Soluna

Composable Anchor assets for Solana DeFi

Inspiration

We were driven by a universal need for access to high and stable yields. Anchor on the Terra blockchain is money market that is designed to do just that for Terra based assets such as UST. Uniquely, Soluna is protocol that leverages Wormhole to be a cross-chain gateway to Anchor, while also minting highly composable assets with Solana's DeFi ecosystem.

What it does

Soluna allows for the creation of composable interest-bearing Anchor assets for Solana DeFi. Starting on the Terra blockchain, users can deposit UST and receive our stablecoin, solUST. Our contract for this step is a variation of the Pylon Protocol, which allows for deposits into Anchor while splitting off the interest earned from the principle. This gives a wrapped UST that represents UST deposited in Anchor yet still trades 1:1 with UST and any other dollar pegged asset, making it perfect to trade in on a specialized exchange like Saber.

Our user interface allows for seamless interactions with this contract integrated with a specialized interface for the wormhole token bridge. This allows users to go from UST on Terra to solUST on Solana as quickly and efficiently as possible.

The yield generated from Anchor is calculated by the value of the Anchor UST held by the contract - amount of solUST issued. We name a beneficiary contract that is able to permissionlessly collect these yields once per day and bridge them to Solana again using Wormhole.

The yields are sent to a distribution contract that allows for users to stake veSoluna, a staked version of the protocol's governance token. This model is the same model that Saber uses to distribute the collected swap fee rewards to veSaber stakers. We use Tribeca gauges to direct inflation of the Soluna token much in the same way that Saber does.

How we built it

We took advantage of existing infrastructure to build as fast as possible. This also made sure we were closely integrated with other projects. We started with contract development, receiving help from the Pylon, Saber, and Wormhole teams when we needed it. Then we started UI development and we were able to leverage our existing network for feedback.

Challenges we ran into

Our biggest challenge was getting familiar with the Terra and Solana's execution model and development environment, as most of our experience has been developing on the Ethereum Virtual Machine. It was also difficult to design the interface to be as seamless as possible while also accurately portraying what actions are occurring to the users. There aren't many other projects that we could look to too, so lots of iterations and late nights were needed.

Accomplishments that we're proud of

We are really proud to have built a working prototype really quickly and look forward to continuing this trend by deploying to mainnet as fast as possible. It's been great to work closely with the talented and passionate teams at Saber, Pylon, and Wormhole. We look foward to mobilizing liquidity between Solana and Terra.

What we learned

We learned a lot about what it takes to build an end to end software stack on Solana and Terra. From picking up the Anchor framework, to diving deep into the Solana account model, to learning about Wormhole's transaction 3-types, and deploying contracts on CosmWasm, we have expanded our skillset beyond EVM.

What's next for Soluna

Our ambition is to grow Soluna TVL to $1B and make it the defacto stablecoin due to its decentralized and unique yield bearing properties. We want all Solana users to take advantage of the decentralization of UST and the stable interest on Anchor. Beyond that, work closely with the Terra ecosystem and the Wormhole team to issue more Terra stablecoins and Anchor supported assets as they come out.