Everlend Finance is a decentralized lending and borrowing protocol built on Solana. Much more than that, Everlend is an aggregating protocol for many protocols offering decentralized lending and borrowing.
There are many Lending and Borrowing products available on Solana, and and each one has their advantages, disadvantages and differing choices of operations when compared side by side.
With Everlend, you don’t need to make a hard choice of picking one over the other as the tradeoff might not be favorable. The aggregation of these money markets by Everlend Finance enables you to earn higher rates on your assets that are being deposited on the platform. This also gives users access to lower interest rate for any asset borrowed.
In this beginners guide, you will learn the basics of Everlend Finance, including it’s main benefits and use cases. We’ll also discuss why the team chose to build on Solana, and how it compares to the present lineup of DeFi protocols.
A tool like Everlend creates a level ground for anyone in accessing their basic right to lending and borrowing without any discrimination. It is a cross-chain protocol solution that makes it possible for its users to perform their financial activities without being limited to any particular chain.
By leveraging the Wormhole Bridge, Everlend is able to create a decentralized platform which allows people to use the native tokens built for other different blockchains.
To put this into perspective, think of Ethereum.
If you want to lend or borrow assets on the network, you would have to factor in the high fees to pay especially during moments of a clogged network. Instead of carrying out these trades on Ethereum, you can use Everlend Finance to trade native Ethereum assets without the disadvantages that accompanies transacting the chain.
Currently, only the lending aspect of the protocol has been built and is functioning as intended. According to the roadmap, the borrowing feature will come to life as scheduled.
Solana is one of the fastest layer 1 blockchains ever created. One of the main benefits of building on Solana is that the network is capable of handling thousands of transactions per second at ridiculously cheap gas fees. In fact, transaction fees on Solana are over 1000x cheaper than their Ethereum counterparts.
By building Everlend on Solana, anyone interested in performing lending services in a decentralized way wouldn’t have to bother themselves about hinderances and inconveniences like very high transaction fees or a slow network.
Governance and Risk Framework with Everlend Finance
It’s important to evaluate potential risks before participating in a Decentralized Finance system such as Everlend. Minimizing your risk exposure allows you to make smarted decisions when investing.
Since any lending protocol will be able to incorporate with Everlend Finance, there should be a way to manage the risks that Everlend will be exposed to. For example, faults with third-party protocols that have been included to Everlend could affect the protocol overall. Luckily, Everlend has determined ways by which risks will be assessed and have been very transparent in disclosing that to their users.
By using the Mars Risk Framework developed by Delphi Labs, the Smart Contracts of these protocols are evaluated for bugs or potential bugs. Some of the things that Mars Protocol evaluates are:
- Market Risk
- Smart Contract Risk
- Counterpart Risk
Quoting from the Mars Protocol’s Medium article:
The Risk Framework scores all assets on a spectrum. The riskier an asset is, the greater the limitations the protocol imposes on that asset. For example, riskier assets have higher liquidation bonuses and lower optimal utilization targets. In that way, it allows the protocol to support riskier assets without jeopardizing the overall health of the protocol.
How to use Everlend Finance
This section makes a brief description of the features you will come in contact with while making use of the application.
On the homepage is nice user interface that shows a data chart for the assets and their proportion deposited in the platform. The total number of accounts created by the users is 642 while the value of the cryptocurrency deposits is approximately $393,900. The total returns earned on the assets deposited is approximately $2,700.
In this section, all the tokens available for asset deposits are listed according to the value in their vaults. The most valuable vault, USDC is placed at the top of the list and it is followed by the next most valuable vault which is the FTX token.
In the portfolio section, your assets are displayed for you in a presentable format. It is currently empty because I have not initiated any transaction with my wallet.
Depositing USDC on Everlend
After your wallet has been connected to the application, you can select the token you want to lend out by clicking on it from the MARKETS list. I made a $100 deposit from my account. You can use slider button for easier experience. Click Deposit.
Wait for like a second or less after approving the transaction from your wallet.
If everything works as intended you will get the success notification. If not, your transaction has failed and you need to try again.
Some SOL too?
Let’s make some more deposits. I also decided to add more to my portfolio by throwing in 0.5 SOL so that my portfolio page would look more matured with more than one asset. *winks*.
Now we’ve got a change in my portfolio page as shown below. The total value of my SOL and USDC deposits is $121.11. The Annual Percentage Yield for my deposit is 3.07%.
If you select any token from the market listing, you will be able to the Annual Percentage Yield that should be expected of the asset you have selected.
In the Composition section, you can see the protocols where the tokens are being aggregated from. For the USDC token, they are being pooled together from Solend, Larix and Port Finance.
Everlend Finance DApp is being developed by the software engineering company with specialty in blockchain development, Attic Lab and Everstake – a staking-as-a-service platform from Ukraine with the focus of helping institutional investors and token holders earn a decent percentage of profit by staking their holdings with them.
Everstake also helps in the overall decentralization of Solana network by running a validator node.
Everlend offers you an aggregate for the assets you are lending out so that you can get the best rates on your deposits. This is to serve you with a more suitable app and to provide you with a better experience by abstracting multiple protocols underneath the hood.
In addition to offering Solana users a powerful new tool to manage their investments, Everlend has one of the best UI’s we have ever seen. We are excited to check out ELD token when it is available for trading.