What is SolStreet? is a non-custodial fund marketplace protocol built on Solana that allows third-party managers to launch non-custodial, decentralized asset pools and be connected directly to users on the Solana blockchain.
SolStreet's deep liquidity is provided by the Serum Decentralized Exchange (DEX), as well as Mango Markets DEX. More DEXs will be integrated in future.
The SolStreet protocol provides ancillary technical services allowing users to “deposit” and “withdraw” funds into a smart contract (“pool”). The pools are set up by third-party managers, which permit the “manager” to perform asset swap transactions and “manage” the pool, without ever being able to withdraw user assets. As such, the words “pool”, “manager”, “deposit”, and “withdrawal” are all used metaphorically, and because of their conceptual familiarity. However, while these metaphors are helpful in understanding the operation of SolStreet at a conceptual level, they do not apply in the same sense as in traditional asset management. For instance, SolStreet is entirely non-custodial (as explained later in this paper) and, therefore, there is technically no “deposit” or “withdrawal” - only the entering into an 'open and transparent' smart contract - with all captured on the blockchain.
When setting up a pool, the third-party manager will be the first participant in a pool, and be required to seed their pool. This aligns incentives with ordinary users. The more the manager puts into a pool, the more skin in the game they exhibit.
The protocol uses the Serum DEX for asset swaps. Serum has been developed as the liquidity engine for the Solana ecosystem and has 70+ asset pairs to trade, with a daily peak volume of over $500m in February 2022. Crucially, the protocol provides support for order books — typically more efficient at ensuring deep liquidity than automated market makers (AMMs); however, trades can also be executed on these order books using the swap approach more familiar to users of traditional AMM DEXs.
Mango Markets provides markets with deep liquidity, spot margin, leveraged derivatives, and risk management tools for traders - all whilst earning interest on collateral.