Introducing Jet V2 Beta: Live on Mainnet
Capital efficient lending & borrowing powered by Jet’s new margin accounts. Flexible. Efficient. Powerful. Live on Mainnet! Read more to learn about why Jet’s margin accounts are a powerful new on-chain primitive!
Evolving The Lending Pool Models
Jet launched V1 in Fall of 2021 with the intention to empower Solana DeFi participants to leverage their assets using the cross-margin model of pooled borrowing and lending. This “pooled lending” model is used by many of the biggest lending and borrowing protocols across the entire DeFi ecosystem. However, this model is hindered in terms of capital efficiency and is lackluster at scale. Pooled lending has several drawbacks:
- Lending pool rates are determined by utilization-rate curves.
- These rates fluctuate and prevent borrowers and lenders both from having any predictability in their interest payments and earnings, respectively. Rates fluctuate as utilization increases
- Lenders have little to no guarantees that they will be able to withdraw their funds under high utilization.
- There are no loans with both a predetermined duration and direct mechanism for enforcement.
By incentivizing depositors and/or borrowing with liquidity mining rewards, which on a long enough time scale create problems for the DAO’s treasury and token, the cross-margin pooled model does not really replicate any debt/credit system that is useful beyond speculation and farm-and-dump use cases.
Jet never did any sustained or ongoing liquidity mining incentives regardless of the market cycle. It was important to distribute tokens to early users and supporters of the protocol who did specific actions which bolstered liquidity, but in terms of a loss-leading strategy, it has never been proven a sustainable option.
Jet continued upward with a vision for a better, fairer, and more innovative blockchain-based borrowing and lending with Jet V2 Beta.
Jet V2 Beta – Lending & Borrowing powered by Margin Accounts
Jet V2 Beta will begin captaining the flight path to more powerful DeFi with the launch of its cross-margin lending, followed by margin trading across protocols and then followed by a fixed-term fixed-rate bond market. Lending and borrowing on Jet V2 Beta is powered by margin accounts designed for maximum flexibility and enable cross-protocol-collateralization with adapters.
Jet margin accounts are a hub for all borrowing and lending activities not only for Jet products - but across the DeFI Solana ecosystem thanks to adapters. In Jet V2 Beta, a Jet Margin account will connect you to margin lending and borrowing via the traditional lending pool approach to cross-collateralized lending and borrowing. In the coming months you can expect to see the Jet margin account ecosystem grow to enable margin trading on Serum on the Jet App as well as potentially on other platforms. Additionally, Jet is already well into the implementation of a fixed-term fixed-rate bonds market that will offer an option in addition to the pooled lending approach; in addition to enabling credit swaps, and any other DeFi protocol via adapters.
Upon the launch of V2 Beta much of the front end of the Jet app will continue to appear nearly the same as V1 however, the back end functionality has been completely swapped out with the new margin accounts. Jet is open source as always and the code can be examined at https://github.com/jet-lab/jet-v2.
Benefits of Jet V2 Beta and Cross-Protocol-Collateralization
- The same familiar interface will allow users to migrate their liquidity from the V1 program to their to the new and improved Jet margin accounts
- Margin accounts designed for maximum flexibility enable cross-protocol-collateralization with adapters
- Trade and swap on other protocols (ie: margin trading on Serum) and have it count towards collateral in your Jet margin account
- Jet V1 will be deprecated and users are encouraged to move liquidity off as soon as possible
- Risk management is no longer based on a C-Ratio
- Instead of a c-ratio, the application displays a “risk level” to users which informs a user about how close they are to liquidation on their positions.
- This “risk level” ranges from 0 to 1 with 0 representing no risk (i.e. no positions open), and 1 being the threshold for liquidations to begin.
- The risk level figure is based on a composition of each asset’s parameters and includes the “collateral weight” and “max leverage” parameters of each individual asset. More details will be published to the Jet docs, which can be found at https://docs.jetprotocol.io/jet-protocol/
- Collateral weights and leverage parameters provide improved risk mitigation and permit Jet to allow more niche and esoteric collateral/asset types to be added without increasing risk (for example, by de-emphasizing the amount of an asset’s “value” that contributes towards collateral).
- The ability to add an unlimited number of asset types to the platform which can be traded and swapped (with leverage) on other protocols from the Jet interface.
- New and improved liquidator liquidates not only Serum liquidation, but also Orca swaps as well as having upgraded liquidation logic that ensures unbiased liquidation.
New Assets Onboarding
Through JetDAO, Jet Protocol will be able to onboard new assets to Jet V2. Jet V1 only had USDC, SOL, and soBTC available on the protocol, but through JetDAO governance the community of JET holders and users of the protocol have moved forward and voted on the backlog of asset onboarding applications. Community members, $JET token holders, Solana DeFi participants, & protocols are encouraged to complete the asset onboarding application for any asset they wish to see onboarded onto the protocol.
Jet V2 - Margin Trading and Bond Markets
The roadmap continues through this summer and is focused on shipping the next round of Jet products to complete V2: margin trading on Serum and bonds. Jet will be able to evaluate creating more adapters for cross-protocol-collateralization to seamlessly integrate other protocols such Serum, Orca, and other innovative Solana DeFi protocols. Cross-protocol-collateralization will allow users access to more assets for use in Jet’s V2 products and seamless access to their favorite protocols. Look out for product releases over the next couple months! If you’re a builder and interested in collaborating - get in touch with Jet below!
Get In Touch
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