[Asset Onboarding Application] - $SOL - Solana

It’s that Token Tuesday time of the week everyone! I hope you’re doing well.

Below, you will find the second asset to be formally proposed for onboarding through JetDAO’s Asset Onboarding process. This application serves a similar purpose as the USDC application; to confirm the DAO’s desire to have the already listed $SOL asset as a collateral type on Jet Protocol, and to continue highlighting the Asset Onboarding process.

Today marks the submission of this application, as well as the start of the Community Discussion, and Community Sentiment Polling (found at the bottom of this post). You are encouraged to discuss the pros and cons of adding this asset as a collateral to the Jet Protocol, as well as vote in the off-chain informal poll below. Off-chain polling will conclude on Monday 6-June . We will then move this vote On-Chain on Tuesday, 7-June to confirm JET token holder’s stance for using $SOL as a collateral.

As a reminder, voting On-chain for the USDC application concludes 2-June 15:00 UTC. Vote here if you have not done so yet.

[Asset Onboarding Application] - $SOL - Solana

Interested Party Profile

Party submitting application: Winfred K. Mandela
Contact: winfred@jetassociation.org
Submission Date: 31-May-2022
If endorsed by Jet Community Member, list here: Memeber of Jet Core team 

Application Profile

1. What is your motivation for submitting this application?

The main motivation of this application is to be able to provide the possibility of making deposits and taking loans using SOL token in Jet Protocol. In the following summary, details will be provided as well as the CODEC analysis of it.

2. What is your association to the proposed asset?

None

3. What are the key benefits to the Jet Protocol for onboarding the asset?

Having SOL as a collateral type, Jet will be allowed to interact with the 399M circulating supply of tokens and allow the 291K active wallets to interact with Jet services.

4. What are the known limitations of the asset?

The fact that SOL price fluctuates in notable percentages, we can consider it a relatively risky collateral asset compared with e.g BTC or ETH.

Project Profile

1. Please provide a brief, high-level description of the asset’s native ecosystem (project), including protocol’s type (peer-to-peer/ peer-to-liquidity/ etc.).

Solana (SOL) is the name of the native token of the Solana blockchain. Mainly focused on the speed and price of transactions, Solana proposes a new blockchain structure based on the high frequency Verifiable Delay Function “Proof Of History”. As its name indicates, this proof of order verification and passage of time between events, together with its Tower BFT (Byzantine Fault Tolerance) consensus mechanism, place Solana at the top of the blockchain in terms of effectiveness and accessibility

2. Who are the founding members? What is their current involvement with the project?

The founding members, Anatoly Yakovenko ,Raj Gokal, Eric Williams, Greg Fitzgerald are still working on Solana Labs & Solana Foundation. The Solana Foundation helps fund ongoing development and Solana Labs remains as a core contributor to the network.

3. Please indicate the ICO date, initial price and valuation of the token and total capital raised (in USD and crypto terms).

10 PM PST on March 23 2020 until 4 AM PST on March 24 2020.
Auction Type: Dutch Auction
Dates: March 17 Deposits Open & Pre-bids start. March 23: 6 hours for live auction.
Participants: Non-US.
Starting Bid: $4/token.
Reserve Price: $0.04/token.
Minimum Bid: $100.
Supply: 8M (1.6% of the genesis block distribution)

4. How much of the capital raised via the ICO was converted into FIAT (in terms of FIAT currency and amount of tokens)?

Since the investments rounds were made through USDC / USD, the raised amount was originally Fiat.

5. What was the way of issuing and distributing the tokens? Were there pre-ICO investors?

Apr 2018. Seed Sale. 79.9M Tokens. $0.04/token. $3.1 M Raised
Jun 2018. Founding Sale, 63.1M Tokens, $0.2/token. $12.6 M Raised
Jul 2019. Validator Sale. 25.5M Tokens. $0.225/token. $5.7 M Raised
Feb 2020. Strategic Sale. 9.1M Tokens. $0.25/token. $2.3 M Raised
Mar 2020. ICO (Dutch Auction). 8M tokens. ~$0.32/token. $25.6 M Raised.

