Add SRM as collateral for Jet Protocol

Hi everyone. Adrian from the Serum community here. Great to see Serum and Jet working together to provide infrastructure for on-chain liquidations.

SRM is becoming an important asset in the Solana ecosystem and it would be great to be able to expand its utility with composing projects.

Thanks Adam for putting together this template to apply for SRM to be used as collateral on Jet Protocol.

To give you a quick summary of what Serum is: Serum is a protocol for decentralised exchanges. It provides a decentralised order book for the Solana ecosystem, all on layer 1. Jet protocol composes with Serum by placing limit order bids directly on Serum’s order book to liquidate insolvent accounts.

Collateral Asset Profile

  • Collateral Name (and symbol): Serum (SRM)

  • Collateral Short Description: The Serum token (SRM) grants its holders governance rights to the protocol, protocol rewards, discounts on trading fees, and other rights.

  • Total Value in Circulation: 133,231,781 (Note that this is currently increasing at a rate of approximately 5.5m per month).

  • Total Value on Solana: There are 10bn tokens in total. More info in our docs.

  • Price Oracle Feeds:

Proposal

Detailed description of the asset and the reason(s) the Jet Community should consider onboarding it.

SRM is Serum’s utility and governance token. Currently, 100% of Serum fees are directed towards SRM buy and burn. In the future, a percentage of these fees may go to rewards distribution when the DAO decides to vote on Serum fee distribution.

Serum’s matching service and order book architecture powers many projects building within Solana, including Jet Protocol’s liquidation feature. The Serum community looks forward to strengthening a positive and healthy relationship with the Jet community: having SRM as collateral on Jet will attract significant traffic from Serum, reinforce SRM’s utility, and advertise Serum to the Jet userbase.

Use Cases

Traders and developers that hold SRM…

Serum (and SRM) is one of the first projects (and tokens) in the Solana ecosystem, and Serum is an extremely well-known and highly used financial primitive. Holding SRM improves the trading fees of any Serum-based UI or any dApp that composes with Serum. Holding SRM also makes one eligible for partaking in Serum’s governance via voting rights: voting will affect important issues ranging from protocol features, SRM grants to ecosystem contributors, fee structures, and other DEX parameters.

Relevant Metrics

  • Total Value In Circulation: 133,231,781 (Note that this is currently increasing at a rate of approximately 5.5m per month).

  • Total Value Locked: 9bn tokens are subject to the same long term (7 year+) lockup schedule.

  • Age of Asset: ~14 months

List sources for metrics in #Additional-Links

https://projectserum.medium.com/srm-unlock-8e74f23d829f

Risk

  • Technical Risk: Serum is unaudited (though audits are in progress).

  • Counterparty Risk:

  • Liquidity Risk: Serum markets require market makers for usability.

  • Price Feed Risk:

  • Bridge Risk:

  • Other Risk:

Additional Links

  • Any links used for reference or research in this creation of this proposal.

  • Links to any available audits of the project.

11 Likes

Official Links 1

https://www.projectserum.com/

Official Links 2

2 Likes

I have a technical question. Would it be possible for the JET community to vote in Serum’s governance using any deposited SERUM tokens on the platform?

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I wonder if it is a really great idea to add a coin whose FDV makes one scratch their heads.

SRM has wild price swings, lacks decent liquidity, don’t think it would be wiser for borrower to borrow with SRM as collateral.

I’m indifferent of adding SRM on a fundamental level but I believe our market has spoken and SRM seems to be a major asset across most of Solana’s Defi platforms. Not saying we should add it because everyone else does. But we can easily see SRM is used as a collateral and DeFi users also borrow SRM from other protocols. There’s no denial that the market uses SRM.

I disagree with ezio on everything in his comment. And I also am skeptical of ezio’s intent on proposing adding the most controversial crypto asset in the space(USDT) and making negative comments on adding SRM.

SRM’s wild price wings relative to what crypto asset? Lacks decent liquidity relative to which SPL token? I don’t think Bitcoin’s wild price swings have prevented us from using Bitcoin as a collateral and SOL’s liquidity is low compared to many other real world assets .

ezio personally doesn’t think it’s wise for borrowers to borrow with SRM as collateral but shouldn’t we let the market decide on that? Do user borrow and deposit SRM on Mango, Solend, and Port? As of my writing SRM is the 3rd most utilized asset on Mango and Port.

Every user’s risk tolerance is different, we should not dictate how much risk a user should take on its Jet positions.

I can argue SRM has lower price swings and higher liquidity than 90% of SPL tokens on the market.

SRM’s FDV is irrelevant of whether SRM is too risky of an asset for our users. FDV is determined by the market.

At the end, I’m indifferent on adding SRM. But if we vote today, I’d vote yes.

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“most controversial crypto asset”

lol

You mean how bitcoin is? Every lawmaker attacking it? China banning it? Competitors fudding it? They just settled with CFTC. If tether wasn’t there I doubt crypto would’ve grown to where it is today.

About SRM, if there is demand, well who am I to stop it. I just stated my mind. When SOL went down 10% SRM went down 20%/30%.

SRM is a hyper-inflated coin made by closed-doors VC money. No fair distro. I won’t support it.

This is good though. I’m in for it

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Hello Adrian.
Serum is the backbone of liquidity in Solana. The team and the technology is excellent, and Serum Foundation is doing wonders expanding the ecosystem.
SRM is a very robust token that should TOTALLY be used as collateral!

For Jet, this is actually, as the French say, “immanquable”, meaning “can’t do without”.

approval,SRM is main asset in solana ecosystem,but ray is a better choice for jet protocol in my opinion.

Yes I agree I’ll be happy to see it done

There’s no Solana DeFi without Serum.

there’s no solana defi without serum absolutely, the tokenomics of srm are awful tho.

i think that would have to do with how serum structures the dao itself

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i think this SRM demand is large, i support it.

This is one of if no the most heavily borrowed assets in Solana ecosystem. Do it yesterday!

Wouldn’t be a bad idea. Let’s Keep jetting

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I support this because:

  1. SRM is a legit part of the SOL ecosystem, and we’re all in this together
  2. using SRM as collateral is a good way to create price discovery for SRM
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@eyevzz Any thoughts on this proposal?

Thanks for pinging me, @adamdelsol. I would like to get a clear picture of the liquidity in SRM pairs on Serum. Do we have any forum members able to use e.g. py-serum to produce plots of liquidity in bids and asks as function of spread from the mid price?

I’m thinking about being able to safely liquidate positions when required.

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