Review Saber Protocol($SBR) – Everything you need to know about Saber Protocol
Saber is the leading cross-chain stable coin exchange on Solana, providing the liquidity foundation for stablecoins, or a cryptocurrency whose value is pegged to another asset. Market makers deposit crypto into a Saber liquidity pool to earn passive yield from transaction fees, token-based incentives, and eventually automated DeFi strategies.
What is Saber Protocol
Saber is a decentralized exchange (DeX) focused on stablecoin swapping and staking. Built on the Solana platform, Saber currently offers swapping opportunities for about 30 cryptocurrencies.
Users can also stake funds in liquidity pools. Saber currently operates 25 liquidity pools, each of which represents a swap pair (e.g. USDT-USDC), and liquidity providers can earn yield based on each swap transaction on the platform involving the pair.
Saber’s key advantage is low transaction fees, low slippage rates, and fast execution times. These advantages are achieved thanks to the app’s native blockchain, Solana, which boasts a much greater throughput and lower transaction costs compared to Ethereum.
What is the unique selling point?
Saber’s key functionality is enabled via the Automated Market Maker (AMM) model. AMM-based exchanges do not have to rely on executing each trade by connecting two traders willing to transact.
Instead, a large number of liquidity pool providers add funds to the respective pool, e.g. USDT-USDC. The liquidity providers are incentivized by a proportion of the transaction fees earned by the protocol transferred to them. When you want to swap your USDT for USDC, you do not have to wait around for another trader willing to transact with you. Instead, you simply execute your transaction against the pool, where lack of required coins is rarely a problem, at least at larger and properly established protocols.
Saber has already distinguished itself in the market as a DEX with very affordable fees. Any coin pair swap presents less than 1% in fees.
Any two coins pegged to the same asset, whether fiat currency or some major crypto such as Bitcoin, can be swapped. However, swapping between coins pegged to different assets, i.e. the coins whose exchange rate is not necessarily stable, is not feasible.
For example, you can swap USDT for USDC, but not for pBTC, ibBTC or some other Bitcoin-pegged token available on Saber. That is because USDT to a Bitcoin-pegged token rate may fluctuate freely and well beyond the tiny changes between the rate of USDT to another USD-pegged coin.
In short, at least for now, Saber prefers to concentrate on the stablecoin swap niche, without going into the hotly-contested general coin exchange market.
Liquidity Pool Staking
In addition to coin swaps, Saber also offers LP staking. Liquidity providers can earn yield by contributing their funds to a pool of their choice on the platform. There are a total of 25 pools currently available.
Annual percentage yields from staking on Saber are high, even by the DeFi standards. However, these rates may fluctuate wildly over a short period of time, which is quite usual for yields on crypto trading platforms. As of the time of writing, yields as high as 64% are offered. One of the largest and most actively used pools, USDT-USDC, offers a yield of 27%.
However, these high yields may sharply change overnight, especially on newer platforms like Saber. Typically, as more participants join a liquidity pool, annual yields will decrease.
Since Saber has been in operation for less than four months, longer-term estimates of annual yields can only be made in the future when the platform matures.
The yields from staking are paid out in Saber platform’s token SBR. SBR is a fungible token based on Solana’s SPL token standard, which is the equivalent of the ERC20 token standard used on Ethereum.
SBR, in addition to being Saber’s native transaction token, also serves as the protocol’s governance token. SBR gives its holders the right to vote on important changes to the dApp and future direction.
To use Saber, you will need to connect a supported wallet. At the moment, the supported wallets include:
- Token Name: Saber Protocol
- Ticker: SBR
- Blockchain: Solana Chain
- Token Standard: SPL
- Contract: Saber2gLauYim4Mvftnrasomsv6NvAuncvMEZwcLpD1
- Total Supply: 10,000,000,000 $SBR
- Circulating Supply: TBA
Token Release Schedule
A significant portion of the mining reserve (100,000,000.00 SBR or 1% of total token supply) will be distributed during the first two weeks of the liquidity mining program. This ensures that from the beginning, voting power will be given to actual users of the protocol and help align liquidity provision incentives.
The target launch date for the liquidity mining program is July 15, 2021 at 10:00 PM UTC.
Token Use Case
The Saber Protocol Token ($SBR), a governance token that has two primary use cases:
- Steward the development of the Saber Protocol & collaborate with the community on key parameters like fee models
- Align incentives between Saber stakeholders (users, liquidity providers, ecosystem partners, team)
Market and Community
Saber did not specify the project team. However, the information I found on Twitter, Saber has two co-founders:
- Dylan Macalinao (@DylanMacalinao).
- Ian Macalinao (@Simplyianm): Founder of the Ubeswap project – DEX on Celo.
Partners & Investors
Saber is an AMM DEX platform dedicated to stablecoins of the Solana ecosystem. If DEXs often use the Order-book mechanism, Saber will use the AMM mechanism, which is a mechanism where Liquidity Providers will provide their liquidity into the Pool, allowing Traders to Swap asset.
Find more information about: Saber Protocol
If you have any questions, comments, suggestions, or ideas about the project, please email [email protected].
DISCLAIMER: The Information on this website is provided as general market commentary, and does not constitute investment advice. We encourage you to do your own research before investing.