I remember that the last round of Solana ecosystem was completely developed in accordance with the development path of Ethereum ecosystem, from DeFi to NFT to GameFi. Basically, all the routines that can be played have been played. After the collapse of FTX, Solana ecosystem was basically destroyed, and only a few large DeFi infrastructures (DEX, lending, etc.) survived.
This time, Solana changed its game, focusing on mobile phones, DePin, AI, and new platforms. Although it took a lot of effort to promote it, it was memecoin that made Solana stand out. But in the end, the market's attention (money and users) returned to Solana's DeFi ecosystem.
I guess the future trend is to build a nesting doll based on DEX, lending, and Staking to improve capital efficiency. The emergence of Restaking is a good example, and Sanctum's LST liquidity layer is also a nesting doll in a sub-segment (I have talked about these before).
Solayer content link: https://x.com/0xSleepinRain/status/1823602286326898785
Another segment that improves capital efficiency is leveraged mining. We have seen this type of protocol on other chains, such as Gearbox on Ethereum. There are also some on Solana, such as Kamino and NX Finance. I believe everyone is already familiar with Kamino, and today we will talk about NX Finance.
PS I personally deposit JLP for mining, 2x leverage, 1.7 liquidation line. I also deposited part of my U in this protocol, 10% APY. My overall financial position in NX Finance is not large.
NX Finance is engaged in the leveraged mining of mainstream assets in the Solana ecosystem. For example, Jupiter's JLP and vSOL. In simple terms, it is to deposit JLP, borrow USDC with leverage (0-5x) and buy JLP, so as to obtain higher yields for users. Of course, since there is leverage, liquidation is involved, and the liquidation lines of different leverages are marked on the front end.
Later, NX will also launch leveraged mining for protocols such as Solayer and Sanctum.
At present, NX Finance’s TVL is mainly composed of JLP (borrowers) and USDC/USDT/SOL (lenders). The borrower’s income comes from the leveraged mining of JLP/vSOL, and the lender’s income comes from the profits paid by the borrower.
In the two months after the launch, the growth rate of NX Finance TVL is still good. In terms of proportion, NX Finance TVL is mainly composed of USDC, USDT and JLP.
The asset currently supported by NX is JLP, so the business is actually very easy to understand. From my personal experience, users have a demand for leveraged mining of JLP. 2x JLP leveraged mining can mine 95% APY (need to pay 9.38%-19.86% interest), as long as there is no liquidation, it is profitable (JLP price fluctuations are relatively small).
Let’s talk about the future of Solayer leveraged mining.
I personally think that users also have demand for Solayer leveraged mining, and the demand mainly comes from the market's expectations for Solayer (Binance Labs investment). Using JLP and Solayer as the entry point for TVL is a good decision. After opening Solayer leveraged mining, I expect NX TVL to have a new wave of growth.
In addition, there is an expectation of airdrops for participating in NX Finance, which is an additional benefit besides leveraged mining or saving money to earn interest. The NX Finance TGE time is September 9th, and mining or saving now can get the last part of the fish tail. (NX Finance will start IDO on September 2nd, with a valuation of about 20M, IDO sales account for 15% of the total tokens, and TGE will unlock 100%) After TGE, the circulation of $NX is 20%. According to the IDO valuation, the market value of NX Finance tokens will be 4M.
I don’t think there is a clear valuation system to value it at present. But the growth of the business can indeed attract fundamental players. And it is worth mentioning that market attention is the key - if the market attention can be captured or the project party needs tokens to attract more liquidity (liquidity mining), the token valuation will increase.
Risk Warning (This is a risk that exists in every DeFi project): Smart contract risk (NX Finance has been audited by SlowMist)
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TG Channel (previous market views are shared here): https://t.me/SleepinRain
Reading list: https://docs.google.com/spreadsheets/d/1JSmI-YDvbdxXJ1Tud2sK8mly33zh1VmcH8i5wUgSYs0/edit?usp=sharing
High-quality CT information flow: https://x.com/i/lists/1795371206344130752
