financial infrastructure to democratize borrowing-lending. OXY is the native token of Oxygen. OXY token holders get 100% of net revenues generated by the protocol.
Audit: No details are available
TVL: $4.7M+
Solana seems to be ready for high-performance massive scale applications running on top of it. The famous ‘Blockchain Trilemma’ says that it is impossible to achieve optimum performance of a blockchain without compromising decentralization, security and scalability. Solana claims to solve the ‘Trilemma’ by implementing PoH, Tower BFT, Turbine, Gulf Stream, Sealevel, Pipeline, Cloudbreak and Archivers. The project obviously has a good number of backers in the industry and countless new DeFi projects are entering the ecosystem. The rise of Solana as a top blockchain project has already taken place. It’ll be interesting to see whether it enters the top 10 positions or not. The technical fundamentals look strong but Solana needs to pass the composability test to take ‘the world computer’ head-on.
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Recognition will bring respect EOS' way due to advanced application over what's available. A small fraction of top chain market cap can go quite a long way for the EOS ecosystem.
Thanks for the comprehensive overview. These all look very interesting. At this stage I would say investing in any of them would be some sort of gamble. Specially since there's no audits available.