Solana, which amassed the most TVL in AMM and Yield Aggregator, is the ecosystem that had exceptional growth in 2021.
Lending is anticipated to be the next component of the DeFi stack to successfully capture the incoming cash flow in Solana after the rapid expansion of AMM and Yield Aggregator.
At this time, we can name a few well-known companies like Party Parrot (a Stablecoin borrowing platform) and Port Finance (Money Market on Solana).
In addition, since the retroactive program’s launch, other names have drawn a lot of interest. Learn about the top 5 lending platforms on Solana in more detail in this article.
The Solana chain’s Mango V3 project enables low-latency lending, borrowing, swapping, and trading.
First, it permits leveraged trading, allowing you to use borrowed money for deals that are up to 10 times leveraged on the Serum DEX ecosystem or 20 times leveraged on Mango’s permanent futures books. This makes it unique for three reasons. It also permits cross-trading. Third, Mango V3 features a $70 million deposit insurance fund through MangoDAO.
Mango had astonishing interest and borrowing rates in 2021. Margin trading is dangerous, especially in the unpredictable cryptocurrency market, thus Mango’s leveraged trading should be undertaken with extreme caution.
Ending up owing considerably more than you ever deposited is definitely a possibility. Stablecoin deposits currently earn between 1% and 3%.
Built on Solana, Solend is a money market. The goal of this platform is to establish itself as the Solana ecosystem’s most safe and user-friendly loan platform. In addition, Solend makes use of the landed blockchain, which has a great degree of scalability, allowing for incredibly quick and inexpensive transactions.
By borrowing, taking out loans to earn interest, and using both long and short-term leverage, Solend gives you the ability to use your capital more effectively. The Solana community now has more ways for players to boost their earnings thanks to Solend.
Currently, SOL, USDC, USDT, ETH, BTC, SRM, FTT, and RAY are some of the assets that Solend supports. Coming shortly are additional markets. The community of Solend will eventually control the listing procedure.
A DeFi prime brokerage service called Oxygen was created using Solana and is supported by the on-chain infrastructure of Serum.
With Oxygen, you may obtain trading leverage against a portfolio of assets, earn yield, borrow from peers, trade directly out of your pools, and earn yield.
It serves as a permissionless, affordable, and scalable protocol that democratizes borrowing, lending, and trading with leverage and enables you to maximize your capital. It was designed to handle hundreds of millions of users.
Port Finance is a non-custodial money market protocol on Solana. Its ambitions are to introduce a full range of interest rate products, including variable rate lending, fixed rate lending, and interest rate swaps, to the Solana blockchain.
The present variable rate product includes variable interest rates depending on supply and demand, cross collateral lending, and flash loans.
The fixed-rate loan product is based on the zero coupon bond model. We allow lenders to lend at a fixed rate and borrowers to take out fixed-rate, fixed-term loans.
Port Finance aims to be the liquidity gateway for the Solana DeFi ecosystem by providing simpler user interfaces, reduced collateral requirements, and customizable liquidation criteria based on volatility and liquidity.
On Solana, a liquidity network called Party Parrot is used for borrowing and lending. You can use Party Parrot and MakerDao as an analogy. By putting down a fixed quantity of their digital assets, both allow users to manufacture stablecoin. Party Parrot goes a step further, though, by allowing LP tokens on other protocols to serve as collaterals as well.
This feature was created because Party Parrot wants locked values in DeFi to be accessible.
While billions of dollars are currently locked under various DeFi systems, there are just a few use cases for LP tokens. Party Parrot significantly contributes to improving capital efficiency in DeFi systems by releasing this substantial locked value.
Crypto loans give investors access to liquid capital without having to sell their coin. Instead, users pledge their digital assets as security for a loan in cash or stablecoin.
Because they anticipate their crypto asset’s value to rise or because they wish to keep onto the asset for a long enough period of time to avoid short-term capital gains crypto tax rates, people can decide to take out a crypto loan as opposed to selling.
You can pay attention to the lucrative field of lending on Solana. This DeFi stack’s potential has been partially demonstrated by the impressive growth of lending platforms built on it.
Since you have learned about the best crypto lending platforms on Solana, You can start following these projects and locate your own investment chances.