Solana Jet-Based Crypto Lending Platform Pivots To Fixed-Rate Term Lending

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Solana-based crypto lending platform Jet is relaunching with fixed rate loans, taking a page from traditional finance even as the majority of its crypto rivals cling to variable rate products.

Jet uses an order book design where borrowers and lenders set their own terms, including the level of interest rates and repayment terms.

It’s not an artificially derived APY, or an annualized percentage return, said founder James Moreau. It’s completely market-based.

This is how most capital moves in the global economy. In crypto, things are different; loan protocols advertise ever-changing interest rates that can skyrocket and crash the same day. The advantage is that you could make a lot of money by taking a lot of risk. The downside is that you probably won’t.

Even with less risk, Moreau said, the Jets model faces friction from large traders like market makers who have grown accustomed to the flexibility of variable rate products, where they can often withdraw their money at any time (assuming the utilization rate is not too high, of course). With a fixed rate product, their crypto is locked for the duration of the contract.

The Jets’ own performance metrics, like almost all Solana protocols, have fallen sharply from their highs at the end of 2021, when the protocol had a total locked-in value of more than $36 million, according to DeFLlama. These days, it’s under $200,000.

Moreau admits that fixed-rate loan products are unlikely to provide the spark for a cash rush to Solana. But he hopes the product can appeal to a niche of DAOs and other on-chain organizations that have large, dormant cash treasuries they can tap into.

Staked SOL traders can also find a very simple use case for acquiring money easily through Jet, Moreau said. It targets those engaged in Maximum Extractable Value (MEV) strategies and staking SOL.

We basically want as much of the loaned money as possible to be borrowed, and so that’s what I’m working on, Moreau said.

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