Solend

Lending

Solend is a money market protocol native to Solana that allows anyone to borrow and lend crypto assets.

Risk Rating
Watch Out
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
Solend enables users to borrow and lend tokens directly on its platform with low fees due to the high scalability of Solana.
What we like less
The team has significant control over user deposits with the ability to take over wallets in emergency situations.
What it means for you
You can earn significant yields on high-liquidity assets through its solid utilization and protocol incentives. Anyone can create a lending pool with recent launch of permisionless pools.
Information
Exploit/Hacks
None
Info
  • Website
  • Token: SLND
  • Tags: Lending
Key Metrics
  • TVL: $138.9M (Rank #46)
  • TVL Ranking by Lending: #11
  • Blockchain: Solana
  • Chain TVL
    • Solana: $138.94M
Risk Assessment
Watch Out
Protocol Code Quality
  • Code reviewed by at least one experienced auditor; Kudelski audited in September 2021
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Top 5% by total value locked reduces risk
  • Core contracts can be upgraded with just an EOA wallet
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Moderate voting power concentration
Protocol Design
  • No death spiral concerns
  • Solid controls to prevent oracle price manipulation
  • Secured lending market that uses a combination of isolated and cross-collateral pools depending on the individual asset serves to reduce risk
  • Solid controls in place to prevent risky borrowing
  • Basic mechanisms in place to incentivize liquidations
  • Basic method to accrue protocol reserves
  • Solend is the largest decentralized lending protocol on Solana
Things to know about Solend

How Solend works

Solend consists of a decentralized system of lending pools. Users deposit assets they want to lend into a liquidity pool and borrowers draw from the pool when they want to take out a loan. Solend borrowers must first supply assets before they can borrow. Given the high volatility of crypto assets, borrowers must post more collateral than the value of the loan, or commonly referred to as overcollateralization. Interest rates on Solend are driven by market supply and demand. To facilitate this activity, Solend issues cTokens to lenders that reflect accruing interest on the underlying token. Permissionless pools allows anyone to create an isolated pool on Solend.

How Solend makes money

Solend collects protocol fees from several sources. First, the protocol collects revenue from the interest rate spread, which is a percentage of the borrow interest rate. The fee varies depending on the underlying asset. For permissionless pools, the interest spread would be 20%. Second, an origination fee is charged upon the origination of a loan. This fee is broken down into a program and host fee. The program fee contributes to Solend's insurance fund. The host fee can be collected by any interface that refers loans to the protocol. The origination fee for most vaults is set to 10bps and there's an 80/20 split between protocol and host fee. Lastly, the protocol charges a liquidation insurance fee as a penalty on liquidations. The fee is currently 30% of the liqudation penalty. These funds go to the DAO treasury.

How you make money on Solend

You earn lending fees on Solend by depositing your idle crypto assets to be used by borrowers looking for leverage. Scream also offers additional protocol incentives in its native SLND token to bootstrap demand.