Solana is a fast, secure, and censorship-resistant blockchain providing the open infrastructure required for global adoption. It is by far one of the fastest blockchains out there, with 400ms block time and currently 60,000+ TPS.
For this article, we’ve taken a look around the Solana ecosystem and have selected the top 7 projects that we find most interesting right now. So, let’s dive right into it.
Raydium is a DeFi (Decentralized Finance) application and works as an on-chain order book AMM (automated market maker) to power the evolution of DeFi. Unlike many other AMM platforms, Raydium provides on-chain liquidity to a central limit order book. That means that the users and liquidity pools of Raydium can access the order flow and liquidity of the entire Serum ecosystem and the other way around.
On Raydium, it is also possible for liquidity providers to generate rewards from trading fees for contributing. Key pools are incentivized with $RAY assets as farming rewards. Projects that like to reward users for providing liquidity can also add extra reward tokens.
Interestingly, as the platform progresses, it aims to partner with other DeFi and AMM communities and provide support to build out their products on Solana. That will make sure that more liquidity is added, and more and more DeFi protocols will be brought to the Solana ecosystem. Through these additions, Raydium can incorporate additional flexibility and function for future versions and new features.
Its main features are as follows:
- Orderbook: Through the power of Serum, Raydium brings Orderbooks to AMMs. Leveraging liquidity provided by Serum, Raydium provides users options to place Limit Order, Market Order, etc.
- Raydium DEX: Similar to other AMMs, Raydium allows market participants to make transactions using liquidity provided by its own pools. It aims to serve trading activities between less traded assets. This feature allows users to swap their tokens without the need of orderbooks while enjoying cheap gas and low trading fees.
- Pool: Similar to other AMMs, Liquidity providers will be able to earn rewards for contributing liquidity. Key pools will be incentivized with RAY tokens. Recently, Raydium has introduced permissionless pools, enabling anyone to have the ability to create tradable AMM pools. With that being said, the permissionless pool launch will create extremely solid liquidity for Raydium’s community.
- Farm: Raydium farms are liquidity pools that allow liquidity providers to generate RAY tokens as farming rewards in addition to the trading fees contributed to the pool.
- Staking: If you’re holding RAY tokens, staking is an easy way to earn additional RAY.
- AcceleRaytor: AcceleRaytor serves as a launchpad for the latest Solana projects to raise capital and drive initial liquidity.
- Dropzone: an initiative by Raydium to promote the growth of NFTs on Solana while supporting project teams with the infrastructure needed to launch new collections.
Why is Raydium different?
Raydium offers a few key advantages:
- Faster and cheaper: Raydium leverages the efficiency of the Solana blockchain to achieve faster transactions and much lower gas fees.
- Access to the ecosystem-wide liquidity from Serum: Other AMM DEXs and DeFi protocols are only able to access liquidity within their own pools and have no access to a central order book, meanwhile Raydium is an AMM built for the Serum DEX, meaning that Raydium allows access to the order flow and solid liquidity of the entire Serum ecosystem. It solves the problem of high slippage and liquidity shortage experienced in big transactions. Market participants now have the ability to express the number of tokens they are willing to trade at any price.
Ray Token – RAY
The Raaaydiun Exchange native token, RAY, is used for the following:
- Governance voting for protocol decisions making.
- Staking for the release of IDO allocations.
- Staking for protocol fee earnings
Serum is a decentralized exchange where people can purchase crypto. Within its structure lies the Serum exchange. Serum comes to play when you need to exchange cryptocurrency as it has the highest speeds and transaction costs to complement its already established model. The model was built on Solana and it’s open to almost anyone who wants to participate.
The crypto derivate forum FTX was founded by Sam Bankman-Fried. A cryptocurrency entrepreneur who ranked on the Forbes 500 list just over a year ago. Serum has already attracted attention from 100 projects from DeFi, Web making it the ultimate blockchain to date. Serum brings a few noteworthy improvements exceeding existing blockchains like Ethereum or Chainlink.
However, Serum is not ideal in any way. The network at this moment lists only 15 tokens accompanied by their corresponding pairs lagging behind many other exchanges. The token list is narrowed to only the most popular digital tokens like Bitcoin, Ethereum, Raydium, and Chainlink.
