[Asset Onboarding Reapplication] - $scnSOL Socean Finance

[Asset Onboarding Application] - $scnSOL - Socean Finance

Author(s): @eggpanned
Tags: asset-onboarding
Asset Name: Socean Finance
Asset Code: scnSOL
Submission Date: 2022-09-28
Ratification Date:  2022-10-18
Status: Active
Forum URL: https://forum.jetprotocol.io/t/asset-onboarding-reapplication-scnsol-socean-finance/1072

Application Profile

What is your motivation for submitting this application?
The purpose of this application is to provide the Jet Community with details on scnSOL to approve its onboarding as collateral.

What is your association to the proposed asset?
I am the co-founder of Socean Finance, the stake pool of $scnSOL

What are the key benefits to the Jet Protocol for onboarding the asset?
It is widely integrated on many Defi Protocols. The utilisation for it as collateral has been high on other lending protocols such as Solend and Apricot.

What are the known limitations of the asset?
Pegged to SOL, therefore price is dependent on SOL.

Project Profile

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.).

tldr

Socean Stake is a stake pool for the Solana blockchain.

Socean Stake unlocks your SOL, earning you staking rewards while allowing you to participate in DeFi.

Longer description

Solana is a proof-of-stake blockchain where you can earn rewards by staking your SOL tokens. By staking your SOL tokens, you help secure the network and earn rewards while doing so. Everyone who holds SOL should stake SOL. However, there are two main problems with staking SOL.

Firstly, SOL holders face a fundamental trade-off between liquidity and returns. While staking SOL secures the network and grants staking rewards (~6% APY), staked SOL can’t be traded or transferred. This means that SOL holders must choose between locking up their SOL to earn staking APY, or holding unstaked SOL (giving up the staking rewards) in order to participate in the DeFi ecosystem (borrowing, trading, providing liquidity, yield farming etc).

Secondly, the UX of staking SOL is very poor. Staking normally to a validator takes up to three days to activate your stake, and three days to deactivate it. As a result, most SOL holders choose to delegate to only one or two validators. Many stakers will choose to just delegate with validators with a large amount of stake. But this is suboptimal for both network health and APY (high variance if one’s chosen validator underperforms).

The Socean stake pool solves both of these problems. Users can deposit SOL to receive scnSOL tokens, which represent that user’s ownership of the stake pool. We take that SOL and delegate it to validators using an algorithmic delegation strategy which maximises expected returns and minimises variance.

Who are the founding members? What is their current involvement with the project?
The founding members comprises of HY, FP, J and Jesse. They remain the core team of Socean Finance. The founding team actively contribute to core development in the Solana runtime and participate in a variety of Solana ecosystem projects.

Also, the founding team worked with the Solana Foundation for many months, helping to develop and stress-test the Foundation’s stake pool program. We have also received multiple grants from the Foundation to develop the stake pool ecosystem.

Please indicate the ICO date, initial price and valuation of the token and total capital raised (in USD and crypto terms).
NA - No ICO

How much of the capital raised via the ICO was converted into FIAT (in terms of FIAT currency and amount of tokens)?
NA - No ICO

What was the way of issuing and distributing the tokens? Were there pre-ICO investors?
Every $scnSOL is created when SOL is staked - it is a liquid staking derivative that is pegged to the value of SOL and increases in value every epoch, taking into account the staking rewards. In other words, it almost serves as an IOU for the SOL you have staked. NIL.

What is the current token distribution (project team vs. investors vs. public)? Has the token distribution changed over time?
As mentioned above, every scnSOL is created when SOL is staked in the stake pool, as such, 100% of the distribution

Are there any fees generated by the protocol? If yes, please provide details and amounts.
We charge a one-time withdrawal fee (0.06% of transaction size) and an ongoing management fee (~2.0% of staking rewards).

Is the protocol audited? By what firms? Please provide link(s) to the audit documentation.
Socean uses the Solana Foundation’s stake pool program, which we helped to write, develop and audit. In addition, the stake pool program has been audited by Kudelski, Quantstamp and Neodyme .

Other relevant project data or comments:

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Asset Profile

Asset name: scnSOL

Asset type (native/ wrapped): Native

One-sentence description of the asset: Liquid staking derivative of SOL

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

As scnSOL tokens are transferable and tradeable, they can be used in DeFi for utility and extra returns. For example, the scnSOL tokens can be used to provide liquidity in pools like Orca or Saber or as collateral via Solend for borrowing/margin trading. Users can swap scnSOL for SOL instantly via liquidity pools. As scnSOL tokens can always be redeemed for the SOL one put in there is no risk of losing one’s initial capital. In the worst case, scnSOL tokens are no less liquid than SOL staked to a validator.

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

  • Able to be used as collateral on lending protocol Apricot Finance and Solend
  • Covered call vaults on Friktion and PsyOptions
  • LP-ing on Atrix, Orca, Saber, Saros Finance & Raydium

Smart Contract address:
5oVNBeEEQvYi1cX3ir8Dx5n1P7pdxydbGF2X4TxVusJm

Asset Liquidity

What exchange(s) support the asset?

