Lend and Borrow Process on Sendit

The following process outlines how to navigate the Lend and Borrow features on Sendit. This includes an overview of how the system operates, the benefits and risks involved, and the key terms one needs to understand. This guide will take you through each step required to successfully lend or borrow SOL using Sendit's platform, ensuring a comprehensive understanding of how to leverage your assets effectively.

Step 1

Gain an introduction to Lend and Borrow on Sendit, the core of our protocol. This video will cover six different parts. Firstly, we will introduce the lending and borrowing process.

Step 2

Next, I will demonstrate how the system functions. We will then explore the supply APR and the three sources of yield. Following this, we will discuss why one might choose to take a loan on Sendit. We will also address the risks to consider and finally, provide a summary of the information.

Step 3

At its core, Sendit functions as a money market, where individuals can lend assets to earn yield and borrow assets against their collateral. Within Sendit, meme coins or any SPL tokens can be used as collateral to borrow SOL. This page displays key data for each market.

Step 4

TVL, or Total Value Locked, represents the total assets deposited, including SOL and the market token. For instance, the value of Solana plus Nobody in the pool, or Solana plus Useless in the pool, etc. The Supply APR reflects the yield lenders earn for supplying SOL.

Step 5

APR stands for Annual Percentage Rate. This is the projected annual return if the rate remains constant for one year, expressed as a percentage. The Borrow APR is the cost borrowers incur when borrowing SOL. Lastly, Borrowed SOL indicates the amount of Solana currently borrowed from the market, while Available SOL shows the additional Solana available for borrowing.

Step 6

Let’s delve into how it works. Borrowers deposit meme coins as collateral to borrow Solana into their wallet.

Step 7

Conversely, lenders provide Solana to the market to earn returns.

Step 8

We offer two types of markets. Verified markets, where the price oracle is reviewed and verified, and all markets, where anyone can list a market with any oracle.

Step 9

When engaging with a market, you have three options.

Step 10

The first option is to supply Solana, depositing Solana liquidity into the pool to earn the supply APR.

Step 11

The second option is to take a loan.

Step 12

Essentially, you are using the market's token as collateral to acquire Solana.

Step 13

For instance, by depositing Nobody, you can see how much Solana can be borrowed.

Step 14

The third option is direct margin trading, using borrowed Solana to trade the market's token with leverage.

Step 15

You can adjust the leverage up to 3X, and once updated, view how much you can buy, the liquidation price, your net leverage, etc.

Step 16

Let's examine the supply APR and the three sources of yield. This represents the return as a Solana lender. The lending APR is determined by how much Solana is borrowed relative to what is supplied, dictated by a bonding curve. Higher utilization results in higher yield.

Step 17

As in any money market, a loan origination fee is charged whenever Solana is borrowed, with a 1% fee going directly to lenders over a fixed period. Additionally, token incentives can add extra rewards in native tokens to attract more Solana deposits. You can observe the difference in supply APR between the Nobody pool and the Useless pool.

Step 18

The Useless pool shows a high APR due to high utilization and some loan origination fee APR, but no token rewards for incentivizing Solana supply with Useless tokens. Conversely, the Nobody pool has a high lending APR, with minimal loan origination fee APR, but incentivizes with token rewards in Nobody form. Why consider taking a loan?

Step 19

Borrowing Solana offers several strategic advantages. You can purchase new tokens without selling others, maintaining exposure to meme coins while unlocking new liquidity. Additionally, you can go leveraged long, borrowing Solana to buy more of the collateral token and amplifying your position. For example, borrowing Solana against Nobody tokens to buy more Nobody tokens.

Step 20

Quickly access liquidity without triggering taxable events or losing exposure to desired assets, or engage in margin trading, using borrowed Solana to take direct market positions. However, keep in mind the associated risks. Borrowing inherently carries risks, primarily liquidation risk.

Step 21

If your collateral's value decreases, your position may be liquidated to repay lenders. Interest costs are another risk, as borrow rates can rise with market utilization, increasing loan costs. Additionally, in unverified markets, unreliable price feeds pose oracle risks, impacting positions.

Step 22

Token volatility is another concern. Meme coins can experience significant value swings, heightening liquidation chances. In conclusion,

Step 23

The Sendit money market connects borrowers and lenders. Borrowers unlock liquidity and new strategies by using meme coins as collateral. Lenders make their Solana work, earning yield through interest, fees, and incentives. This is the foundation of

Step 24

Sendit—a straightforward, transparent platform for borrowing and lending SOL, offering both opportunities and risks to consider.