6. What is the current token distribution (project team vs. investors vs. public)?

Initial 500M genesis block tokens distribution: Investors 35,6 % / Community 33.9 % / Foundation 12.5 % / Founders 12.5 % / Grant Pool 4.6 % / Auction 1.6 % . We can say that the distribution has changed over the time and will keep changing since the projected supply for the year 2032 is ◎746,913,269.

7. Are there any fees generated by the protocol? If yes, please provide details and amounts.

Each transaction sent through the network, to be processed by the current leader validation-client and confirmed as a global state transaction, contains a transaction fee.

In an attempt to create a sustainable economy through protocol-based rewards and transaction fees, a fixed portion (initially 50%) of each transaction fee is burned, with the remaining fee going to the current leader processing the transaction.

For more information about how fees works on Solana, visit this link.

8. Is the protocol audited? By what firms? Please provide link(s) to the audit documentation.

Solana’s software architecture was audited by Kudelski in November 2019.

9. Other relevant project data or comments:

Asset Profile

1. Asset name:

SOL

2. Asset type (native/ wrapped):

Native

3. One-sentence description of the asset:

SOL is the native token of the Solana blockchain.

4. What’s the purpose of the asset within its native ecosystem?

SOL is used to pay the network fees as well as a token reward from the staking system.

5. Does the asset have any use outside of its native ecosystem (integrated protocols)?

Yes, SOL could be used as a trading asset on all the centralized exchanges and could be stored on hardware wallets. Users are also able to bridge their tokens to different blockchains.

6. Please provide all Smart Contract address.

Asset Liquidity

1. What exchange(s) support the asset?

SOL can be traded in all the exchanges.

2. Does the asset have liquidity on Serum? What is the liquidity depth (resting orders)?

Yes, SOL has liquidity on Serum.

3. Please provide 7-day asset trading history (daily aggregated trading volumes for trading pair of asset with USDC).

4. Which oracles monitor the asset? How many feeds are available?

Pyth provides data feeds to SOL.

5. How often does the asset drop significantly in price?

SOL has suffered a downside from NOV-2021 until today. The motives are attached to the bear market situation.

6. For stablecoins only : Has the asset ever lost the peg? If yes, for what reason?

N/A

7. For wrapped assets only : Which bridges are used? Are they custodial or non-custodial? Are they audited?

N/A

8. What amount of asset’s liquidity exists in the integrated protocols (if applicable)?

9. List any parties interested in taking part in liquidations for the proposed asset type.

SOL as the native asset that powers the Solana Network attracts a wide variety of parties interested in liquidations, from smaller users to institutional investors.

Key Mechanics

1. How many active addresses/ users currently hold the asset?

495k Active addresses.

2. Is the asset supply expected to increase or decrease over time? Is there a token burn mechanism? Is the project able to mint more tokens in the future?

The total supply is expected to increase over time. The following chart exposes how the circulating supply has increased since august 2021.

3. Please explain the staking mechanism (if any).

Users can Stake their SOL tokens by delegating them to validators who process the transactions and thus run the network. Token holders can enjoy this financial model by sharing both profits and risks with the rest of the delegators.

4. Please explain the slashing mechanism (if any).

Yes, there exist a Slashing mechanism for Solana validators, as the “Slashing Rules” state in the Solana Documentation: “We intend to implement slashing rules which, if broken, result some amount of the offending validator’s deposited stake to be removed from circulation “

5. Are there tokens on vesting schedule? If yes, what is that schedule and related vesture limitations?

Nine-month lockup after network launched for the three pre-launched private sales. Nine-month lockup after the network launched for 12.5% of the initial supply, these tokens will vest monthly for another two years and are expected to be fully vest by January 2023.

The Grant Pool and Community Reserve, represents 38% of the initial total supply. These tokens together started to vest in small amounts since Mainnet launch. The entire allocation for these two categories was totally unlocked in Jan 2021.

6. Are any tokens allocated for specific purposes or issuance schedules (e.g. liquidity mining)?

N/A

Legal Profile

1. Is the project or the asset owned by any incorporated organization?

Yes, Solana Labs & Solana Foundation.

2. In which jurisdictions was the token issued?

San Francisco, California, US

3. Was the token issued as part of regulatory process (e.g. securities offering)?

No, SOL is not registered with the SEC as a security token.

