the liquidity landscape on
@solana is about to change.
this is a big deal for stablecoins and yield-bearing RWAs. lemme explain:
the problem: building stablecoin/RWA liquidity is extremely expensive (I know from experience with JupUSD). You need to pay MMs out the nose or you need to have many many millions on the balance sheet to deploy into traditional AMMs to get indexed by oracles. the former is hard to scale, the latter is capital inefficient.
the solution: Jupiter Lend v2 lets you use an LP position from the Lend AMM as collateral. Traders using Jupiter can swap through the LP, meaning you get both trading and lending fees via Smart Vaults (opt-in, ofc). Given that lending APY is usually 10x+ as high as trading fees APY on stables, this is an economic miracle for stablecoin issuers. the same liquidity just earns way more.
and the even cooler thing: issuers can also leverage loop their LP position and build up extremely deep liquidity for a fraction of the cost they would via MMs or incentive programs. again, speaking from experience, I can tell you this is a godsend. and given the number of asset issuers coming to Solana, this will get a bunch of usage.
this is great for Jupiter Lend borrowers, since more stablecoin issuers using the Lend AMM = deeper liquidity = bigger borrows at more stable rates.
this is great for Jupiter Lend depositors, since there is now a structural borrower (asset issuers) to ensure consistent borrow demand on the platform (giving more consistently high APYs)
this is great for Solana because now every asset issuer can get better economics, deeper liquidity, and can deliver a better UX for their holders. this is a competitive advantage for issuers to use Solana vs other other chains.
this is great for Solana users because now you will get tighter spreads for stables and yield bearing RWAs.
and remember the best part: it’s not just stablecoins!
this same mechanic can work for anyone creating an RWA that increases its price on a fixed schedule (like syrupUSDC).
even if the RWA or stablecoin isn’t available as collateral within Lend, the issuer earns lending APY on the other half of the LP (normally stablecoins like USDC or USDT). so it still makes economic sense for them to migrate from traditional AMMs to Jupiter Lend’s AMM.
Jupiter Lend is now the best place for asset issuers to bootstrap liquidity. And the number of asset issuers onchain is growing exponentially.
position yourselves accordingly.