What are the problems that Serum is trying to solve?
Serum was created to solve the centralized vulnerabilities existing in the current DeFi space:
Speed and Usability: DeFi is slow and expensive. It costs dollars to finish a transaction and minutes for it to go through. To bring DeFi closer to users, DeFi has to be easier and cheaper to use. Customers prefer fast and cheap execution of exchanges where they can just make transactions in seconds, cheaper than banks or other financial institutions without staring at their wallets, waiting for a trade to be confirmed and missing opportunities.
Centralization: Most DeFi projects rely on centralized oracles to collect sources of data. The main problem with centralized oracles is they are controlled by a single entity and act as the sole provider of data for a smart contract. They require contract participants to place a significant amount of trust in them. Therefore, centralized oracles themselves can become compromised and susceptible to manipulation. The thing is, users want pure DeFi. The options out there in the market are few only.
Stablecoins: USDT, USDC, and similar tokens are great projects. However, they are fully backed by Reserves – which are fundamentally deposited in banks. In case of bank insolvency, how will prices of stablecoins be determined?
Orderbooks: Available Dexes on the market right now allow users to trade using their trading pools. There are a few disadvantages to AMM, though. Users cannot provide liquidity unless they provide both sides; there are no limit orders or even bids or offers. Therefore, users cannot buy/ sell at a price other than the current market price. Users need limited orders to protect their assets.
Cross-chain Support: Cross-chain interaction between chains generally requires third-party services – synonymous with centralized systems. The ability of different decentralized networks to communicate with one another without any intermediaries should be mandatory for users to access pure DeFi.
Serum’s native token, SRM, has the following functions:
The Serum token is the utility token of the Serum ecosystem. Serum is both natively on the Solana blockchain (as an SPL token) and available on the Ethereum blockchain (as an ERC20 token). SRM is anticipated to hold the following utility:
Buy/ Burn activities: All of the net fees on Serum go to a SRM burn.
Transaction fees: Fees may be made payable with SRM. Holding SRM gives one up to 50% off of all fees on Serum. Holding 1 MSRM gives a 60% discount on fees
Governance: Serum is anticipated to include a limited governance model based on the SRM token. While most of the Serum ecosystem will be immutable, some parameters without large security risks (e.g. future fees) may be modified via a governance vote of SRM tokens.
Staking Rewards: SRM can be staked on a node. Each node must have at least 10,000,000 SRM, and must include at least one MSRM. There will be a fund of SRM that will be distributed as staking rewards to each node.
Bonfida is another network building on top of the Serum and Solana ecosystem. The platform offers a complete product suite that helps bridge the gap between Solana, Serum, and its users. Additionally, Bonfida brings data analytics to Solana with their API, which is used by some of the largest market makers in the space and has seen a significant growth rate during its existence.
Why build on Serum?
An order-book DEX has to be fast. To have a responsive platform, the underlying blockchain has to meet certain requirements. There are the reasons why the Bonfida team has chosen Solana and its DEX Serum as a foundation for their project.
- High transaction throughput – Solana has the ability to facilitate more than 50,000 transactions per second. This will increase further as the chain grows
- Lower gas costs – Gas costs on averages less than $0.001 per transaction
- Composability – Given that the Serum protocol is open-source, anyone in the community can work on developments that could add value to the ecosystem
- Decentralization – Transactions and storage of crypto holdings are entirely free from any third-party control
Users will have to set-up a compatible wallet to connect to the platform, which requires SPL (Solana Program Library) tokens. The three options are https://bonfida.com/wallet, solongwallet.com, sollet.io Don’t forget to keep some spare $SOL tokens to pay for fees!
Exclusive markets and listing
Bonfida has access to exclusive markets on Serum. $FIDA holders (more on $FIDA token later) can vote on which listings will be available on the platform. Market makers ensure liquidity through the help of partnerships with organizations like Alameda Research.
On-chain advanced order types
Both Limit and Market orders are already available on Serum while others like take-profit and stop-loss are currently being developed on by Bonfida. However, advanced on/off chain order types will require users to keep their $FIDA staked.
Order Placement through TradingView Charts
Bonfida is the first to have TradingView charts linked to on-chain data; users will be able to place orders through them.
