*obligatory not financial advice*
What is Solend?
It is a dApp for lending and borrowing cryptocurrencies that runs on the Solana blockchain.
Solana is a smart contract blockchain that is famous for its ridiculous high speed and low fees. It gained a lot of popularity due its scalability despite being quite centralized. Solend is one of the biggest DeFi protocols on Solana and is bringing collateralized loans to its ecosystem.
Lending protocols like Aave, Venus or Solend are an essential part of any smart contract blockchain. With them you can gain liquidity without needing to sell an asset you are bullish on. They work by letting users deposit supported tokens that they can provide for lending or use as collateral to borrow other tokens whose total value is lower than their collateral. The borrowers need to pay a variable interest rate for their loan that the lenders are earning.
The borrowers can pay their loan back whenever they want, there are no fixed dates for payments or anything. However, should the value of their collateral fall and is risks to no longer cover their loan soon, it will get liquidated to automatically pay the loan back. In that case you would lose an asset that you were bullish on, so it’s not without risk. The amount you can borrow without getting liquidated is different for each type of asset used as collateral, but in most cases you can borrow up to 75% of its value.
Such lending protocols are great for anyone that needs money quick but doesn't want to sell a position they believe will gain value soon. So if you need money right now but don't want to sell your SOL coins, then you can use them to take a loan with stablecoins. This can also be used for leverage trading where you take a loan in a stablecoin and use them to buy more cryptocurrencies you are bullish on. Or you can short an asset by borrowing an asset you are bearish on, selling them immediately and then buying back at a hopefully lower price. People that don't want to take any risks or loans can also simply provide funds to earn interest on them.
Lending protocols are providing great services to the DeFi world and Solend is providing them for Solana. This blockchain is much cheaper to use and faster than most other chains so using Solend is very easy and uncomplicated and if Solana can attract more users with its high speed then Solend could grow to one of the biggest DeFi applications. However, Solana is kinda centralized, in fact its founders have so much control over the network that they shut it down each time they have to fix a bug, and this makes the entire network as well as the Solend platform vulnerable.
The SLND Token
SLND is the native governance token of Solend. It gives its holders voting rights on changes to the protocol and on how the community treasury is being spend.
The token is also used for the referral program of the dApp. If you supply or hold 1,000 SLND tokens in your wallet then you can share a referral link with new users to earn 20% of the fees and interest they are paying. This does not lead to a higher cost for the new members, it’s just that 20% of what they would have to pay anyway is going to the affiliate. This is done to promote the dApp and introduce more people and their funds to the platform.
There is a max supply of 100,000,000 SLND tokens. 10% of the supply was sold to investors and another 5% was put aside for potential future sales, 25% was given to the core team and founders, 30% was distributed to people that bonded SLND-USDC liquidity pool tokens and the remaining 30% was put into a treasury that the token owners control. The tokens of the investors and team members have a 3 year vesting schedule that will start in 2022. Sadly the supply isn't being distributed to users of the platform but instead was only sold or distributed to founders and existing token holders.
Aave is one of the biggest cryptocurrency projects and since Solend is providing the same services to the popular Solana blockchain it could also become one of the biggest DeFi applications if Solana does well. Solend is also featuring much lower fees and higher speed than most other lending protocols thanks to its blockchain. SLND has a very low market cap and is currently far below its ATH. The token has a max supply but most of it was sold to private investors and distributed to founders and early investors, other lending protocols are letting their depositors earn their token, Solend doesn't offer its users that. The biggest downside however, is that the protocol is vulnerable due to Solana being centralized.
SLND is currently not listed on many centralized exchanges, but the MEXC Global exchange has it. You can also buy it on the Raydium and Serum DEXes on Solana and you can store it in a Phantom or Solaflare Wallet which you can also use to interact with the Solend dApp.
-----
If you liked my post then please leave a tip, that way we both earn some money!
If you don't have an account on Publish0x then you can signing up here and start earning cryptocurrencies for reading and tipping.
Presearch, 25 PRE start bonus, earn cryptocurrency for searching the web
FaucetCrypto, Earn small amounts of Cryptocurrencies for free
Learn more about the Ledger hardware wallet
