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Solana Summer: Step.Finance & STEP explained

Solana Summer: Step.Finance & STEP explained

Explainers DeFi

03 Jun 2021

Since the explosive rise of DeFi over the past year, long-existing scalability issues with Ethereum, the primary blockchain protocol for dApps, have become too much for many users. This has opened up the market for alternatives that offer a better experience, lowering the cost and increasing the speed of transactions.

There are many contenders competing to be next primary DeFi blockchain including Binance Smart Chain, Cardano, and Polkadot. But perhaps, as some may believe, one of the most promising candidates is Solana.

Solana solves many traditional issues that earlier blockchain technology had to grapple with, using a new structure for verifying transactions and a more efficient consensus algorithm. This gives Solana the technical advantage to offer high TPS at low fees and latency in a decentralized manner.

Solana already has quite a few projects running on its blockchain including Serum, Chainlink, Akash, Raydium, Bonfida, Orca, Synthetify, Solaris, Aleph, Cryptoplease, and about 100+ more. There has never been a faster and cheaper way to stake, borrow, lend and swap tokens until the land has been farmed dry. But how do you keep track and manage all your activities across so many apps?

This used to be the realm of spreadsheets, but now you can oversee all your Solana-based activities in a single screen using Step.Finance.

What is Step.Finance

Step.Finance is the front page of Solana. It is the tab you keep open all day to visualize, analyze, execute and aggregate transactions across all Solana contracts in single dashboard. Users can interact with their favorite protocols from within the Step dashboard which could include farming, pools, swaps and automated strategies.

To get started, you need to connect a Solana wallet like Solong, Bonfida or Sollet and provide authorization for Step to query your accounts to get the information necessary to display and execute transactions. Once connected, you can use Step for the following functions:

  • Wallet balances: View of all tokens displayed over time in a selection of base currencies, with the option to consolidate multiple wallet addresses.
  • LP tokens: See all LP tokens you hold in Solana AMMs and performance of the pools including fee revenue, yield, APY and impermanent loss.
  • Yield farming and staking: Overview of all yield farming opportunities on Solana with the ability to enter, harvest, and exit using Step.
  • Trading positions: All current positions, open orders and unsettled balances across DEXs built on Solana.
  • Trade: You can also swap tokens directly using Step accessing various liquidity pools and AMM programs.

STEP token

In April 2021, the STEP token was launched successfully enabling the protocol to lock $101 million in liquidity. In an interview, co-founder George Harrap said “We think part of the success of the sale has been the potential Solana has for the DeFi world. Besides, people realize there are quality teams building real value-adding projects on Solana, like Step Finance.”

The team has developed strong fundamental value accrual structures for the STEP token. The most basic method is simply Step charging a fee on transactions and then forwarding 80% of the fee revenue to stakers of the STEP token – the remaining 20% goes to the treasury. Step also commits to buybacks of STEP tokens from revenue generated by transaction fees, which are then distributed to stakers.

Supply emissions reduce gradually over time at a set rate of 4% on a weekly basis, mirroring similar tokenomics designed by other yield aggregators on different blockchains such as Harvest, Pickle, and Yearn. Provided there is a steady or increasing demand, a falling emission rate creates an inflection point where buyback volume is greater than new emissions creating a net positive buy pressure on the STEP token.

Lastly, to reduce potential sell pressures, Step intends to implement various lockup LP pools where tokens will be locked in for a specified amount of time, providing a higher rate of staking revenue compared with staking pools that allow instant withdrawals.

Forecasts on all channels agree on a long Solana Summer and with the aim of being the primary Solana dashboard, Step Finance is there to help keep your cool as you tend to your farms.

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