Home Editor's Pick Soda Protocol: A Smart Lending Protocol with Credit System

Soda Protocol: A Smart Lending Protocol with Credit System


The Soda Protocol platform was created to merge DeFi Lending with the trustful Sol ID Credit Ranking system. Basically, Soda Protocol’s platform empowers its users to stake SODA tokens to generate liquidity rewards for themselves.

Soda Protocol, which successfully passed the Alpha Devnet community test run for a period of six weeks, is an innovative lending solution now available in the mainnet. Soda’s innovative capital-efficient lending platform is opening the path towards integrating lending with a credit rating system.

More specifically, Soda Protocol operates over loans traced by the Sol ID Credit Ranking system on the Solana blockchain platform.

Soda Protocol’s team, comprised of blockchain and DeFi industry veterans, believed in Solana from its early days, for its potential to become a leader in the current era.

Soda Protocol Makes Lending Safer, More Efficient

As it grew, Soda’s engineers also detected that despite the adoption growth Solana still lacked easy-to-use infrastructure tools and protocols. So they started to develop the Soda Protocol, with the clear intention of creating value for the entire crypto ecosystem.

Soda is implementing a liquidity provision campaign as part of the mainnet launch. This program is called Soda Sparkling and allows users to transfer funds into Soda’s lending pools in return for liquidity rewards.

According to Soda,

Soda has well-developed basic lending function, which has one of the smoothest experience on Solana. It has also completed the flash loan, flash liquidation and other features to help users better improve the capital efficiency, and the Soda team will still maintains a rapid pace in product iteration.
In Defi 2.0 era, capital efficiency is more important than TVL, and Soda is exactly designed for it: connect the liquidity between different protocols and establishing a credit system to help users accumulate the value of on-chain behaviours, all of these based on improving capital efficiency.

Another feature specially implemented for the launch is the implementation of a retroactive airdrop plan, that will depend on the ‘time-weighted’ of the lent and borrowed amounts operated by community members.

The Soda Protocol Co-Founder, Colin Iliad, commented,

“Soda Protocol is our attempt to improve capital efficiency for the entire DeFi ecosystem. We will start from a basic lending protocol and introduce a special mechanism including a credit system to provide a liquidity pool and leverage tool for other protocols in the ecosystem, to make the liquidity on-chain have a better “flow” and be used better.”

Soda’s engineers not only wanted to break DeFi’s limitations adding scalability but also wanted to generate value for the entire Solana ecosystem.

The Soda lending platform generates revenue in three manners: lending of course, the on-chain credit system and the composability modules.

Francium and Slope Finance are two of the decentralized exchanges to offer the first cross-platform wallet in the Solana blockchain developed by Soda.

Soda Protocol is basically a smart lending protocol linked to a credit system, being this feature innovative enough to help DeFi and We3 develop and grow.

Soda Features

Soda Protocol has created a deep platform that is simple to use.

Here is how the platform is organized:

Basic Lending

Lending interest fee and flash loan fee.
Liquidation bonus.
Arbitrage and lossless farming with idle funds.

Credit system

To business, under-collateralized loan service fee.
NFT selling. Accumulate achievements and reputations, which is the basis for credit system.
Ticket for joint operations.

Challenging the current DeFi models of trust research, Soda protocol is linked to the innovative Sol ID credit system on Solana.

The benefit of using Soda Protocol is remarkably clear for DeFi users, DeFi institutions and other DeFi protocols because it offers many features from basic lending functions up to a credit rating system.

Soda Protocol is also a lending market for NFTs utilizing liquidity provider (LP) tokens and synthetic assets. Users will need to have a good credit score by staking a fair amount of SODA tokens to access the services described here.

The Soda engineers behind the project are postponing all fundraising activities for later on, since the plan is to build a solid product first.

As the overall strategy, the Soda platform dev team wants to reach those users within the Solana network willing to transfer assets through a cross-chain bridge or those who already have assets participating in the liquidity pools.

Even if already consolidated loaning platforms existed in Solana’s network, like Port Finance, Solend, Apricot, Jet Protocol, Larix, Acumen Protocol, Soda is different from its competition by incrementing the capital efficiency or ROI.

As a first step, users must select which lending protocol is its grounds, as their starting point. Immediately the Soda platform will integrate an on-chain credit rating system to the user’s profile, called Sol ID, being this feature the flagship of Soda’s uniqueness in comparison to other competitor’s protocols.

Once the credit sistem Sol ID is active the user can benefit from dynamic Loan to Value (LTV) if the user’s credit scores is good enough (on-chain trust behaviour) and under-collateralized loans to protocols/institutions also depending on their credit score (on-chain behaviour).

SODA has taken a different path compared to its competition- protocols and institutions receive under-collateralized loans in relation to their credit system Sol ID. This system increases capital efficiency even higher for large clients.

So that risk is kept to a minimum for every investor, Soda utilizes a clever risk management mechanism for loan recipients and loan assets: participating in insurance pools and DAOs governance.

Don’t Just OWN Assets, Use Them!

The Soda Protocol engineers believe that measuring the development of DeFi exclusively by TVL (Total Value Locked) is inconvenient. Another means of measurement should be the capital efficiency of an asset locked in the protocol.

Soda put its effort in providing liquidity for the correct use of assets (not the ownership of these). The capital efficiency of the lending protocols need to bring out the use value of more tool assets (used as both production and reproduction means)

After the lunch in mainnet, Soda is promoting SODA token staking by implementing a global pool. The amount of staked SODA raised in this activity will become the initial insurance funds.

The DAOs (Decentralised Autonomous Organizations) will be managed through Sol ID. And those users staking SODA tokens will gain governance rights within Sol ID platform.

Soda Protocol is also renowned for its user-friendly front end, Other benefits will be:

A more user-friendly experience.
A higher token utilization, with a resulting higher interest rate.
The ability to accumulate good on-chain behaviour with the Sol ID credit model, which is a certificate for having exclusive rights in the future.

Learn More About Soda Protocol

Because it is based on Solana, Soda has an edge over the Ethereum ecosystem due to Solana’s high speed and concurrency, thereby enhancing the product experience.

Easier-to-use products are more likely to be recognized by users. Soda has achieved a more humanized and intelligent product design and implementation, and the user experience is smoother.

Currently, there are data and liquidity gaps between the various protocols, which leads to overall capital inefficiency of the blockchain ecosystem. Soda Protocol is addressing all of these issues, and creating room for the DeFi ecosystem to grow at a macro level.

To learn more about Soda Protocol, just click right here!

The post Soda Protocol: A Smart Lending Protocol with Credit System appeared first on Blockonomi.

You may also like