Larix: Dynamic Lending on the Solana Network
Project Larix is a comprehensive lending protocol hosted on Solana. The lending platform brings unique value to the Solana ecosystem by providing dynamic interest rate models and capital-efficient risk management, among other things.
The Larix Team
Larix is built by an anonymous yet skillful team of developers. Although Larix does not have a visual-facing team, the skills and experience behind the scenes are shown through the work they have accomplished, giving rise to the mantra of years ago to “don’t trust, but verify” as a means of interacting with the blockchain.
The investors and partnerships that have backed Larix hold a lot of weight to their success from their incubation stages. Some of the investors are heavyweights in the blockchain world, ranging from Solana and Polygon, to capital firms like Icon Plus Capital, Epsilon Trading, FBG Capital, 3Commas, and many more. Partnerships with Larix include Plutos Network and PYTH.
What is Larix?
The Larix Project is a complete lending protocol platform that was built exclusively on Solana and to be used on the Solana network. Although there are many DeFi lending platforms on other chains like Ethereum, quite a few of these have their own disadvantages and are handicapped by the enormous fees on those platforms. Rising gas costs can be burdensome and rule out the same people who need to take advantage of lending opportunities – effectively closing the door on a large portion of their user base. Larix solves these issues right out of the box with low cost transactions (which can oftentimes be less than 1/100 of 1 USDC) and also allow for fast transactions due to the Proof of History protocol on Solana.
Although fast and low cost transactions are innate to Solana, Larix also has its own set of features that make their platform quite unique and adaptable to the needs of different users and market conditions.
Inside the Platform
Taking a look inside Larix, there are a lot of features and unique approaches to the platform. The platform is the first to have live mining functionality on the platform itself, while also being the first audited and open-sourced lending platform on Solana. Using Larix is as simple as connecting your wallet on the platform. When connecting via a Solana-compatible wallet, users will be able to access the following:
- Collateral Lending: users will be able to take over-collateralized loans for various crypto assets like BTC, ETH, and more, in addition to using stablecoins like USDT and USDC as collateral. This will give users the opportunity to essentially “stake” their existing assets and use them as a type of secured loan.
- Project Debt Financing: on the Larix platform, users will be able to customize the type of financing needed. This will be handled in part with their PYTH collaboration and give rise to options for Initial Lending Offerings (ILOs) and higher capital utilizations.
- NFT Assets (coming in 2022): after the groundwork has been established on collateralized lending for funible crypto assets and stablecoins, Larix is planning in the following year to extend this lending opportunity to NFTs. This will bring a whole new dynamic to lending.
- True P2P Lending (2022): also coming in the following year is a true P2P lending experience where you can have lending opportunities directly with another person by leveraging smart contracts as the middleman, without a need to use the platform itself as a custodial holder.
Alongside these features, Larix will use a dynamic interest rate method that adapts to market conditions, as well as creating a much more capital efficient platform for risk management.
Target Audience For Larix
There are a wide variety of users on DeFi and each project might not be a perfect fit for everyone. If someone is a huge fan of lending oriented platforms and frequently needs the ability to take advantage of collateralized loans, then Larix is absolutely for them. Larix is also a great platform for those that want to migrate or use something different than a slower and more expensive platform from the Ethereum network. Down the road, NFT lending options will be a huge attraction for NFT holders.
Value Proposition
With the top lending platform being valued at over $4 Billion while a handful of others have reached a $1 Billion valuation it’s easy to see that a project like Larix has a ton of potential for growth and success. While there are many lending platforms on the Ethereum network that are valued extremely high, there are not many on Solana at all as it is still a fresh network for DeFi projects. Larix has an extremely high amount of potential, especially as more people migrate to Solana each day.
Reflection
There is a lot going for Larix as it nears the public launch of its lending platform. The lending sector of DeFi is growing rapidly but has recently stalled – particularly because of the lack of speed and fees on top of some mediocre user experiences. Ethereum fees for lending can often approach what it would cost for traditional brokers. Larix building on Solana will help this tremendously and being an early bird on that ecosystem has paid off for many projects already.
Time will tell how Larix benefits by being early and innovative on a new platform.
The Larix Project
Guide to Using The Larix Dashboard
Comparison of Lending Platforms
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