Ratio Finance

Ratio. The ability to leverage one’s assets to their maximum potential without the interference of middlemen or custodians is one of the core principles of decentralized finance. Users are able to enjoy unrivaled customization and freedom in deciding how to best make their money work for them, without the red tape or restrictions that are found in traditional finance. We have seen an advent in development and growth over the last few years on Ethereum, allowing DeFi to see an explosion of liquidity, use cases, and volume. As this has occurred, scaling has become an issue on Ethereum as network fees and gas costs have skyrocketed as demand meets supply. Fortunately, new ecosystems are emerging on more efficient, faster, and less cost-intensive blockchains such as Solana. However, given that these ecosystems are young, we see massive growth opportunities for the development of DeFi protocols to meet user demand. This is where Ratio Finance comes in.

The ability to leverage one’s assets to their maximum potential without the interference of middlemen or custodians is one of the core principles of decentralized finance. Users are able to enjoy unrivaled customization and freedom in deciding how to best make their money work for them, without the red tape or restrictions that are found in traditional finance. We have seen an advent in development and growth over the last few years on Ethereum, allowing DeFi to see an explosion of liquidity, use cases, and volume. As this has occurred, scaling has become an issue on Ethereum as network fees and gas costs have skyrocketed as demand meets supply. Fortunately, new ecosystems are emerging on more efficient, faster, and less cost-intensive blockchains such as Solana. However, given that these ecosystems are young, we see massive growth opportunities for the development of DeFi protocols to meet user demand. This is where Ratio Finance comes in.

Ratio Finance allows investors in the Solana ecosystem to extend the capabilities of their liquidity provisioning efforts by minting stable coins (USDr) using their Raydium LP tokens as collateral. Our mission is to unlock the liquidity of Solana assets and minimize the downside risk for liquidity providers on Serum or Raydium.

Raydium is an automated market maker (AMM) built on the Solana blockchain which leverages the central order book of the Serum decentralized exchange (DEX) to enable lightning-fast trades, shared liquidity, and new features for earning yield. As with any AMM, liquidity comes from users offering their assets in liquidity pairs (LPs) in order to capture trading fees and earn yield on the underlying collateral. Providing liquidity is one of the foundational layers of decentralized finance, specifically when it comes to AMMs.

We recognized that in the Solana ecosystem the options for leveraging liquidity positions were fairly limited. Users can provide liquidity on Raydium to earn Raydium and other tokens, but that’s basically where it ended. We wanted to enable more use cases for these positions, while also creating a stablecoin that was backed with real collateral. We’ve seen the success of Maker DAO’s system in regards to DAI and chose to bring this mechanism to the Solana ecosystem.

You can learn more about the project on Medium