Reading DeFi Protocol Categories on Solana
Lending, AMMs, stablecoins, and perps — how to tell them apart before reading a whitepaper.
Solana DeFi announcements often name a protocol without stating its category. A “yield vault” might be lending, a structured product, or a points campaign. Category-first reading prevents mixing risk models.
Lending protocols
Users supply assets to pools; borrowers post collateral and pay interest. Liquidation engines sell collateral when ratios breach thresholds. Risk lives in oracle prices, collateral quality, and governance changes to parameters. Readers should identify which assets a pool accepts and how liquidations execute.
Automated market makers
AMMs price trades using pool ratios rather than order books. Liquidity providers earn fees and may face impermanent loss when asset prices diverge. Concentrated liquidity designs add another layer — tighter ranges mean higher capital efficiency but faster rebalancing needs.
Stablecoins
Some stablecoins hold bank deposits or treasuries; others use algorithmic mechanisms or hybrid models. Solana hosts multiple designs. Category labels on aggregators do not always reveal redemption rights — read issuer documentation for redemption, freeze, and upgrade keys.
Perpetuals and derivatives
Perp venues let traders open leveraged positions without an expiry date. Funding rates balance long and short interest. These products suit experienced readers who understand liquidation risk. They are frequently mislabeled in casual social posts as “passive yield.”
How we teach this
The DeFi Category Walkthrough session maps live dashboards to these categories with screen sharing. We do not simulate trades or connect wallets during the call. Readers leave with a table they can reuse when the next protocol launches.