Exploring SendIT: Solana Money Market

SendIT is a unique money market platform built on Solana that allows users to supply SPL tokens, including meme tokens, as collateral to borrow SOL. This process is structured with isolated pairs, ensuring that trades are executed with on-chain liquidity and avoiding the use of synthetic assets. The following steps provide a comprehensive overview of how different users can interact with the platform.

Step 1

SendIT distinguishes itself from previous iterations by only allowing long positions. Users can supply SPL tokens, such as meme tokens, as collateral to borrow SOL. However, borrowing meme tokens against Solana collateral is not possible. The platform operates with isolated pairs.

Step 2

Due to the volatility of meme tokens, each pair is isolated to protect the system from contagion. Additionally, trades are physically settled against on-chain liquidity, without the involvement of perpetual or synthetic assets. Understanding these features is crucial for effectively using the platform.

Step 3

The SendIT platform supports three user types: lenders, borrowers, and traders. Lenders supply Solana to individual pools.

Step 4

Lenders can also contribute to SendIT vaults, providing SOL liquidity necessary for borrowing against meme token collateral.

Step 5

Due to the isolated nature of pairs, lenders can either supply SOL to specific pools or allocate it to SendIT vaults, based on their risk preferences.

Step 6

These vaults dynamically allocate SOL to optimize yield. Borrowers deposit meme tokens as collateral to borrow Solana.

Step 7

Borrowers can choose to reinvest the borrowed Solana into their preferred main token or supply it to earn additional yield.

Step 8

This strategy is often profitable on SendIT due to multiple yield sources, which are further elaborated in other resources. Additionally, traders use Solana to perform margin trading on the platform.

Step 9

Traders can take long positions on any token available on SendIT with leverage up to 3X.

Step 10

This step provides insight into SendIT's functionality and the liquidity flow within the system.

Step 11

One important aspect of the protocol is the liquidation process, which occurs if borrowers fail to repay their collateral. Each borrowing activity adheres to a loan-to-value (LTV) ratio of 70%.

Step 12

Borrowers have the flexibility to adjust their risk profiles by selecting a more conservative or aggressive LTV ratio.

Step 13

SendIT employs a proprietary liquidation system that activates when the LTV reaches 75%. The platform aims to minimize liquidations by partially liquidating positions to avoid incurring bad debt. Loans are denominated in SOL, which mitigates liquidation risks during market downturns due to the co-decline of the denominator.

Step 14

On October 10th, despite significant pool utilization and market downturns, only minor loans were liquidated, showcasing the protocol's effectiveness without incurring bad debt. For more in-depth understanding, refer to our other videos to learn how to navigate the platform according to your requirements.