- The DeFi Alliance is an accelerator that has backed up the first project based on Solana known as Mercurial Finance.
- The goal of this project is to build a protocol for stablecoin trading on the Solana blockchain
- DeFi Alliance has invested $100,000 in Mercurial
In fact, they went so far as to invest $100,000 in Mercurial and helped in bootstrapping the liquidity of the protocol. This news came directly from the co-founder of Mercurial, Ming Ng.
When it comes to discussing Mercurial, it was founded earlier this year with the mission of building a protocol for stablecoin trading on the Solana blockchain. You can compare it to something like Curve Finance on the Ethereum blockchain if you want to have a better perspective as to what it intends to achieve.
That being the case, Ming Ng claims that Mercurial’s innovation over the competition, in regards to its goal of allowing stablecoin trading on the Solana Blockchain, is the dynamic fees as well as the dynamic allocation and low slippage it brings to the table.
If you’re uninitiated, slippage refers to the difference between the expected price of a trade, alongside the price at which the trade is actually executed.
Regarding the dynamic fees, Mercurial’s trading fees are expected to adjust according to the market volatility. Throughout high volatility, fees would increase as a way to compensate the liquidity providers, and this is the case the other way around as well.
Furthermore, Ming Ng mentioned that traditional market makers charge more spread in volatile markets due to the fact that there is more demand, alongside risk, and lower spread in less volatile markets with the intention of attracting more volume.
Throughout the dynamic allocation feature, mercurial intends to dynamically allocate the capital versus sitting in and not being used. Through Solana, Ming Ng claims, Mercurial will be able to perform complex transactions, such as to lend all the capital out, and when needed, withdraw it back for the swap in the same transaction.
Discussing Mercurial’s backers, these also include the Solana Ecosystem Fund, Huobi, OKEx, Almeda Research, CoinGecko, Blockfolio, Nansen, and more. In fact, if you are interested in the numbers, the project raised a total of $10.3 million in funding through a Simple Agreement for Future Tokens (SAFT) sale.
Imran Khan, who is the lead at DeFi Alliance as well as a general partner at Volt Capital had this to say about the investment: “In order for DeFi to thrive on Solana, deep stablecoin liquidity must be available. What Mercurial solves is the liquidity issue + opportunity cost by intelligently providing liquidity on pairs while yield farming + minting stablecoins.”
Furthermore, earlier this month, DeFi Alliance added Solana to its ecosystem partnership program, where the co-founder of Solana, Anatoly Yakovenko is one of the mentors within the organization.
Furthermore, DeFi Alliance is also working with over 20 projects and has invested millions within blockchain projects.