Table of Content
Introduction
Kamino Finance
Marginfi
Save (formerly Solend)
Rain.fi
Conclusion
Introduction
The Solana ecosystem hosts a variety of innovative decentralized finance (DeFi) platforms, each offering distinct features to enhance user experiences. Without further ado, let’s dive into some of these standout platforms: Kamino Finance, Marginfi, Save (formerly Solend), and Rain.fi, each contributing uniquely to the dynamic and evolving landscape of DeFi on Solana.
2. Kamino finance
What they do:
Kamino Finance excels in concentrated liquidity management, allowing users to lend and borrow against concentrated liquidity market maker (CLMM) LP positions. By issuing kTokens as yield-bearing LP tokens, Kamino integrates auto-compounding to maximize returns. The platform’s innovative approach to liquidity management and leverage positions it as a significant player in the DeFi sector.
Features:
Lending and Borrowing:
Lending: Kamino Lend can take concentrated liquidity (CLMM) LP positions as collateral, making it allows users to provide leverage CLMM liquidity across a wide range of strategies. When you deposit into any of Kamino's liquidity vaults, you receive a kToken in return, which represents the value of your liquidity position. kTokens can be deposited as collateral into Kamino Lend, just like any other token like SOL or USDC. While deposited, you continue to earn the yield from the liquidity.
Borrowing: Input the amount you want to borrow, then review the impact it will have on your LTV (Loan-to-value). You can borrow up to a maximum LTV amount, which is determined by the specific assets you are supplying/borrowing. A higher LTV moves your position closer to liquidation, whereas a lower LTV makes your position safer from liquidation.
Liquidity:
Kamino’s liquidity vaults are an automated liquidity solution that allows users to earn yield on their crypto assets by providing liquidity to concentrated liquidity market makers (CLMMs). Kamino vaults manage concentrated liquidity positions, automatically setting ranges, rebalancing positions, and auto-compounding fees, generating a kToken that can be used as collateral.
In the example above, I can just deposit one of the tokens into the Kamino vault (SOL or JUP). The protocol will automatically split positions into two tokens at the correct ratio for the current position.
Multiply:
Multiply allows a user to open a leverage position where they can increase their exposure to a yield-bearing asset by borrowing the underlying asset. (eg. increase exposure to JitoSOL by borrowing SOL). This is enabled by two K-Lend mechanisms: eMode and flash loans. More details please check this out: How it works
Details:
Concentrated Liquidity:
Unlike traditional AMM liquidity pools that spread liquidity across a wide price range, Kamino allows users to concentrate liquidity within specific price ranges, optimizing capital efficiency by using CLMM (concentrated liquidity market maker). In a CLMM pool your assets are "concentrated" within a custom-selected price range (example $30-$40 for SOL-USDC OR $0.999 - $1.001 USDC-USDT). By doing this, more liquidity is available for trading, which reduces slippage for swaps.
Auto-Compounding:
The platform automates the process of reinvesting earnings, maximizing returns for users.
Token Value:
Protocol TVL:
Fundraising:
Total funded: 10M
3. Marginfi
What they do:
Marginfi stands out by prioritizing risk management in its margin trading platform, offering features such as margin trading, lending, and borrowing. Its robust risk management tools, including liquidation mechanisms and asset risk tiers, ensure the secure handling of a wide array of assets, making it a reliable choice for traders on Solana.
Features:
Margin Trading: Core functionality allowing users to borrow against their crypto assets to amplify trading positions.
Lending and Borrowing: Enables users to lend their crypto assets to earn interest or borrow against their collateral.
Details:
Risk Management: Incorporates various risk management tools, including liquidation mechanisms, stop-loss orders, and margin calls. mrgnlend has a concept of Asset Risk Tiers. This unique design allows for safe support of a larger array of assets, with a particular focus of supporting long-tail tokens with unpredictable liquidity.
The following features are integral to its comprehensive risk management system:
• End-to-End Risk Engine: Constantly monitors the health of each individual bank, covering the entire protocol’s risk comprehensively.
• In-House Liquidators: While marginfi has in-house liquidators, the protocol also includes and encourages a significant number of external liquidators to ensure a robust and efficient liquidation process.
• Market Depth and Recovery Modeling: Gathers data to model market depth and recovery time, enabling predictions of future liquidity in various market scenarios.
