According to data from DeFi Llama, DeFi TVL across all smart contract platforms today stands at ~$274 billion. Out of this, close to $183 billion is locked in Ethereum-based DeFi platforms while the figure for Solana-based DeFi stands at almost $15 billion.
That being said, Solana is quickly gaining traction and witnessing rapid adoption due to the problems faced by Ethereum users such as low latency, and more importantly, high gas fees. Solana provides a feasible alternative to Ethereum with its negligible transaction fees and high throughput. In the coming months, it is expected that the difference between Ethereum and Solana’s DeFi TVL will lessen as more users flock to the latter.
While the Solana DeFi ecosystem boasts of several quality projects such as Serum, Orca, and Mango Markets, among others, there is a surprising lack of a reputable DeFi borrowing and lending platform, something like what Aave is for the Ethereum DeFi ecosystem.
This is where Jet Protocol (JET) fits in.
In this article, we take a deep dive into the Jet Protocol, a lightning-fast, low-fees, innovative DeFi lending and borrowing platform built on Solana.
What is Jet Protocol?
Simply put, Jet is a decentralized borrowing and lending protocol that leverages Solana’s high-throughput and low latency to offer a highly capital efficient trading product to users.
Jet works like the vast majority of other DeFi lending and borrowing protocols such as Aave, Compound, and others in that it allows users to deposit their digital assets to lend and receive interest. In addition, users can also mortgage their assets to secure loans and pay interest on the same.
However, unlike the aforementioned protocols, Jet is built on the highly scalable Solana blockchain. Being powered by Solana brings a multitude of benefits for Jet and its users.
Jet addresses several problems facing the DeFi industry today such as the cost of transactions, the inefficiency of siloed assets across different chains, and the low latency on other chains that results in poor price discovery of complex derivative assets, liquidations on loans, and other issues.
Jet leverages Solana to enable rapid automated position management for digital asset holders across its platform. In addition, Jet is expected to launch a series of complex structured risk products on Solana revolving around the senior/junior debt proof of concept that the project unveiled in the first Solana wormhole hackathon in November last year.
What Does Jet Bring to DeFi?
Jet Protocol promises to bring a whole suite of innovative and robust offerings and services to the Solana DeFi ecosystem, as illustrated in its white paper.
The current Ethereum DeFi space suffers from several core problems due to the network’s low throughput, high gas cost, and inefficient liquidity management. Jet aims to address all of these issues via Solana’s high computational energy coupled with rapid oracle solutions.
Jet explains this by saying:
“To put it plainly, with Solana’s throughput, the protocol can ingest data quicker, rendering price and interest updates more frequently during times of market volatility, propagating actionable data across the network to all market participants in seconds. And inversely, during periods of inactivity, the protocol relaxes.”
Jet offers greater capital efficiency compared to its Ethereum-based competition via its rapid oracle price feeds that make it possible for Jet to lower the collateralization ratios for some digital assets.
In addition, Jet will tap Solana-based Serum decentralized exchange’s (DEX) on-chain order books that will allow for more orderly liquidations on the protocol compared to a standard, run-of-the-mill liquidation bot.
Making DeFi Easier for All
In addition to its tech prowess, Jet features a sleek, intuitive user interface that hides all the ‘nuts and bolts’ of DeFi from the user and only allows them to interact with an easy-to-use interface.
Jet realizes that the key to mass adoption for any product or service is the low knowledge cost of entry and in that regard, Jet aims to keep its user interface as simple as possible without compromising on the protocol’s offerings.
For instance, the ‘Cockpit’ allows users to view all their crypto assets in one place and explore features such as borrowing, lending, repaying, and others.
Moreover, Jet offers a dark more for ease of accessibility and usability.
Jet Tokenomics and Conclusion
While the total supply of JET tokens is fixed at 1.7 billion, the vast majority of them are locked up for a long time, for example, around 3 years. The initial circulating supply is set at 156,257,200 JET of which none have been unlocked for the team, advisors, seed investors, and follow-on investors.
The tokenomics of the project clearly indicate a community-first approach and with a current market cap of $50 million, there seems to be a long way to go for Jet if it is to give competition to its Ethereum-based rival Aave which sits at a market cap of more than $3.7 billion.
To conclude, Jet looks poised to claim the title of the premier DeFi lending and borrowing protocol on the Solana blockchain, and with its experienced team at the helm, and community-driven growth, the sky’s the limit for Jet.