4. Was the token issued as part of fundraising process?

Yes, there were several rounds of fundraising noted above, pre ICO. The latest fundraising round was completed in June 2021 for $314 M.

5. Has the project or the asset obtained any legal opinions on the regulatory standing of the token? If yes, please provide links to the relevant documentation.

N/a

6. Has the project or the asset had any legal interactions? If so, describe and provide documentation.

N/a

Links

Link to project’s white paper:

Link(s) to active communities related to the project:

Link(s) to project’s documentation portal/ source code for the system(s) that interact with the proposed asset:

Link(s) to audits - both procedural and Smart Contracts:

Link(s) to legal opinions:

  • N/a

Link(s) to other legal material:

Other relevant links:

List all relevant Solana addresses here:

Should JET/SOL be included as an asset type on Jet Protocol?
  • Yes
  • No

0 voters

6 Likes

This one is a no-brainer.

Let’s get it done

5 Likes

In support of this. Great write-up once again. Very clear and informative.

6 Likes

I think $SOL is too volatile of an asset to be a collateral asset type. $SOL has lost 80% of value in USD in 6 months. If half of the Jet users used $SOL as a collateral asset and borrowed just 15% of the collateral value(666% C-Ratio) in November 2021, half of Jet users would have gotten liquidated. Please reconsider.

1 Like

Regardless of volatility - how easy is it to liquidate? This is what I see as most important for an asset of this importance.

4 Likes

Agreed. Plus, with the exception of Bitcoin (which has also lost a decent chunk of its value in the last 6 months - just not to the degree of altcoins), the same could be said about majority of altcoins.

2 Likes

Agree. This is a very informative write-up especially on the fund raise section. :slight_smile:

Also, SOL is not registered as security token. What are the repercussions to Jet Protocol and its US users if SEC eventually categorizes $SOL as an unregistered security token by using the Howey tests?

@erics our evaluation criteria is straight forward - if something is registered as a security (or not) is black and white and if the findings change for whatever reason the DAO have an asset-offboarding process to address that. This applies for any asset whether it’s problematic from a technical or non-technical POV. We cannot predict or evaluate for what-if’s.

2 Likes

Are we still on track to have the on-chain vote for this today?

1 Like

The proposal is now live!

3 Likes

Dear Community Members:

Below we will detail the results of the Off-chain, community sentiment vote for the $SOL proposal. Along with this, we attach a summary of the CODEC evaluation that the $SOL asset has received from the Governance Committee.

We invite those users who have staked JET tokens to cast their vote in this On-Chain vote. Remember that in order to execute your vote you must have at least 1 (One) JET token deposited.

The $SOL On-Chain voting will be executed via the governance platform starting on 07/06/22 and will be live for the following 7 (Seven) days.

We appreciate your collaboration and invite you to participate in the upcoming proposals! For the latest information, visit our sites:

[Summary of CODEC Assessment ] - $SOL

The following summary exposes the key points from the $SOL Collateral Onboarding Domain Evaluation Criteria.

Overall, the Jet Governance Committee endorses $SOL to move forward with an On-Chain vote.

The full CODEC Evaluation Summary can be found here.

Click this link for the full version of the asset’s application.

Community Discussion Summary:

Users have shown appreciation and motivation to move towards on-chain voting to continue to be able to use $SOL as collateral on Jet Protocol.

Community Vote Summary:

With 96% positive votes for the acquisition of SOL as collateral in Jet, the community strongly supports the continuance of $SOL as a collateral on Jet Protocol.

2 Likes

Jet GIF - Jet - Discover & Share GIFs

LET’S GO!

2 Likes

Fully support this. Regardless of volatility, I think it makes sense for the native token to be accepted as collateral. No different than Maker accepting ETH as collateral IMO.

4 Likes

$SOL On-Chain Results

Dear Community:

The second ever on-chain governance vote for onboarding an asset as a collateral to Jet Protocol has concluded. We appreciate all those who have cast their vote; you are helping build the future of Jet Protocol.

The poll to retain $SOL as a collateral concluded with 100% of the vote, and approximately 2.6M tokens, voting IN FAVOR of the asset.

In case you want to review the $SOL application, community discussion, and CODEC Summary, please go to this link.

We look forward to your participation in the next governance vote !

3 Likes