Solar ☀️

Cracking the code of Solana DeFi — @kamino

[Solar ☀️ @DefiSolar]

I've been through every Solana @colosseum radar hackathon applications so you don't have to.

...and the DeFi track was full of hidden gems.

Here's my top 7🧵

[Solar ☀️ @DefiSolar]

@Futargamy sold all my zkfg at $0.15, life is good

[Solar ☀️ @DefiSolar]

@0xMudaMuda @perena 💀

[Solar ☀️ @DefiSolar]

weird way to find out my @perena points will be worth nothing

[Anna is Purple @gizmothegizzer]

Update: quite a few people reached out after my original post and I've since had hours of fascinating conversations with people interested in alternative family structures. So here's my V2 proposal:

I'm looking to donate my eggs to families under these conditions:

1. $100K donated to charity with future donation amounts set to a bonding curve. I already paid for egg retrieval.
2. I'd like the option (but not the obligation) to take them on a day trip once a year. I'm not looking to co-parent, but I'd love to know how the children are doing.

At a women's CEO retreat, we were daring each other to take concrete steps toward our goals. One of mine was to start philanthropy now.

I've spoken to a few families who might be interested, but figured I'd cast a wider net and run some ads it!

Next: If we could design a family from first principles, what would we do differently?

[Solar ☀️ @DefiSolar]

@designape_ @perena 😭😭😭

[Kamino @kamino]

Come build the future of onchain finance with Kamino.

We’re hiring across engineering, product, business development, marketing, legal, and operations.

Explore open positions: https://t.co/fjd0oCZ9Ee

[Solar ☀️ @DefiSolar]

@richardkingxyz proud to be 1% of that

(im literally gambling the option premiums)

[Felipe Montealegre @TheiaResearch]

You may know that Kamino just brought on a fintech/Wall Street veteran as CEO. You may even know that Michael Weisz founded Yieldstreet, an early fintech winner, but you have no idea just how good he is until you spend an hour listening to him speak.

[Solar ☀️ @DefiSolar]

@mango_ @MeteoraAG @Hoookedpad 🤣

[Solar ☀️ @DefiSolar]

@kdotcrypto u guys already have 10m oi???

[Solar ☀️ @DefiSolar]

@MeteoraAG that's really cool, ggs to the team

[Solar ☀️ @DefiSolar]

@mitchellsniffle @MetaDAOProject nice tshirt

[Solar ☀️ @DefiSolar]

@_incept1on @reflectmoney @DriftFDN 0,20c is def the play, then you buy DFX at 0.05$ haha

[Solar ☀️ @DefiSolar]

@gumsays gmino

[Solar ☀️ @DefiSolar]

@aut3z @hylo_so aut3z joined the $eHYUSD gang

[Solar ☀️ @DefiSolar]

Emmanuel went much deeper into the risk behind $eHYUSD here.

"a 50% drop across all collateral works out to about a 0.5% loss at the time of writing."

this is basically why I'm comfortable moving a meaningful part of my stablecoins into $eHYUSD.

[Emmanuel @5Talker_]

Yes, $eHYUSD is yielding 20%+ APY. No, it isn't taking on extra risk to do it.

That sounds backwards, because high yield usually means high risk.

But is that true for eHYUSD? Let's look at it together 🧵

[Solar ☀️ @DefiSolar]

@aut3z @hylo_so @solana money talks better than I do

hook is not just a hook, it's a fact

[Solar ☀️ @DefiSolar]

Just opened a 6-figure position in $eHYUSD (@hylo_so's yield-bearing asset)

20%+ APY, and imo the best risk/reward on @solana right now.

I spent hours reading the docs & talking to the team to understand the yield and what could go wrong.

Here are my personal notes ⤵️

1) Quick recap about Hylo

Hylo is best known for its leveraged tokens: xSOL, xHYPE and xBTC.

They give you roughly 2–3x exposure without liquidations. So if SOL goes up 10%, xSOL would gain around 20–30%, depending on its leverage at the time.

That works both ways: losses are amplified too.

2) What's $eHYUSD and where does the yield come from?

You can stake hyUSD, Hylo's stablecoin, and receive eHYUSD to earn a share of the yield generated by the protocol basically:

• xSOL holders give up the staking rewards on the SOL backing their positions in exchange for leverage.
• xBTC and xHYPE holders pay borrow charges for theirs.
• xSOL holders might also pay extra borrow charges, specifically when liquidity is needed (which is the case right now)

Those revenues are shared with eHYUSD holders and compound automatically.

3) APY was around 9%, why has it recently jumped to 20%+?

As SOL and BTC went up, xSOL and xBTC holders made money, but the leverage on their positions came down.

They're now at 2.20x and 2.48x, both below Hylo's 2.54x lower boundary.

To bring that leverage back up, Hylo needs to buy more SOL and BTC, which means attracting more stablecoin deposits.

So holders pay more for their leverage, and part of that goes to eHYUSD holders.

For example, xSOL holders currently pay ~5% in borrow charges while also giving up the staking yield on the SOL behind their positions.

Those staking rewards and extra borrow charges flow into the Earn Pool alongside revenue from the other markets, bringing the yield we receive on eHYUSD to ~21% APY.

Once leverage is back in range, those extra charges come down. I'd expect APY to move closer to 10–15%, depending on deposits and market conditions.

4) What could go wrong?

In V1, the Stability Pool could convert your hyUSD into xSOL during a selloff, leaving you exposed to further SOL losses.

V2 instead starts selling collateral into USDC when leverage goes above ~3.86x, reducing exposure as the market falls.

But if prices crash faster than the protocol can rebalance and a pool becomes under collateralized, the Earn Pool can be used to cover the shortfall.

That means losing part of your deposit, even if hyUSD keeps its peg.

There are also smart contract and oracle risks of course.

5) What to do with your $eHYUSD?

- Hold it in your wallet and let the yield compound. $eHYUSD started at $1 and is now worth ~$1.48 as interest has built up.

- Explore tranching markets on @ExponentFinance. I put a small amount into jrEHYUSD, currently yielding ~28%, but it takes losses first if eHYUSD drops, so the downside is much bigger too.

- Loop it on @kamino (soon).

Let me know if you have any questions, I'll be more than happy to answer

Note: I'm a seed investor in @hylo_so

[k5 @k5cryptojp]

Loop it on Kamino (soon)

[Solar ☀️ @DefiSolar]

@Defriedshallots @hylo_so @solana did not understand much aswell so had to ask @Shoomsol and @sape_sol haha

they took time to explain to me so why not take my time to explain to more people!

[Sape.hy @sape_sol]

Great read!