Jet, a Solana-based crypto lending platform, is relaunching with fixed-rate loans, a move that takes a page from traditional finance while many of its crypto rivals continue to offer variable rate products. Jet’s order book design allows borrowers and lenders to set their own terms, including the level of interest rates and payback timelines. According to founder James Moreau, “It’s not some artificially derived APY,” or annualized percentage yield, “It’s entirely market-based.”
Unlike traditional finance, many crypto lending protocols advertise ever-changing interest rates that can fluctuate drastically in a single day. While this can lead to high returns, it also carries a high risk of loss. Jet’s fixed-rate product offers less risk, but may face some friction from big traders who are used to the flexibility of variable-rate products.
Jet’s performance metrics have dropped significantly since late 2021, when the protocol had over $36 million in total value locked. Currently, it is under $200,000. Moreau admits that fixed-rate lending products may not be the spark that brings liquidity back to Solana, but he is hopeful that the product can appeal to DAOs and other on-chain organizations with large, dormant treasuries. He is also targeting traders of staked SOL who are engaged in MEV strategies. “We basically want to see as much of the lending money get borrowed as possible,” Moreau said.