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Defi Borrowing and Lending Reimagined with Jet

This week’s Project Serum Twitter Space focuses on the Jet Protocol composed on the Serum blockchain. Jet is a unique spin on the area of Defi lending that leverages the power of the Solana blockchain and interest rate arbitrage. Read on to find out more about how Jet is leveraging Serum to disrupt the crypto finance landscape.

Jet Protocol Summary

For those who maybe aren’t familiar, what’s your elevator pitch? What is Jet Protocol?

So, we’re a borrowing/lending protocol. We did start out with a pretty nebulous blog post, but we had intentions of building new things. Not just a 1:1 port of pooled lending model from Ethereum to Solana. We actually added some novel features to it like a central order book and order book liquidations like we have on Serum. There are also a few other nifty Solana-native tech improvements we made to the protocol before we launched.

Essentially, we just rewrote the thing from the ground up. We view Solana as a very nascent space. It needs a lot more research and development before you can unlock a lot of its power. That’s what we’re working on right now — really tapping into the things you can do with Solana Virtual Machine. The products we release in the future will be representative of that.

How did you guys come together and when did you start building Jet?

We came together back in 2017 when we met at Consensus. We both wound up working on the earliest iterations of what became the Customer Success circle at MetaMask. Most of our time was spent figuring out how to properly support users of non-custodial blockchain products.

The idea for having a borrowing/lending protocol didn’t really dawn on us at first. We just figured someone else would build it. Eventually, we realized that we had to build it. At the time, there were no other borrowing/lending protocols out there. It’s not really the best idea to launch a company or start building something thinking, “Well, someone else will eventually build the base layer we need to support our project.” That can lead to an awkward fate later on. So, that was our decision process.

How have the features of Solana and Serum affected how Jet is built at an architectural level?

Jet is built algorithmic right now. We don’t really like the algorithmic model. It’s just based on utilization and it’s the first thing we got out the door. It was built on Anchor, so we were just testing to make sure we had a good handle on Anchor.

Our V2 is a lot different. One of the things we’re very interested in is the agnostic order book. It makes a lot more things possible, and our V2 uses a lot more of these novel features to move away from the algorithmic approach.

It’s similar to an AMM. If someone just shows up and utilizes all the pool, users are going to be seeing a crazy interest rate. And, with anything you want to bring to market, you want to introduce term structure for the long term. This way you actually have an interest rate curve.

It’s not to say that we’re there yet, but V2 is replicating a more traditional lending environment that you see as the base layer of all global finance. The central limit order book market functionality is the next step toward offering better lending products. For right now, it’s just a pooled lending model but that was sort of our minimum viable product (MVP).

So, since Jet was launched, you guys have achieved a lot. What has been your favorite so far and what’s your roadmap for the future?

I’d say the team we’ve built. We’re really proud of them. I mean, it’s very difficult to hire and I think we did a really good job. We spent a lot of time early on finding the folks we needed and recruiting them.

The work with the community is also a big thing. The code is the easiest part. It’s very binary — either you can do it or you can’t. But the relationships and putting together the “meetspace” side of it is the hardest part. Communicating how we want to change the protocol, how we want to change the DAO, and all that stuff takes a lot of deliberation and communication. I’d say sometimes the governance is the hardest part of creating a protocol.

Also, our UI. We’ve taken a really fresh, different approach to UI. We really broke some rules when it comes to dApp scaffolding in order to make the protocol more user-friendly. It was a much heavier lift up-front, but I think we’ve learned a lot about what works and what doesn’t, which all ties into how awesome our team is.

Taking Off with Jet

That’s a wrap on another week of the Project Serum Twitter Space interviews. What an insightful look into all the amazing things happening on Serum and in the digital economy as a whole. Thanks to brilliant people in the space like Will, James, and their team, we’re seeing a new economy spawn right in front of our eyes.

For more on what the Jet Protocol team is doing with Serum, check out the full YouTube video or Twitter Space interview.

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