Ethereum has dominated the world of DeFi since its launch in 2015. However, the past few years have witnessed the rise of new blockchains with capabilities similar to those of Ethereum. Cheaper and possibly more scalable, Solana stands as an effective alternative to Ethereum for blockchain applications like DeFi.
The growing interest in Solana DeFi has spread like wildfire, and Nigerian investors are caught in it. Relatively untapped, Solana DeFi is a goldmine. Moreover, getting started is much easier than it seems. Keep reading — this article explores the deep ends of investing in Solana DeFi as a Nigerian.
Understanding Solana and DeFi
Our first stop is understanding what Solana DeFi even means. But to do that, we need to understand what DeFi is. The acronym stands for Decentralized Finance. Simply put, decentralised finance is a subsection of finance. It is a blockchain-based innovation allowing users to perform financial transactions without a central authority.
DeFi offers financial services using dApps and protocols. For many years, Ethereum has been the dominant blockchain. The dApps on the platform include AAVE and compound. They provide financial services like lending and borrowing.
But recently, that has changed. There are now multiple blockchains, one of which is the well-known Solana. The platform has minimal fees, high throughput, and low latency. Solana DeFi is a decentralised finance company that uses the Solana blockchain for its transactions. Like Ethereum, DeFi relies on several dApps for financial services such as lending, borrowing, and insurance. Some popular Solana dApps are Magic Eden and Phantom.
A Look at the Solana Defi Applications (dApps)
Solana is an open-source blockchain with high throughput and low fees. The platform uses a proof of history consensus mechanism. The blockchain has an active dApp ecosystem primarily involved in decentralised finance. Here, we list each of the well-known dApps under each category in Solana Defi:
- Payments:
The Solana network features several dApps that participate in offering payment services. Sphere is a notable mention.
- Lending/Liquidity:
The Solana network features many dApps that participate in offering lending/liquidity services. Here are notable mentions:
- MarginFi
- Meteora
- Orca
- Karmino
- DEX:
The Solana network features some dApps that participate in offering DEX services. Here are notable mentions:
- Cube
- Backpack
- Aggregation:
The Solana network features several dApps that participate in offering aggregation services. Jupiter is a notable mention.
- NFT Marketplace:
The Solana network features several dApps that participate in offering NFT trading services. Here are notable mentions:
- Tensor
- Magic Eden
Different Possible Ways to Earn from Solana DeFi
Solana DeFi offers incredible opportunities to earn more as a Nigerian investor. Here are some popular ways many users earn with Solana DeFi:
- DeFi Lending: Lending is one of the many ways people earn on Solana DeFi. You can use dApps like Solend and Port Finance to lend to others on the blockchain and get interest rates in return.
- DeFi Staking: You can stake Solana on a smart contract and earn dividends in return. You become a validator and earn other incentives from staking.
- Yield Farming: Another well-known way to make passive income with Solana Defi is yield farming. You lock your token in a liquidity pool via a dApp. Your funds are then used for borrowing and swapping, and the dApp pays interest and fees.
- Provide Liquidity: Finally, you can opt to provide liquidity. This is usually on decentralised exchanges. Your funds are used for all sorts of financial transactions. The more transactions the liquidity pool experiences, the more your income.
Frequently Asked Questions (FAQs) About Starting Solana DeFi
How many Solana DeFi dApps are there?
Solana is a relatively new blockchain, and many developers have only started exploring the platform. Regardless, over 57 active DeFi dApps are available on the Solana blockchain.
How do I turn Solana to Naira?
If you want to convert your SOL to naira, there is only one correct answer—Breet. The over-the-counter platform leverages the latest technology to ensure secure and seamless transactions. Sell your Solana tokens today on Breet for competitive rates and peace of mind.
How can a beginner invest in DeFi?
DeFi is vast, with countless opportunities. There are many ways to earn with DeFi. You can lend, trade, stake, borrow, or participate in yield farming. Getting started involves accessing the dApps for your chosen investment. Then, do your research on the risks and potential rewards.
Can I make money on Solana DeFi?
Yes, you can. Solana DeFi offers several opportunities to make money passively through lending, staking, yield farming, and more.
What is the difference between Solana and Ethereum DeFi?
Solana and Ethereum DeFi are similar in their base functionality. However, the blockchain is different. Solana features high throughput, low latency, and minimal fees, making it faster and cheaper.
Conclusion
Solana DeFi holds a lot of potential. You can tap into massive profits once you know the reins. This article covers everything you need to know, from what Solana DeFi is to how you can earn from it. Once you know the rhythm, it is easy to dance to the tunes. And remember, choose Breet when you want to convert Solana to cash. Stay safe and trade responsibly.