Advanced UI and Basic UI
To accommodate both basic and advanced traders, Bonfida will have two trading modes for Serum. The advanced mode will have features like ‘Bonfida Bots’ and the aforementioned advanced order types.
The FIDA Token
$FIDA is Bonfida’s native utility token. It is mainly used to pay for gas fees on the platform but it can also be used for the following purposes.
- Access to VIP API
- Bot payments
- Consulting services (for people who want to get started on Serum)
ORCA is an automated market maker (AMM) decentralized exchange (DEX) with its own liquidity pool. Traders can use Orca to swap tokens, and crypto enthusiasts and project supporters can create their own Orca liquidity pools.
Orca is one of the top Solana projects and takes advantage of the inherent benefits of the network. The exchange allows fast trades that take less than one second, and the gas fees are around $0.00002. To incentivize liquidity providers (LPs), the exchange rewards 0.3% of the trading fee to the liquidity pool.
Orca has three main features for cryptocurrency investors and traders:
- Token Swaps: Users can use Orca to swap tokens, using the DEX’s liquidity pools
- Liquidity Pools: LPs can contribute to the pools and receive a percentage of the trading fees generated by swaps
- Yield Farming (Aquafarm): Some of the liquidity pools on Orca will become Aquafarm, allowing LPs to earn trading fees and ORCA tokens. Other projects will be able to add their tokens in the future.
What makes Orca different?
Fully audited: Orca uses the token-swap smart contract, which is fully audited and available for anyone to integrate with. Communities/ projects/ market participants can freely create and trade on custom Orca pools.
Speed and low fees: Built on the Solana blockchain, Orca allows lightning-fast swaps and low fees (~1 second settlement, ~$0.00002 gas fees). To LPs, the 0.3% trading fee automatically goes into liquidity pools after every swap.
ORCA Token Use-cases
- Utility: Liquidity providers earn a portion of fees in exchange for the opportunity cost of providing capital or impermanent loss.
- Governance: Currently, 0.3% of all trades on product pools go to liquidity providers. Once the governance token is issued, the distribution will be adjusted as follows:
- 0.25% for Liquidity Providers.
- 0.04% for Orca Treasury.
- 0.01% for Impact Fund.
Orca raises $18M from Polychain, Placeholder, Three Arrows, and more
Saros Finance is a DeFi Suite consisting of multiple products, namely SarosSwap (AMM), SarosFarm (Pool), and SarosStake (Stake), with SarosSwap being the core element. More building blocks are expected to be created in the future.
What makes Saros different?
Saros Finance attempts to resolve the existing obstacles on Solana by providing various features, such as:
- Permissionless: Allow everyone to create a liquidity pool on SarosSwap.
- Capital Efficiency: Increase Capital Efficiency by providing more optimal price offers.
- Friendly UI/UX: Provide a user-friendly interface.
- Low Cost: Minimize transaction fees.
- Scalability: Offer high transaction speed with low latency.
- Composability: Ensure high performance without having to sacrifice security and decentralization.
Currently, Saros Finance offers 4 products as mentioned above. Now let’s go through all of them.5
SarosSwap is an AMM using the conventional price formula: x*y=k. By implementing this simple model, builders can worry less about liquidity problems and focus more on product development.
Then how can SarosSwap stand out compared to other AMMs on Solana? The team believes in 2 innovative ideas: A hype-generation machine to provide the best price possible and the Gamification feature to diversify the product.
Bootstrapping early liquidity after launching projects has been a major problem for Solana projects. By holding Liquidity Mining programs, they can attract more liquidity providers. However, this leads to the fact that Liquidity Providers have to be constantly looking for those programs without being able to stay in one place.
SarosFarm solves this problem as it is an aggregation platform for a wide range of incentivized pools. By using SarosFarm, not only can projects develop easily and rapidly with rich liquidity, but Liquidity Providers can also have an all-in-one station for farming.
SarosStake works in a rather simple way: You can stake SAROS to earn more tokens. This feature is extremely useful for believers in the project who have the intention of holding SAROS for a long time.
Instead of leaving SAROS tokens idle in the wallet, users can stake them and gain various benefits.
