Many consider dApps (decentralized programs) as one of the most crucial ways the masses can leverage blockchains. dApps have advanced rapidly in recent years, with developers launching everything from P2E games to DeFi protocols, spurring a surge in user interest.
Nevertheless, a predicament exists. Most of the dApps are powered by Ethereum, which has struggled to keep up with the surge in demand, resulting in network congestion and mounting transaction costs. Consequently, Solana dApps intends to address this deficiency in light of Ethereum’s current obstacles.
With thousands of projects covering DeFi, NFTs, and other Web3 use cases, Solana is one of the leading blockchains of the burgeoning crypto landscape. Before diving into Solana’s top 3 DeFi dApps, let’s briefly look at the reasons why Solana is continuing atracting developers that want to build with them
Why Build dApps on Solana?
The Solana community offers comprehensive tools for new consumers unfamiliar with the Solana dApp development process. The following lists some advantages of building on Solana:
- Fast transactions
- Low cost per transaction
- dApps built on Rust
Now that we are familiar with the advantages of building on the Solana platform. Let us dive into the top 3 DeFi dApps on Solana.
1. Marinade Finance
Marinade Finance is bringing a new level of efficiency and security to the high-stakes game of staking by offering a seamless way for users of Solana tokens to collect staking benefits without locking their funds.
Previously, transferring ownership of tokens was typically necessary when staking or borrowing them. However, this is no necesary with Marinade Finance. Using the asset mSOL, representing the future right to hold SOL, staking and borrowing are now possible without relinquishing ownership.
So, staking your SOL with Marinade Finance will earn you mSOL (marinated SOL) tokens, which you can use for DeFi loans, collateral, and more, all while continuing to make the yield on the base SOL.
The price of mSOL mirrors that of SOL, and unstaking can be done instantly for a nominal charge or for free if you’re prepared to wait for 1 or 2 epochs (instead of the traditional 1-3 days). Additionally, it’s non-custodial, meaning your coins are never away from your control.
Moreover, Marinade Finance also handles picking a verifier by using an algorithm to select one from the top 20% most trustworthy based on their ranking system. The Marinade DAO controls the protocol and the treasury. Owners of MNDE, Marinade Finance’s native governance currency, have had a say in the protocol’s future direction since the fourth quarter of 2021.
Besides, voting requires MNDE token users to secure their token for 30 days, effectively turning it into an NFT voter registration card. The NFT unlocks features like the Marinade Slack, DAO, and gauge-based control allocation. When users of NFTs give their approval, the regulations are implemented on-chain using smart contracts, making them publicly accessible and auditable.
The foundations of Marinade Finance and their DAO are extreme openness, a lack of vanity, getting things done, and collaboration over competition. Their history and roadmap have a proven track record and ambitious plans for the near and distant future.
Have some idle $SOL sitting around in your wallet? Stake it for $mSOL!
You can swap it on the market or unstake it instantly anytime.
Or deploy it in a variety of DeFi use cases.
Stake here: https://t.co/KrMRUaAwul
— Marinade Finance (mSOL, MNDE) (@MarinadeFinance) March 8, 2023
- A 2% charge on incentives (one of the lowest in the industry)
- You can free your stake, get a tokenized version of your position, and then use it in DeFi
- Open-source, permissionless delegation formula with over 450 validators.
- Stake and unstake with a delay at no extra cost.
- Uncertain Regulations and Enforcement Actions.
- Smart contract risk.
- Impermanent loss risk.
Next on the list is Lido, a Liquid Self-Staking protocol that allows users to stake digital assets on a Proof of Stake (PoS) network while keeping access to those assets and simultaneously maintaining the liquidity of their funds.
Staking is a breeze with Lido for Solana, and you get even more value from it with stSOL. To participate in Lido, holders of SOL tokens must first link their wallet and deposit their tokens in Lido. Users will immediately receive stSOLs that represent a share of the total pool.
SOL to stSOL in one click ⚡️
You can now stake your $SOL with Lido in one click using the @slope_finance wallet!
Earning yield on your SOL and securing the network has never been easier. pic.twitter.com/dADDKwlyKK
— Lido on Solana (@LidoOnSolana) June 29, 2022
Under the layer, the Lido Program evenly shares this SOL among validators participating in the Lido Program. Moreover, the value of stSOL coins rises as the total SOL under pool management expands thanks to the accrual of incentives on the allocated stake by these delegations. The Lido DAO oversees the Lido Program and its list of validators.
Interestingly, the waiting time for receiving stSOL tokens is absent. In contrast to conventional staking, users delegating SOL tokens do need to perform or wait for the completion of any delegation or activation steps. The individual can trade their stSOL for SOL on the open market anytime. For Solana, the success of Lido rests on the shoulders of the Lido DAO’s administration, a crucial part of the ecosystem.
Liquid staking is a game-changer in DeFi. With @LidoFinance, you can stake your $SOL to receive $stSOL 💸
This allows you to:
1. Earn APY on $SOL
2. Use $stSOL in @solana DeFi
Here's a deep-dive into Lido and their liquid staking👇https://t.co/tvvYejwS4Q
— Hubble Protocol (@HubbleProtocol) June 1, 2022
- Deposit into the pool with a single click
- The pool handles diversifying the group of validators.
- Earn from the pool from the moment of deposit.
- Smart Contract Risk
- If the primary network, like Ethereum or Solana, were hacked, Lido and its stakers would lose money.
- The adoption rate of the Lido Platform will determine the price of and demand for Lido’s derivative tokens.
- If a node operator create problems on the network, the whole infrastructure could be liable for slashing penalties.
Last on our list is Solend, a Solana-based lending protocol launched in June 2021. Solend attracted a whopping $100 million in deposits in just over a month after its debut. It guarantees inexpensive fees and a lightning-fast protocol, opening up opportunities.
Solend’s algorithmic lending and borrowing enables people and organizations to lend various assets with little to no friction. This fund is borrowable for different purposes, including margin trading and decentralized finance applications.
Solend has been battle-tested countless times since launch, from network outages to spectacular blowups.
These have led to learnings which have been combined to produce an improved lending protocol, Solend V2.
The litepaper is live now: https://t.co/R52xeSJcKf pic.twitter.com/1ZSawIGwIP
— Solend 2️⃣ (@solendprotocol) March 2, 2023
The lender receives benefits not only in the form of SLND tokens, the native tokens of Solend, but also as interest based on yearly percentage returns, similar to traditional loans. Furthermore, the community governs the entire listing process, in sync with the philosophy of DeFi.
- Wrong feed by oracles
- Vulnerability of smart contracts
- 100% utilization of funds
- Large, single borrowers
- Low Transaction fees
- Ability of extension
- User-friendly and easy-to-use dashboard
- Receive a portion of the interest automatically calculated by the algorithm.
In conclusion, Solana has quickly become a popular blockchain platform for decentralized finance (DeFi) apps, with many exciting projects emerging. Among them, three dApps are some of the most promising and innovative projects in the Solana DeFi ecosystem.
Overall, these three dApps highlight the power and potential of Solana’s blockchain for DeFi applications. As the platform continues to evolve and more projects get launched, it will be exciting to see other innovative solutions emerge.
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