Solana, the biggest competitor to Ethereum’s dominance over DeFi, has exploded in popularity this year. It has surpassed some of the most prominent blockchains in order to claim the fifth spot among the top ten global cryptocurrency market capital.

In the meantime, the market capitalization of has crossed $52 billion as the platform’s native token, SOL, surges. SOL has risen from its May 2020 low of $0.5052 to a high of $260.06 by November 2021.

Solana is a versatile, open-source cryptocurrency project that has gained a lot of popularity in the DeFi community. The third-generation layer-1 Blockchain can be used to facilitate many dApps and DeFi solutions as well as smart contracts. Solana, unlike other chains, uses a hybrid consensus of proof–of-history and proof–of-stake mechanisms. This allows the Solana to process as much as 50,000 TPS, and 400ms block times.

Amidst Ethereum’s problems related to scalability and gas costs rising at an alarming rate, Solana proved its worth, as hundreds of developers, both veterans and beginners, lined up to build on its infrastructure. A flurry of promising projects, spanning across DeFi, NFT, lending, and blockchain games, were quickly onboarded to the platform, helping SOL’s value grow spectacularly throughout 2021.

The Solana ecosystem currently boasts over 500 dApps. This includes DeFi projects such as Serum, Mango and Drift Protocol. Raydium and Saber. There are also lending protocols like Apricot Finance and Jet Protocol. Solend and other NFT markets like Metaplex and Magic Eden.

The Solana protocol’s total value locked (TVL) crossed $11 billion in the fourth quarter of 2021, with Raydium contributing the most, followed closely by Serum. Its dynamic ecosystem has been a key reason for Solana’s exponential growth. Solana stands out as the layer-1 chain with the fastest transaction speeds, even though most layer-1 networks are increasingly dependent upon layer-2 scaling.

The platform guarantees that both users and developers will pay transaction fees of less than $0.01 per transaction, the lowest ever recorded. Other than this, the Solana blockchain is censorship-resistant, allowing dApps to run freely forever without ever pausing transactions.

Soda Protocol Aims To Expand Solana’s DeFi Dominance

While many promising projects are using Solana, let’s take a quick look at a project that aims to redefine on-chain lending.

Soda Protocol is DeFi lending protocol. It has an integrated on-chain credit mechanism on the Solana Network. The credit rating system was introduced on blockchain for the first time, creating new possibilities in the growing DeFi market.

Soda Protocol was founded by an experienced team who entered the blockchain market in its early days. It seamlessly combines DeFi and its Sol ID credit ranking system to ensure the best levels of scaling. It offers three main services: lending, composability, and its on-chain credit rating system Sol ID.

Soda Protocol’s lending services offer similar products to Aave and Compound. It also offers a variety of additional products, such as Flash Loans, Flash Liquidation and Easy Repay.

Soda Protocol is aiming to increase DeFi opportunities through the Sol ID credit program. Sol ID allows for the collection and analysis of different kinds on-chain behavior data. Based on weight-related time functions, credit scores for individual users are created and issued NFTs. This NFT (Sol ID) is able to be used on a variety of services such as governance, IDO allocations and other partner platforms. The Sol ID will be launched alongside Soda Protocol’s mainnet release.

Soda Protocol offers also composability module. These modules empower partner projects to seamlessly acquire Sol ID data to verify a user’s credit rating to better allocate utilities, such as under-collateralized loans, lower interest rates, and more. All of these activities will reference the user’s corresponding credit score, similar to traditional finance.

Hubble Protocol Aims To Boost DeFi On Solana

DeFi and stablecoin project, Hubble Protocol, is leveraging Solana’s infrastructure to offer interest rate products. Hubble lets users earn return by just holding tokens.

Hubble is a multiasset loan service offering zero interest. The USDH stablecoin is created for 0.5%. Users can also get a yield up to 7% with SOL or other cryptos.

This platform will be launched on the Solana ecosystem over three phases. Phase one was already completed after the USDH stablecoin’s launch. Structured products as well as uncollateralized loan features will be introduced in the second phase.

Hubble Protocol, which has received $3.6 million in private seed funding from several of the most prominent names in crypto, such as Jump Capital, Three Arrows Capital, DeFi Alliance and many others, is helping to accelerate DeFi on Solana.

Solana’s core vision is to help grow DeFi and Web3 while lowering entry barriers. Hubble Protocol, Soda Protocol, and Soda Protocol will all play an important role in making this vision a reality. With Ethereum’s problems on the rise, Solana has established itself as the go-to platform for the booming DeFi space, indicating further growth in the future.

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