Saros Finance was invested by multiple well-known ventures, namely Alameda Research, #Hashed, Spartan,…
Saber is the leading cross-chain stablecoin exchange on Solana, providing the liquidity foundation for stablecoins, or a cryptocurrency whose value is pegged to another asset.
As Solana’s core cross-chain liquidity network, Saber facilitates the transfer of assets between Solana and other blockchains. Market makers deposit crypto into a Saber liquidity pool to earn passive yield from transaction fees, token-based incentives, and eventually automated DeFi strategies.
Built on Solana
Built on Solana, Saber leverages Solana’s key advantages: low costs and immediate transaction settlements. Users can experience almost no delay when trading.
Saber Labs has raised a $7.7 million seed round. The funding was led by Race Capital with the participation of Coin98 Ventures, Chamath Palihapitiya’s Social Capital, Jump Capital, Multicoin Capital and Solana Foundation, among others.
Saber Token – $SBR
SBR Token has 2 main use cases:
- Utility: SBR Holders can receive SBR as rewards for providing liquidity to pools.
- Governance: SBR holders will have voting power within the Saber DAO.
Mercurial Finance is building the first dynamic vaults for stable assets, providing low-slippage swaps for stable coins and forex pairs, allowing liquidity providers to leverage dynamic fees to improve LP profits as well as assigning power to users/ communities to participate in making decisions through its DAO program.
Dynamic Vaults, Yield Programs and DAO Program
Allocation of assets deployed to external platforms like lending protocols will be managed by Yield programs to earn additional interest and yield. This management also includes interest and yield collection.
These yield programs will need to be approved by the DAO before they can send capital in the vault to external platforms. The % of deployable assets will also be determined by the DAO for each vault.
Deployment to external platforms includes flash loans, collateral for lending platforms, leveraged stable lending. Platforms will be selected based on the returns, risk profiles, and ease of retrieving liquidity.
New programs can be added to existing vaults to improve the earnings of the base capital.
DAO Program: The DAO will decide key decisions include:
- Base fees and commissions: From the swap and vault operations.
- Usage of the fees: Whether the fees will be burnt or distributed.
- Deployment destinations: Where capital can be deployed to.
- Max loan to liquidity ratio: The maximum amount of capital that can be externally deployed per vault.
Along with seed investors such as Alameda Research, Solana, HuobiGlobal and OKEx, Mercurial Finance also has a set of long term, high value adding investors led by DeFianceCapital, imToken, Signum Capital, Coin98, gate.io and many others.
Merucial Token – $MER
MER token will be used for 2 main use cases: Utility & Governance.
Utility: Mercurial Protocol is designed to have a wide range of mechanisms for accruing value to MER holders.
- Fees from swap: MER holders will get a portion of the swap fees, also will benefit from activities of buy and burn MER tokens.
- Commission: MER holders will get commissions as the interest and yield accrued by the vault.
- Collateral for synthetic stables: MER holders can use MER tokens as collateral to mint synthetic and other stables.
- Governance: MER Holders will govern key parameters such as swap fees, strategies used to maximize yield for the vault, etc.
- Vote on collateral for synthetic stables: MER holders will vote on new synthetic stable assets as well as new types of collateral.
- Liquidity rewards: MER tokens are used as rewards to liquidity providers and stakers.
- Insurance Pool: MER tokens could be used as a part of insurance to cover losses from unexpected events that pegged assets have high volatility.
Solana projects are disrupting the crypto market
Since the launch of the network’s mainnet in March 2020, many interesting and viable Solana projects have been launched on the network. The hundreds of projects on Solana choose this platform because it is a scalable blockchain solution with cheap transaction fees.
The success of the Solana projects drove the price of SOL to a new all-time high price in November 2021. The cost-efficiency of Solana brings more Dapp developers every day to the network, widening its ecosystem and growing the overall Solana community.
DISCLAIMER: This is not financial advice. Staking, delegation, and cryptocurrencies involve a high degree of risk, and there is always the possibility of loss, including the failure of all staked digital assets.
Find more information about DEX on Solana:
Mercurial Finance: https://mercurial.finance/
If you have any questions, comments, suggestions, or ideas about the project, please email [email protected].