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Breakpoint 2023: Reviving DeFi on Solana with Composability and Asset Backed Perpetuals

Zoheb Shahzan of Flash Trade delves into how asset-backed perpetuals and composability are reviving DeFi on Solana.

The notes below are AI generated and may not be 100% accurate. Watch the video to be sure!

Summary

In a detailed exposition at Breakpoint 2023, Zoheb Shahzan, the founder of Flash Trade, presented his insights on the current challenges facing decentralized finance (DeFi) and the solutions his team is implementing to invigorate the Solana DeFi ecosystem. Shahzan's primary focus was on the innovative application of asset-backed perpetuals and the power of composability within Solana to create a more robust, liquid, and user-friendly DeFi experience that could rival centralized exchanges.

Key Points:

Composability in Solana’s DeFi Ecosystem

Zoheb Shahzan highlighted the importance of composability for the Solana ecosystem. Composability allows different programs and protocols to interact seamlessly, which is essential for the functionality and growth of the Solana DeFi space. Despite its complexity, such as the intricacies of cross-program invocation (CPI), composability is seen as necessary to connect the otherwise modular architecture of Solana.

The Rise of Asset Backed Perpetuals

Shahzan stressed the significance of asset-backed derivatives and their role in rebuilding trust within the DeFi ecosystem, especially after the ecosystem encountered issues such as liquidity crises and unreliable bridged assets. Flash Trade introduces a model where such derivatives are backed by real assets, which helps to establish trust and enable liquidity – a cornerstone for the operational efficiency of protocols.

Flash Trade’s Approach to DeFi

Flash Trade's mission is to enhance user experience and bridge the gap between DeFi and centralized exchanges. By integrating innovations such as pool-to-peer oracle-based asset-backed coin margin perpetuals and incorporating elements only possible on Solana, like low latency and more efficient risk management, Flash Trade aims to revolutionize DeFi trading experiences.

Facts + Figures

  • Flash Trade has engineered composability in various protocols and created a market-making fund for Mango with over $100 million in volume.
  • The DeFi TVL (Total Value Locked) on Solana has seen a significant decline, which Flash Trade aims to reverse.
  • Flash Trade introduces pool-to-peer perpetuals backed by a diversified multi-asset pool, which allows for lending of asset exposure and real yield to LPs.
  • The protocol advertised up to 100x leverage on trades, emphasizing a fast and transparent user experience.
  • Flash Trade is currently available on DevNet for trial, emphasizing easy access without a need for a personal wallet.

Top quotes

  • "Composability is necessary because programs and state are modular."
  • "We decided to build back stronger and better with Flash Trade."
  • "Once you are able to establish trust in the assets that you have, you can use that for all of our trades."
  • "It's our job to bring [liquidity] back up."
  • "We're going to make perpetuals great again with Flash Trade."
  • "Offering up to 100x leverage. You don't want to miss an island."
  • "Your identity now becomes transferable which is what the whole idea of Flash Trade has been."

Questions Answered

What is composability in the context of DeFi on Solana?

Composability in DeFi on Solana refers to the ability of different decentralized applications to interact and operate seamlessly with one another. This interoperability is essential for creating complex financial services on the blockchain, despite it being a complicated process that involves cross-program invocations.

Why is asset-backed perpetuals important for DeFi on Solana?

Asset-backed perpetuals are essential as they provide a foundation of trust for DeFi operations on Solana by ensuring that each derivative is backed by real assets. This approach enhances liquidity and stability, reduces counterparty risks, and helps to prevent issues that can arise from reliance on bridged or non-transparent assets.

What problems is Flash Trade trying to solve?

Flash Trade aims to solve several problems, including poor user experience in DeFi, liquidity issues, trust in assets, and the siloed operation of DeFi and NFT ecosystems. They are focusing on creating an intuitive trading experience with easier access, transparency, and integrating NFTs for identity and data representation.

How does Flash Trade intend to rival centralized exchanges?

Flash Trade plans to compete with centralized exchanges by offering a user experience that is on par, if not superior. Through low fees, high leverage options, and a platform that leverages the unique strengths of the Solana blockchain, like low latency and transparent pricing, Flash Trade hopes to attract users from centralized platforms to DeFi.

What innovation does Flash Trade bring to the concept of perpetuals in DeFi?

Flash Trade aims to revitalize the concept of perpetuals in DeFi by providing up to 100x leverage on trades and guaranteeing profit and loss payoffs without the need for finding a counterparty. This is achieved through an asset-backed pool that takes on the counterparty risk and by offering a pool-to-peer oracle-based system for transparent and diversified asset lending.