MarginFi, a lending platform for cryptocurrencies on the Solana blockchain, also has a points-based rewards program, said the project’s lead engineer Jakob Povsic. We’ve identified some behaviors, some attributes worth incentivizing – namely borrowing and lending. It seems like points are motivating people to participate.
The points system, which tracks how much a user has contributed to the ecosystem’s success, has nearly quadrupled MarginFi’s total value locked (TVL), breaking the $10 million mark earlier this week. This two-week-old experiment in gamification has also more than doubled the platform’s user base.
Many of the users are depositing liquid staking tokens (LSTs) that represent the SOL they’ve locked up with validators to chase 7% interest. Walker Guffey, the founder of Hello Moon, said MarginFi’s growth hack comes as the Solana ecosystem broadly embraces LSTs, repeating an arc first seen in Ethereum DeFi.
People just want to get something into MarginFi, said MarginFi employee Anders Jorgensen. The obvious answer for what to deposit in search of points is LSTs.
Christian Cuffy, head of business development for cybersecurity firm OtterSec, said on a Twitter Spaces on Wednesday, We’ve been in a bear market for the past year and a half, but we’re starting to see things blow up again in the right direction.
The twin trends of MarginFi’s points system and the Solana ecosystem’s embrace of LSTs are amplifying each other and planting the seeds for what appears to be a renaissance in Solana DeFi, said Guffey.
Cypher, a trading protocol that often collaborates with MarginFi, announced it would soon roll out its own points system to incentivize growth. Marius George Ciubotariu, the project lead for Solana-based stablecoin protocol Hubble, said, Airdrops and points help with that as it kickstarts the rotation play into Solana.
For MarginFi to keep growing it needs more liquidity in the Solana ecosystem – the same problem for all of Solana DeFi. The pseudonymous founder of SolBlaze is cutting trading deals across Solana DeFi to increase bSOL’s prominence, and thus its liquidity, and therefore its caps on MarginFi.
Barrett, the founder of Cypher, said in a Wednesday Twitter Spaces, If your protocol is in DeFi and you aren’t doing something to incentivize activity, you are basically a detriment to the ecosystem.