A New Beginning ◾️
A New Beginning ◾️
mrgn is taking the next big step towards ultimate DeFi composability. Here's how:
In 2,000 B.C. the first lending practice was recorded in Mesopotamia. Farmers were using payday loans to make it through crucial intermediate costs before they received their next paycheck
Today, the trend continues. We use lending and borrowing every day. Whenever you need a pencil from a friend, whenever you pay back a bit of your mortgage, even when you send money to a friend… you participate in the global web of lending and borrowing.
Lending and borrowing is commonly associated with banks, the most powerful financial institutions in the world. Banks are largely responsible for laying the foundation for the financial system we use today. The problem is, that the financial system is old, gated, opaque, and unfair.
Defi is here to reinvent that system, with access and transparency at the forefront. Although the goals are different, many of the building blocks we see in tradfi are the same. Borrowing and lending, for one, is just as critical to defi as it is to finance.
On the flip side, without a robust borrow/lending decentralized application, defi as a whole will struggle.
Those struggles have been clear recently on Solana. Borrowing and lending across crypto is used for market-making, passive yield, short-selling, liquidation capital, and a range of composability vectors. The liquidity needs surrounding these use cases haven’t been sufficient to serve the needs of DEXs on Solana. We’re here to change that.
At mrgn, we’ve been at the heart of composability since day 1. In 2022, we became the first team in crypto to cross margin perps across different DEXs (starting with Mango Markets and 01 Exchange). Now, we’re ready to provide the liquidity foundation to extend those cross-margining capabilities.
It’s important to reflect on why borrowing and lending on Solana has faltered. It centers on risk. We watched a bull market emerge in 2021 where risk was neglected. The bear market in 2022 meant risk was tested — in many cases, the systems in place weren’t set up to handle this switch. We have deep backgrounds in risk at mrgn — even recently having weathered through the Drift pause, the Mango Exploit, and Solend’s whale mis-management.
On the flip side, properly managing risk gives market-makers liquidity, gives long-tail assets price discovery (through shorting), enables leveraged products to be built, provides capital efficiency when yield farming, gives traders flexibility around the assets they use (like avoiding slippage), and generally allows a defi ecosystem to flourish.
On Ethereum, Compound and Aave have laid a solid foundation for the experimentation we’ve witnessed across ETH. Now’s the time for Solana to do the same.
marginfi set out to be the “prime broker/clearing house” of Solana — and of performant blockchains in general. We’re now taking the next step, starting from giving traders access to different DEXs with unified liquidity (in USDC), now to deepening that liquidity and expanding the assets traders can utilize.
There’s a lot more coming. If you’re reading this, you’re early. Jump in the water, there’s so much waiting for you :)
What’s next? Documentation, a product spec, and open source.
How soon? Very soon — our alpha group is going live on Jan 16. If you’d like to join our alpha, DM Anders
Where will this be used? Across DEXs on Solana by traders, passive farmers, big hodlers, and more. In particular, this will be a liquidity hotspot heavily utilized by mrgn research (giving lenders great rates)!
Why mrgn? We’re a team with deep backgrounds in finance, tech, security, robotics, and risk. We’ve built and exited successful companies, managed talented teams, and built products that people love. We’re heavily committed to making Solana DeFi the success it’s destined to be while driving volumes to partner DEXs in the process.
Will there be $BONK? Absolutely.