Solana’s $1.9 Billion Giant Makes a New Move: Double Earnings with a Single Asset

Solana-based lending giant Jupiter is allowing users to earn both interest and swap fees on the same asset with its new Lend v2 product.

Jupiter, one of the largest lending protocols in the Solana ecosystem, is taking capital efficiency in the decentralized finance (DeFi) world to the next level. Hosting approximately $1.9 billion in deposits, the platform is paving the way for investors to generate returns from two different streams with a single asset through its newly launched Lend v2 version. In this way, every unit of value in the wallet earns interest as a loan while also taking a share of swap fees by trading in the liquidity pool.

The new update brings two optional features called Smart Collateral and Smart Debt. Thanks to Smart Collateral, when users deposit assets such as USDC, USDT, SOL, or JupSOL as collateral, these assets are automatically directed to a liquidity pool. Smart Debt, on the other hand, allows borrowed assets to be evaluated similarly, reducing borrowing costs with the swap fees earned.

Efficiency Grows in DeFi: Lending and Liquidity Merge

Jupiter Chief Operating Officer (COO) Kash Dhanda states that with this innovation, they are breaking down the walls between lending and liquidity provision. According to Dhanda, this design will contribute to the growth of the entire market by offering higher deposit rates and cheaper borrowing opportunities. Currently holding $822.7 million in active loans, the protocol aims to revitalize stagnating credit volume with these new features.

However, this system also brings some risks. Especially on the collateral side, users may experience losses if the price balance of the assets is disrupted (depeg). To manage this risk, the system can currently only be used for correlated, price-parallel stablecoin pairs and SOL derivatives. Jupiter’s transaction router continues to direct users to the most advantageous pools by remaining neutral to find the best price.