The Best Solana DeFi Protocols to Lend Crypto

Note: This article is not financial advice. Kamino Finance does not endorse any tokens or platforms mentioned in this article.

Overview

• There are several different platforms for lending tokens on Solana.
• Some Solana platforms lend crypto for different utilities and opportunities.
• The Kamino Solana DeFi Basics series should only be used as a reference.

Kamino Finance is dedicated to helping the Solana decentralized finance (DeFi) community learn as much as possible about the ecosystem. DeFi is an innovative and complex emerging technology that provides a new utility for users interacting with blockchains like Solana, and there are plenty of topics to explore.

So, in this next installment of the Kamino Solana DeFi Basics series, this article will peek into the world of DeFi lending on Solana for some of the best Solana DeFi protocols to lend crypto. This introduction will list protocols by total value locked (TVL) as reported by DeFi Llama at the time of writing, and this should be regarded as an arbitrary ordering system.

Surveying the Best DeFi Lending Protocols on Solana

It should be noted that many of the lending platforms mentioned in this article are not purely borrowing and lending protocols. Most protocols offer utilities beyond money markets and the ability to lend and borrow Solana crypto assets, and those features will be mentioned briefly in relation to each project’s DeFi lending utility.

Building Global Credit Markets with Credix Finance

Credix Finance is on a mission to connect accredited investors with emerging markets around the world. The project is innovating ways to further connect DeFi and real-world assets (RWA), allowing borrowers to finance RWA loans and further their operations.

Participating in RWA lending on the Credix Solana platform requires passing KYC. Additionally, unlike most other DeFi lending protocols, borrowers must apply for access to accredited investors who have passed KYC.

The goal of Credix lending is to support further capabilities for lenders in markets where access to additional capital is limited. As the ability to finance RWA loans increases, startup FinTechs—and their customers—get a leg up in parts of the world that DeFi can reach, but Tradfi leaves hanging.

Lend on the Perpetual Swap Market Drift Protocol

Drift Protocol served as one of the highest-volume perpetual futures markets on Solana until the spring of 2022. After the collapse of the Terra ecosystem and the contagion afterward, Drift trade operations were paused until the launch of Drift v2.

The Drift app relaunched at the end of December 2022 allowing users to trade futures or spot as well as lend or borrow their crypto assets. Users on Drift can supply tokens for lending and earning yield, or they can borrow against their deposit to leverage their trading.

A Meteora Solana Shower from a Mercurial Past

The platform once known as Mercurial has been re-launched as Meteora. The former stable swap project has rebranded itself a “community capital allocation layer” on a mission to deploy assets on Solana as efficiently as possible.

Users can deposit tokens as liquidity for swaps between pegged and stable assets, or they can lend tokens such as SOL, stSOL, USDC, and USDT through Meteora’s lending aggregator, or Dynamic Vaults. According to Meteora, tokens deposited into its Dynamic vaults are allocated between other lending protocols listed in this article every minute.

Tulip Lending is Just One of Many Utilities on Tulip Finance

Tulip Finance provides multiple utilities for the Solana DeFi community. The Tulip Protocol hosts auto-compounding vaults, strategy vaults, and leveraged yield farming (LYF) opportunities in addition to a Tulip Swap and Tulip Lending.

Tulip’s Swiss Army knife approach to DeFi allows the protocol to distribute assets from Tulip Lending to users who seek leverage when yield farming. What’s more, by setting up yield farming positions through the Tulip app smart contract, Tulip can provide under-collateralized loans for users seeking LYF opportunities.

Francium Crypto Yield Solutions for Solana DeFi and Lending

Francium is another protocol on this list that offers LYF opportunities for the Solanan DeFi community. Users can choose to only earn yield from lending tokens to other users who seek leverage on their Francium crypto yield farming, or they can participate in LYF while also participating in Solana lending.

Since lending on Francium enables users to yield farm with under-collateralized loans, it’s possible to seek up to 3x leverage on yield farming positions. However, increased leverage increases the chances of facing liquidation while lending on Francium.

Lend and Borrow with Solend Solana Money Markets

Solend is one of the oldest money markets on Solana. The Solend Solana OG status means that the protocol hosts one of the most extensive permissionless lending markets on the network.

At the time of writing, users can borrow and lend over 80 assets in over 50 isolated pools. Unfortunately, also at the time of writing, Solend’s Main Pool has disabled borrowing until further notice.

Other isolated pools are open for borrowing the newest assets to enter the Solana ecosystem, such as $HADES, which has recently entered the Solend borrowing protocol despite the Main Pool remaining closed.

Earn Yield Participating in the Solana Lending Ecosystem

Users who participate by lending on Solana can earn yield from other users borrowing their tokens. There are many options for Solana lending, and although the basic principles of lending crypto in DeFi remain unchanged, there are many different reasons why users borrow crypto, so not all Solana lending opportunities are the same.

Uses should DYOR and assess outcomes and risks before participating in DeFi lending. The Kamino Solana DeFi Basics series should only be used to supplement DeFi research, and users should take note that the information in these articles may become outdated as quickly as DeFi on Solana moves, which is quite fast.