Pythiad: Jet Protocol — The Second Leg of the Journey
Jet Protocol Takes Flight for the Second Leg of the Journey Towards Better Decentralized Borrow-Lending
Jet Protocol is one of the oldest Solana applications. “Built for speed, power, and scalability”, Jet is a borrow lending protocol offering first class, market-based lending products and proudly #PoweredByPyth. They are also vocal promoters and champions of some the most beloved principles in the space: open source, governance, and decentralization.
It’s been a wild ride since DeFi summer. Jet is ready to take flight for the second leg of their journey, with Jet Bonds, their V2, new Compositions with your favorite DeFi apps, and more. The final destination? A new standard for debt capital market efficiency and a platform where the community charts the course.
We’re pleased to be joined by James Moreau from the Jet team this week for a tour through their founding story, their thoughts on the space, and Jet’s upcoming roadmap.
1. Let’s start off easy. What is Jet Protocol?
At its core, Jet Protocol is a borrowing and lending protocol!
The earliest iteration of Jet was as a cross margin pooled model, however, the core development team quickly realized that this specific model of DeFi was going to be commoditized quickly. We decided to pivot to more traditional, familiar, and efficient modes of creating debt capital markets.
Jet currently uses Pyth as the exclusive data provider oracle for maximizing the functionality and flexibility of Jet Protocol, especially with a mind towards optimizing the way the liquidator sells underwater collateral on the open market fairly. Pyth’s functionality enables Jet Protocol to deliver optimal capital efficiency for users.
2. What’s the founding story behind the Jet team? Why did you choose to build a borrow-lending protocol?
Wil Barnes and I (James Moreau) started development of Jet Protocol after knowing each other for several years since working together in the 2017 bull market at ConsenSys.
After collaborating on several projects within ConsenSys such as: Metamask, Infura, Kauri and ConsenSys Diligence, we went off to work on different parts of the blockchain space — Wil in DeFi at MakerDAO and myself in staking and governance at Lunie.
During DeFi Summer, Wil was hacking for fun at the first Serum hackathon building a structured products POC. Wil and I started talking about cool things they could build on Solana at the time, with a common concern surfacing, “if only there was more liquidity”. This concern led to the idea that building a robust and highly decentralized, borrowing and lending protocol on Solana would be the best way to get on-chain liquidity to support more sophisticated DeFi ideas on the chain.
This foundational need is what got us fired up!
3. Jet has been in the ecosystem since the beginning. You’ve seen a lot of Solana’s history! What has surprised you the most? What are your thoughts on where Solana is headed now?
Frankly, I’m personally surprised at how fast and easy the general public was willing to throw the baby out with the bathwater in terms of Solana’s technical promise based on some temporary issues regarding chain liveness and performance.
Literally every blockchain that has withstood the test of time since I’ve been in the space has had similar if not worse issues at one point or another — it’s all about recency bias. Whether you call this a bear market or not, it’s definitely building season and Jet and a bunch of our peers are taking full advantage of it to innovate without as many distractions related to “number go up.”
4. You’re bringing people with TradFi background into DeFi. How has your past experience helped? What do you see that maybe some blockchain natives miss?
Fixed-rate, fixed term borrowing and lending doesn’t bring the most sexy unsubsidized APY’s, however everyone notices the fixed rate/fixed income archetype throughout the TradFi world–and it’s something that is ubiquitous in most people’s financial lives.
Seeing cool yield farming ideas come to market in the last cycle was fun while it lasted, but their utility is limited for few things besides ponzinomics.
While the Jet can innovate and scale the experience of accessibility and transparency of what are bond equivalents on the blockchain, it has to be looked at as something worth getting right before the DeFi space launches headlong into more creative financial products that would be a mystery to the average consumer.
5. Composability is an ongoing topic of DeFi! Who can compose with Jet? What are you most excited for in terms of compositions?
Anyone and everyone who’s building in DeFi on Solana should check out the new codebase.
The more adaptors that are built for Jet’s margining system, the better it performs! Other protocols looking to benefit users by trading through Jet should consider proposing or building an adapter themselves. The number of interesting and innovative yield products that can be built via Jet Bond’s extensible and composable code is very exciting!
Another type of composability is Jet DAO’s governance process. That process includes evaluating and adding new asset types to the platform. Pyth provides data feeds for this, and is open and decentralized. To learn more about the onboarding process for new assets, go here and to follow along on governance discussions on the forum. You do not need to work for or be an official representative of the project behind the asset to propose it for listing on Jet Protocol! Anyone can fill out an application for an asset to be onboarded that adds value to the protocol and ecosystem.
6. Jet V2 Beta is coming! What will be new with V2?
Jet V2 Beta is a total overhaul of the backend that supports the MVP cross-margin protocol using Jet’s next generation margining system.
Jet V2 Beta is the first iteration of a 3-stage roll out planned for the remainder of 2022. The cross margin system is being supported by the margin backend now, with the margin trading functionality of Serum from Jet coming next in late Summer. This margin trading system is the critical infrastructure underpinning what will be Jet’s flagship creation of a fixed rate and fixed term market — Jet Bonds.
7. How else can the Jet community get involved? What should they look forward to next?
Testing the newest releases of Jet V2 Beta, and subsequent releases on a go-forward basis, are the best ways you can directly affect the direction of the protocol. Make sure to participate in the Jet Discord and offer feedback, offer bug reports and review them, and of course the Jet forum.
8. Any final words for our readers and the ecosystem?
This is really the beginning of where the key innovations that Jet Protocol brings to the table meet the governance process developed with lasting decentralized operations in mind. There will surely be use cases that crop up out of the community of users with varying backgrounds as progress is made towards releasing the first scalable blockchain-based bonds market. Don’t be shy about sharing your ideas!