• Dynamic Risk System: Plans to implement live bank updates directly from risk models for a dynamic and real-time risk management system.
Protocol TVL:
Fundraising:
4. Save (formerly Solend)
What they do:
Save (formerly Solend) is a decentralized lending and borrowing protocol on the Solana blockchain. It allows users to deposit various cryptocurrencies as collateral and borrow other digital assets. A standout feature is its permissionless pools, enabling anyone to create and manage isolated pools. The platform offers variable interest rates, a liquidation system, and integrates with oracles for accurate price data. Save's governance token is SLND, which grants holders voting rights. Recently, Save introduced new products including SUSD, a decentralized stablecoin, saveSOL, a liquid staking token, and dumpy.fun, a platform for shorting memecoins, expanding its ecosystem and offerings.
Features:
Permissionless Pools: Permissionless Pools allow anyone to create an isolated pool on Solend. The creator decides and earns 20% of origination fees generated in that pool. With permissionless pools, anyone can come to Solend and list their new token in an isolated pool! Users can set parameters based on how new the token is, and get them increased over time as the liquidity and holders grow. This use case for permissionless pools enables to allow any SPL token as collateral.
Lending and Borrowing: The fundamental function of Solend is to facilitate the lending and borrowing of various cryptocurrencies. Users can deposit supported assets as collateral to borrow other digital assets.
Liquidity Mining: Offers liquidity mining as a way to incentivize users to provide liquidity to the platform. By depositing crypto assets into lending pools, users earn rewards in the form of the platform's native token, SLND.
Collateral Token (cToken): cTokens are a yield-bearing deposit receipt. It means you can convert USDC into cUSDC to get a tradeable token that also earns interest on Solend. You can hold this token in your wallet to continue earning interest, or you can send it to someone else, and they’ll earn interest.
Details:
Variable Interest Rates: Solend employs a variable interest rate system to balance supply and demand.
Liquidation System: To protect lenders, Solend has a liquidation system that liquidates undercollateralized positions.
Oracle Integration: Solend relies on oracles like Pyth and Switchboard for real-time price data to assess collateral value and trigger liquidations.
Governance Token: SLND is the platform's governance token, granting holders voting rights on protocol upgrades.
Liquidity Mining: Solend offers liquidity mining to incentivize users to provide liquidity to lending pools.
Token Value:
Protocol TVL:
Fundraising:
Total funding: 32.5 M
5. Rain.fi
What they do:
Rainfi offers innovative NFT-centric financial products, including Buy Now Pay Later (BNPL) for NFTs and NFT borrowing. These features provide liquidity and flexible repayment options for NFT holders, allowing them to leverage their assets without selling them. Rainfi’s customizable pools further enhance user experience by allowing tailored lending and borrowing environments.
Features:
NFT :
Buy now pay later: Rainfi's BNPL model for NFTs is a groundbreaking feature that allows users to purchase high-value NFTs without paying the full price upfront. Users can take out loans to purchase NFTs with flexible repayment terms and competitive interest rates.
Here's how it works:
Users can take out a loan to cover a portion of the NFT's purchase price. Rainfi offers flexible repayment terms, allowing users to spread the cost over time.The platform often provides competitive interest rates on these loans. Unlike traditional loans, Rainfi's BNPL system is not based on collateral value, but rather on loan duration. This means users are not at risk of liquidation if the NFT's value drops.
Borrow:
Users can borrow against their NFTs as collateral to access liquidity. This feature provides liquidity for NFT holders without having to sell their assets.
Collateral: Users can use their NFTs as collateral to secure a loan.
Loan Terms: Users can choose loan amounts and repayment terms based on their needs.NFT Security: While the NFT is used as collateral, it remains in the user's wallet, allowing them to continue receiving airdrops and maintaining DAO access.
Early Repayment Benefits: Users who repay their loans early may qualify for reduced interest rates.
Customizable Pool:
Rainfi's customizable pools empower users to create tailored lending and borrowing environments by adjusting interest rates, asset selection, loan terms, and collateral types to suit their specific needs.
6. Conclusion
These platforms demonstrate the versatility and potential of DeFi on Solana, each addressing different aspects of financial needs with innovative solutions. From risk-managed margin trading and concentrated liquidity to permissionless lending pools and NFT financial products, the Solana DeFi ecosystem continues to evolve, offering diverse and sophisticated financial tools to users.
Thanks for reading!