$BanxSOL - the Banx protocol LST
GM Sanctum community, meet $BanxSOL, the first LST designed to earn yield from idle $SOL in orderbooks - the Banx.gg orderbooks.
Banx is a P2P perpetual lending and borrowing protocol - a place to borrow $SOL or $USDC against your tokens and NFTs, and earn yield by lending your $SOL or $USDC.
We are an OG Solana team, been around since 2021 building revenue generating protocols - nearly 4M in revenue distributed to our holders so far! (more about our story here: x.com)
Why is $BanxSOL so dope?
Because it allows lenders to earn yield on their $SOL when idle in the Banx orderbooks. Let that sink in for a minute…
Until yesterday, Solana manlets faced a tough choice: settle for the low and safe yield of staking or lending pools, or place that $SOL in orderbooks for potentially higher returns.
Potentially, because idle $SOL in the orderbooks yields zero.
How long will my order sit in the books before it gets taken?
How long before I start feeling the pain of that $SOL yielding nothing?
$BanxSOL fixes this.
Thanks to the Banx X Sanctum LST integration, $SOL in the Banx orderbooks always yields as if it where staked.
When your order gets taken, it’ll switch gears to the higher APR you get for P2P lending. And when the loan gets repaid, that $SOL goes back into LST yield mode.
TL;DR: once your $SOL is inside Banx, it never stops yielding.
How can you make $BanxSOL work for you?
BanxSOL is 1:1 pegged, unlike 99.9% of the LSTs you already know and love.
This means buying & holding $BanxSOL alone does nothing.
The magic of $BanxSOL unlocks when you place a $SOL lending order on Banx: that $SOL is silently swapped to $BanxSOL and starts yielding.
When your offers get taken, it’ll start earning the even higher active yield from borrowers.
In short, banxSOL provides the minimum yield for any deposit on Banx.gg, but Lenders can decide the higher yield to earn when their offers get taken, according to their personal risk/reward preference.
Under the hood
A key challenge of this integration was to preserve the instant UX our end users are used to, hiding the complexity - specifically, the latency - introduced by the $SOL / $BanxSOL swaps.
We also needed to make sure end users and the order book always worked with native $SOL only - $BanxSOL is 1:1 pegged remember? We didn’t want to mislead users into simply holding it.
Two main components work together to achieve this:
The 20% $SOL reserve within the Sanctum liquid staking contract ensures native $SOL is always ready, without swapping delay, when a borrower requests it.
The Pool Balancer holds that reserve stable at 20%, keeping the optimal amount of $SOL always available.
Crucially, the Pool Balancer lives inside the Banx contract, to minimize latency.
- When a Lender deposits, the Balancer decides how much $SOL to keep in reserve and how much to swap to BanxSOL for yield.
- Likewise, after a borrower withdraws, the Balancer will swap BanxSOL back to $SOL to correct the ratio.