What is Solayer? EigenLayer successor project on Solona?

Solayer places special emphasis on combining tools such as sUSD and RWA backing to create a flexible, secure, and cost-effective financial ecosystem for users.

INSIGHTS

11/11/20245 min read

Restaking is a model that brings double benefits to investors and the ecosystem, because in addition to profits from traditional staking, users can also participate in services such as network security, participate in DeFi protocols, a project launched on Solana is Solayer!

Solayer is a blockchain platform designed to support DeFi, providing solutions for payments, collateral, and financial transactions.

With the goal of improving scalability and transaction speed, Solayer leverages Layer 2 technology and mechanisms such as RFQ (Request For Quote) to optimize transactions on the blockchain network.

Solayer places special emphasis on combining tools such as sUSD and RWA backing to create a flexible, secure, and cost-effective financial ecosystem for users.

So how did sUSD do that? Let's find out through this thread!

sUSD is a stablecoin designed to solve some of the problems of traditional stablecoins like DAI, USDT or USDC. Here are the factors that make sUSD stand out:

Decentralized and permissionless: One of the key factors that sets sUSD apart is its design, which does not require approval or control from financial intermediaries. This reduces reliance on third parties and increases transparency, security, and freedom for users.

Automatic profit mechanism: sUSD is not only a stable stablecoin but also generates profits for its owners through participation in DeFi mechanisms.

Flexibility and Interoperability: sUSD supports multiple blockchain platforms, making it easy for users to move and transact between ecosystems without worrying about synchronization issues or high transaction fees.

The yield mechanism of sUSD generates and distributes yield mainly through DeFi. Specifically, this method includes:

Staking and Yield Farming: Users can use sUSD in staking pools or yield farming to earn interest. Profits from providing liquidity will be automatically distributed to users' accounts.

Automation through Smart Contracts: The sUSD profit distribution mechanism is implemented through smart contracts. When users hold sUSD and participate in DeFi transactions, the profits from those transactions will be calculated and distributed automatically to stablecoin owners.

Integration with major DeFi platforms: sUSD can be used to provide liquidity in decentralized exchanges or other DeFi products, generating returns from activities such as lending, borrowing, and trading digital assets.

sUSD's decentralized and permissionless design offers several important benefits:

Financial Freedom: No need for approval from banks or financial institutions, this allows users to access and use sUSD anytime, anywhere, without being limited by third-party control policies.

Transparency and Security: Transactions and data related to sUSD are recorded on a public blockchain, ensuring that these transactions cannot be altered or tampered with. This enhances the transparency and reliability of the stablecoin.

Global Accessibility: The lack of permissions makes sUSD accessible to users globally, including countries without developed financial systems or those without bank accounts

The RFQ (Request For Quote) and RWA (Real World Asset) backing mechanisms are important factors that help ensure the stability and value of sUSD. Here is how they support sUSD:

RFQ (Request For Quote): RFQ is a mechanism where users request quotes from liquidity providers to be able to execute large trades or exchange assets. Solayer uses RFQ to connect liquidity providers and enable users to trade sUSD quickly and at a reasonable cost.

RWA (Real World Asset) Backing: sUSD is backed by real assets, namely T-Bills. This means that a portion of the value of sUSD is backed by assets outside the crypto market. This enhances the stability of sUSD, as it is not only dependent on the volatile crypto market but is backed by more stable assets in the real world.

In the future, if sUSD can add more RWA assets as support (such as real estate, stocks, or other financial assets), the demand for owning and using sUSD will be very high.

sUSD provides exoAVS (external AVS) economic security . This is a special economic security mechanism that sUSD uses to protect users' transactions and assets:

Multi-layered Security: exoAVS provides security across multiple layers, including strong encryption, multi-factor authentication (MFA), and other complex security protocols to ensure that user assets are always protected from external threats.

Control against bad actors: exoAVS not only protects transactions but also helps prevent fraud, Sybil attacks, and other attacks on the system. It creates a safe environment to conduct transactions without worrying about security issues.

Protecting the Open System: exoAVS allows the open internet to access and transact on the platform without facing traditional security issues. This allows organizations and users to participate in the sUSD network without worrying about security issues.

A concrete example of using sUSD is in yield farming on Solana. Let's say you are a user who wants to earn yield by providing liquidity to a decentralized exchange (DEX) on Solana. You can deposit sUSD into a DEX liquidity pool like Raydium.

Providing liquidity: You deposit sUSD into a decentralized exchange's liquidity pool, where other users can trade sUSD against other assets.

Earn Trading Interest: When others trade on the DEX, you receive a portion of the trading fees corresponding to the percentage of liquidity you provided. This fee is divided among liquidity providers, including you.

Automatic Profit: Profits from trading fees are automatically distributed to your wallet in the form of sUSD, allowing you to grow your assets without having to take manual steps.

Stable Liquidity: Since sUSD is a stablecoin, you don't have to worry about value fluctuations while participating in yield farming

In short, sUSD can be applied in many use cases in decentralized finance (DeFi) systems and blockchain platforms.

sUSD as "savings account"

Users can hold sUSD as a decentralized savings account on Solana, benefiting from the stability of sUSD – a stablecoin pegged to the US dollar. This protects the value of users’ assets from the volatility of the cryptocurrency market, while also making it easy for them to convert, use, or invest sUSD in other DeFi services without going through complicated steps.

Securing decentralized systems

sUSD can also be used as rewards or collateral to promote security for decentralized protocols on Solana. By staking or restaking sUSD, users can help secure the network and protocols, and receive rewards for contributing to the stability and security of the ecosystem.

Collateral and transactions

In DeFi protocols, sUSD can serve as collateral for loans, allowing users to borrow more assets without having to sell sUSD. This helps users maintain sUSD liquidity while optimizing assets in the Solana ecosystem.

Pay

sUSD can be used to pay for services and products within the Solana ecosystem, with the advantage of stable value. Thanks to this stability, sUSD is an efficient means of payment, allowing users to transact and spend without worrying about value fluctuations like other cryptocurrencies.

Conclude

sUSD is a powerful stablecoin that can be used for many purposes in the decentralized finance ecosystem.

Using sUSD as a savings account, collateral in transactions, decentralized system security, and in fast and economical payments brings many benefits to users, helping to optimize assets and increase transparency in financial transactions. Automated

mechanisms, strong security, and the ability to integrate into DeFi ecosystems make sUSD an important financial tool in the future.