Solrise Finance (SLRS), a Solana-based decentralized investment platform that allows portfolio managers to create funds governed by smart contracts, has attracted the attention of funders and investors alike as the breakaway token continues its rise into 2022.
Solana is a potent blockchain that can serve many use cases ranging from decentralized finance to non-fungible tokens and everything in between. It achieves consensus using proof of stake, and like Ethereum, can interact with smart contracts.
SOL has been on a tear. Its price rose from roughly $1.50 in January 2021 to a high of more than $215, according to Investing.com. Solana was trading at $144.13 at the time of this writing, making it the fifth-largest cryptocurrency in the world with a market capitalization of $47 billion.
The Solana ecosystem has been of great interest to developers and investors lately. Not only is the native SOL token gaining steam, but several projects on this blockchain have completed funding rounds.
Solrise Finance and the Solflare wallet projects stand out in this ecosystem. Solrise, a project bringing non-custodial solutions to the Solana ecosystem, raised $3.4 million in funding in July 2021. The fund management and investment protocol makes decentralized finance (DeFi) more accessible to investor audiences.
Solflare, one of the top wallet projects moving their crypto apps into people’s pockets, already services staking for $16 billion in SOL. It’s one of the first wallets ever built on the Solana platform, and more than 24 percent of the entire circulating supply of Solana is currently staked via the Solflare platform.
Here are five things you need to know about Solrise Finance.
The protocol created by the Solrise Finance team is disrupting the asset management industry by first using smart contracts to cut out all the intermediaries like fund managers, custodians and exchanges that charge a management fee making transactions expensive to execute.
Solrise says it allows users to allocate capital across actively managed funds, helping make decentralized finance (DeFi) more accessible to wider investor audiences. It says its platform helps lower transaction costs.
“Unlike more traditional investment avenues, Solrise’s non-custodial nature means that fund managers never directly own investor funds, while investors are free to enter and exit funds on their own schedule,” the firm said in a press release.
The only major competitor to Solrise Finance is Enzyme Finance, a similar protocol on the Ethereum blockchain that is currently stuck between a rock and a hard place because the network’s gas fees are incredibly high, making active management very costly to operate. The Ethereum gas fees range from $50 to $400 per trade compared to just $0.00025 per transaction on Solana.
By allowing users to pool their investments behind talented fund managers, it also enables non-traders to access some of the best returns in DeFi as well as professionals to access a new source of fund capital. Solrise combines DeFi with a centralized finance (CeFi-style investment platform) that is accessible to everyone regardless of their capital size. This allows anyone to create an investment fund and manage assets in a non-custodial manner.
Fund managers can also allocate and automate investment pools across different assets including cryptocurrencies, stablecoins and synthetics. Meanwhile, investors can allocate their funds and track asset performance and earnings.
The team that built the Solrise Finance protocol consists of Rust developers with solid backing from well-known venture capital firms. The team, which met while playing video games before venturing into blockchain-related development, has a long history of working together.
“We want the $SLRS token to be a utility and governance mechanism across the whole Solrise ecosystem,” wrote Matthew Martin, co-founder and chief operations officer at Solrise Finance.
The team also worked together to build the popular Solflare wallet from scratch and also built Solana Beach, the most popular dashboard for the Solana blockchain, useful for analyzing the current state of the network.
Stakers like the Solrise platform because of its low fees for managers and investors. Compared to Ethereum, the second-largest cryptocurrency by market cap, Solana transaction fees are a fraction of Ethereum. Staking is also more energy-efficient since Solrise uses a proof-of-stake validation network – which users need to stake their tokens to validate transactions. The transaction cost is as low as $0.01, and the system can run up to 65,000 transactions per second, leading the industry.
The platform also allows users to create their own funds with exposure to assets from across Solana. The viability and long-term success of an investment protocol on Solana is currently unproven, given that the majority of DeFi’s users and liquidity center on Ethereum.
Image: Simple FX / Flickr / Creative Commons, https://www.flickr.com/photos/156376278@N02/48313573256/in/dateposted/ https://creativecommons.org/licenses/by/2.0/
Listen to GHOGH with Jamarlin Martin | Episode 74: Jamarlin Martin Jamarlin returns for a new season of the GHOGH podcast to discuss Bitcoin, bubbles, and Biden. He talks about the risk factors for Bitcoin as an investment asset including origin risk, speculative market structure, regulatory, and environment. Are broader financial markets in a massive speculative bubble?
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