Solana's Jupiter Breaks Down Barriers Between Lending and Liquidity Provision
Jupiter, a Solana-based decentralized finance (DeFi) platform, has introduced an upgrade to its lending product, called Lend v2. This upgrade allows borrowed assets to be deployed as decentralized exchange liquidity, potentially generating trading fees that can offset the cost of borrowing.
The new Smart Debt feature lets users opt in to have their borrowed assets used as DEX liquidity, earning them trading fees while minimizing risk. Eligible positions can earn lending yield, DEX trading fees, and native staking rewards. The underlying borrowing process remains unchanged, and users who do not want DEX exposure can continue using the platform's conventional lending features.
Jupiter COO Kash Dhanda said: 'There's been a wall between the two primary ways people earn APY onchain, lending and LPing.' He added that Lend v2 brings down this wall by letting users opt in to let their liquidity work as both lending and AMM liquidity at the same time.
The upgrade also includes Lifetime PnL, which provides a historical view of a position's performance, combining lending yield, borrowing costs, and trading fees over the position's lifetime. Both Smart Collateral and Smart Debt features are optional, giving users more flexibility in managing their assets.