What Is Solend?

Solend is a decentralized lending and borrowing protocol built on Solana. It allows users to deposit tokens as collateral to earn interest, and borrow other tokens against that collateral without intermediaries. Solend operates through smart contracts that enforce collateral requirements and liquidations automatically.

How Solend Works

Users deposit supported tokens into Solend’s lending pools. These deposits earn interest paid by borrowers. Borrowers must post collateral worth more than the amount they borrow (overcollateralized loans). Each token has a loan-to-value (LTV) ratio that determines how much can be borrowed against it. If the collateral value falls below the liquidation threshold (usually due to price decline), Solend’s liquidators automatically repay part of the loan and seize the collateral at a discount, restoring the pool’s health.

Use Cases for Solend

The primary use case is leveraging long positions: a user deposits SOL, borrows USDC, and buys more SOL, amplifying exposure without selling. Another common use is accessing liquidity without triggering a taxable sale: borrowing against a token position provides cash-like access to value. Short selling is also possible by borrowing a token and selling it, then repurchasing later at a lower price to repay the loan. All three strategies carry liquidation risk if collateral values move against the position.

SLND Token and Governance

SLND is Solend’s governance token. Holders can vote on protocol parameters including supported assets, LTV ratios, borrow rates, and fee structures. Governance proposals are submitted on-chain, and voting weight is proportional to SLND held or delegated. Some of the protocol’s fee revenue is directed to the treasury, which is governed by SLND holders. SLND governance falls within the broader category of DeFi protocol governance, where token holders collectively manage risk parameters rather than a central authority.

FAQ