Welcome to this post, where we are going to see the operation of Saber, a platform on the Solana network focused on the swap and farming of stablecoins, with a really amazing annual % that few platforms can be seen.
Saber although it may look like a DEFI Exchange like Raydium or uniswap on the etheruem network, you will not be able to buy and sell any cryptocurrency from the Solana network. Saber focuses on few cryptocurrencies and wrapped versions of them, mostly stablecoins such as DAI, USDC, USDT, PAI, UST, USDK, HUSD and on the other hand more volatile cryptocurrencies such as Bitcoin, Solana, Luna and Serum at the moment.
What is Saber?
Saber the leading cross-chain stablecoin exchange in Solana. Saber provides the liquidity foundation for stablecoins, which is a type of cryptocurrency whose value is pegged to another asset, such as the U.S. dollar or bitcoin. As Solana’s interchain liquidity backbone, Saber helps facilitate the transfer of assets between Solana and other blockchains. Users deposit cryptocurrencies into a Saber liquidity pool to earn a passive return on transaction fees, token-based incentives and, eventually, automated DeFi strategies.
Saber is the leading stablecoin and wrapped asset exchange in Solana. You may have seen cryptocurrencies like wbtc or weth, with the same value as bitcoin in the case of wbtc and the same value as ethereum in weth. These are wrapped assets.
This type of cryptocurrency is the form used to hold bitcoin on the ethereum network, for example. Bitcoin is in the bitcoin network, and therefore, if you are in the ethereum network and want to buy bitcoin, you will not be able to, since it is in another network. Because of this, assets with the same value were created in other networks. For example, wbtc on the ethereum network is the way for users of the etheruem network to buy bitcoin on that network. You may also have seen in the case of bitcoin, renBTC. You can these wrapped assets are found on every network, and allow you to use cryptocurrencies that are native to other networks, and be able to use them and buy on another network.
Also, it is important to know that the platforms behind the wrapped cryptocurrencies need liquidity to maintain the same value of for example bitcoin, and wbtc or renBTC. Therefore, it is always important to know which company or platform is behind each wrapped cryptocurrency to avoid losing the same value of the wrapped asset and the asset in its network.
Some other example, would be UST and Luna which are from Terra’s network, and in Saber you can find their wrapped versions to use in solana with wUST and wLUNA.
The first thing we find is the swap, very similar to the swap that raydium or other DEFI exchanges have. The first thing we must do is to connect our wallet, at the top right click on connect.
Click on continue, select your wallet, I use sollet extension, but if you don’t have a Solana wallet, the most recommended for beginners is Phantom. It will open our wallet and click on connect.
With the wallet connected, we can exchange any cryptocurrency for another within Saber and that is on its platform. At the top, indicate the cryptocurrency you have and below the one you want to get. Click on the token to see the list of cryptocurrencies that are available for exchange within the platform.
If you do not have any cryptocurrency to exchange, I recommend using binance to buy it and send it to your wallet, usually Solana as it is the cryptocurrency of the ecosystem and you will also need it to pay for the commissions.
Once you have selected the two cryptocurrency pairs, click on review, you will see here all the information about the swap, such as how much you will pay and how much you will receive from the other cryptocurrency. If you agree, click on confirm swap and confirm the transaction in your wallet. After a few minutes you will be able to see your exchanged cryptocurrency.
As it is not a DEFI Exchange of any cryptocurrency, you may want to use Saber for the great farming opportunities it has, and therefore, first I recommend you to look at farms that we will now see, which farm interests you the most and then use the swap to get that cryptocurrency.
Pools and Farms
Here we find the most interesting part of the platform. In pools, we find all the LP tokens that we can create to add in farms. Let’s suppose we have seen in farms the USDT-USDC pair, first we must click on deposit, indicate 50% of each asset, click on add liquidity and confirm in our wallet.
With the USDT-USDC LP token created, we will go to farms. Click on the pair in stake, scroll down and we will see the amount of that LP token we have to stake. Enter the amount, click on stake and confirm in your wallet, and you will have your LP tokens generating an annual %.
It is very important to mention that the rewards or annual % that you can see in farms, we will receive it in the native token of the platform, Saber. So you are not going to get more LP tokens for using the Saber farm. Therefore, I recommend if you want something more secure and stable, every so often sell your Saber for the same LP token or a stablecoin, to avoid that the annual % that appears reflected is lower if the price of the token drops. Although it can also go up and the % can be higher. For greater stability, the best option is to exchange them for a stablecoin or other tokens every few days or when you have an amount that you consider relevant accumulated in tokens. In addition, the solana network has such low commissions, that you can even withdraw your saber every day and spend almost nothing in commissions.
The interesting part of the platform is found in farms, as it has high annual percentages in stablecoins, which we hardly find in other platforms. Although always taking into account that we will not receive more LP tokens, but the native of the platform.
Even so, if every day or few days you exchange them for more LP tokens, you may not be affected by the price changes that Saber may have. There are several very interesting LP tokens currently, such as BTC-renBTC with 15% if you are looking for bitcoin farming with high annual %, UST-USDC with 52% per year, a percentage that you will not see in other platforms with stablecoins, wLUNA-renLUNA with 79% or USDK-USDC with 70%, two stablecoins also with a high annual %.
Keep in mind that these percentages will vary and may decrease over time as the platform becomes more popular with such high annual % stablecoins.
Is the platform secure?
The platform currently does not have any audits at the moment, but Solana has talked about this platform on his official twitter, so it is somewhat more secure as it is a platform known by the network itself, and that they may possibly have some collaboration.
Also, the platform has surpassed 2 billion or billions in American TVL, or total value locked. So there is 2 billion inside the platform. While this does not mean it is 100% safe, it adds some more security to know that there is so much investment within the platform and people who have put their trust in it.
Finally, you will see many stablecoins and cryptocurrencies on farms, my recommendation if you are looking for the safest, is to use pairs or LP tokens of cryptocurrencies that you know. Such as USDT and USDC, or UST and USDC. Although they probably keep the same value wrapped, sometimes if you do not know where it comes from for example apUSDC, it is better not to use that LP token, as it may no longer have the equivalent value of a dollar.
I hope it has helped you to get to know the new platform that is generating so much interest in Solana with its high annual %. Remember that if you don’t have an account with binance, you can create one just below.