Atrix, Orca, Raydium, Saber

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

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

Which oracles monitor the asset? How many feeds are available?
Switchboard and Pyth. 6.

How often does the asset drop significantly in price?
It is pegged to Solana, so whenever Solana drops significantly in price.

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

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

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

  • 13.5 scnSOL on Friktion ($465k)
  • 12.7k scnSOL on PsyFi
  • 256 scnSOL on Apricot ($9.5k)
  • 20 scnSOL on staked SOL Pool on Solend
  • 17738 scnSOL-SOL LP ($571,876) [Saber]
  • scnSOL-SOL LP ($1299) [Orca]
  • scnSOL-SOL ($939) [Atrix]
  • scnSOL - USDC ($388) [Atrix]

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

Key Mechanics

How many active addresses/ users currently hold the asset?
9,621

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?
Increase - as previously discussed, users deposit SOL to receive scnSOL tokens, which are minted and represent that user’s ownership of the stake pool.

Please explain the staking mechanism (if any).
On Solana, stake pools provide a way to delegate SOL to a validator delegation strategy rather than directly to an individual validator. Deciding which validators to delegate to requires technical skills and ongoing maintenance. With a stake pool, delegators can task a “pool manager” with deciding how to best delegate their SOL. Once delegators identify a stake pool manager or particular strategy they find favorable, they can deposit their SOL into that stake pool and let the stake pool do all the work. In return, delegators receive a stake pool token representing their percentage ownership of the pool.

After delegators deposit their staked SOL into a stake pool, validators in the stake pool will be delegated SOL according to the strategy chosen by the stake pool manager. Delegators who deposit into the stake pool receive stake pool tokens, which represent their proportional ownership of the stake pool. These stake pool tokens represent a delegator’s fractional ownership of the stake pool, and can be treated as a liquid token.

Please explain the slashing mechanism (if any).
NIL

Are there tokens on vesting schedule? If yes, what is that schedule and related vesture limitations?
No

Are any tokens allocated for specific purposes or issuance schedules (e.g. liquidity mining)?
No

Legal Profile

Is the project or the asset owned by any incorporated organization?
a. Y / N
b. Organization Name:
c. Jurisdiction:

N

In which jurisdictions was the token issued?
NIL

Was the token issued as part of regulatory process (e.g. securities offering)?
No

Was the token issued as part of fundraising process?
No

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.
NIL

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

Links

Relevant Solana Addresses

List all relevant Solana addresses here

Marketing / Campaign Material

If you have additional marketing material, recorded discussions, or collateral onboarding campaign material, link here:
Solana Podcast
AMA with Grape
AMA with Jupiter
Cryptonary Podcast

The poll below has been added by the JetDAO Governance Committee and is solely for signaling purposes to showcase the sentiment of the community.

Should $scnSOL be included as an asset type on Jet Protocol?
  • Yes
  • No

0 voters

5 Likes

Welcome to Jet! Great to see your team submit an application to onboard scnSOL to Jet protocol. The overall proposal looks good and glad to see that you have a Pyth oracle now!

Could you provide some information on the liquidity between scnSOL & SOL across dexes? Also, some parts of the application aren’t completely filled out or missing a couple of bits of information.

2 Likes

Hi Bobby! I can’t seem to be able to edit my post.

1 Like

Hi Bobby, I have updated the proposal. Do let me know if there’s any parts that still needs updating!

The JetDAO Governance Committee has completed a high-level review of this Asset Application and determined the asset as acceptable to continue with the Onboarding Application. This is not an endorsement of the asset from the Governance Committee.

To continue the onboarding process, we have launched a 7-day off-chain community sentiment poll (see original application post) to gauge the interest of onboarding this asset, as well as help facilitate the community discussion.

Following the conclusion of the Poll, the Governance Committee will publish a summary of the CODEC assessment with a formal decision of allowing the Asset to move forward with the On-chain governance vote and potentially onboarding.

This Poll will run 7 days, and is used to gauge the interest of the Jet Protocol Community on Onboarding this asset as a collateral to Jet Protocol

6 Likes

Dear Community:

The $scnSOL collateral sentiment off-chain community poll has concluded with a 100% favorable vote. Also, we attach a summary of the CODEC evaluation that the $scnSOL asset has received from the Governance Committee.

The $scnSOL On-chain poll will be executed via the governance platform starting today (10/11/2022) and will be live for 7 days.

While the vote is ongoing please take the opportunity to discuss the proposal with your fellow community members here within the forum and to review the CODEC and executive summary available here.

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

[Summary of CODEC Assessment ] - $scnSOL

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

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

The full CODEC Evaluation Summary can be found here.

Community Discussion Summary:

The community has shown interest in being able to cast their votes in a $scnSol On-Chain poll.

Community Vote Summary:

The $scnSOL collateral sentiment off-chain community poll has concluded with a 100% favorable vote.

1 Like

Dear Community:

The on-chain governance vote for $scnSOL has concluded.
We thank all those who have chosen to vote and help both build Jet’s future and support the use of the asset.

With 97% of voting stakers “in favor” of JDAP-13, the vote has concluded to include $scnSOL as a collateral type in Jet starting at the next protocol update.

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

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

2 Likes