Solana decentralized-lending giant Jupiter rolls out its new Lend version 2 (v2) product on Monday, allowing deposits and borrowed positions to simultaneously act as trading liquidity so the same dollar earns interest as a loan and a share of swap fees.
Jupiter Lend holds about $1.9 billion in deposits, according to DefiLlama data, and generated $1.6 million in fees over the past 30 days, or roughly 1% a year on the capital sitting there before any split with the protocol.
Active loans stand at $822.7 million and have fluctuated between $600 million and $900 million since September, Token Terminal data show. Deposits and loans have both slipped over the past month.
(Token Terminal)
The new version of Lend introduces two features, both optional.
Smart Collateral lets a deposit of $USDC, $USDT, $SOL or JupSOL be paired automatically into a correlated liquidity pool. That allows the assets to earn yield on any loans while gaining trading fees and, where applicable, staking rewards from one position. Smart Debt does the same for borrowed assets, so fees generated by a debt position offset the cost of the loan. Users who want ordinary lending can ignore both.
The extra yield exists only if traders actually swap through those pools, which means Jupiter not only runs Solana’s largest swap router, the software most wallets and apps use to find the best price across venues, but it also owns pools that need that flow to arrive.
The company told CoinDesk the router does not favor its own vaults and sends swaps wherever the price is best.
The risk of pairing assets falls unevenly, however. Jupiter said margin is valued using primary market oracles, or data providers, so a temporary price wobble on an exchange does not trigger anything, and a position liquidates as normal once its loan-to-value ratio passes the threshold.
A genuine depeg is different. On the debt side the borrower is protected — someone borrowing $100 split between $USDC and $USDT would see the pool rebalance into whichever asset held its value and still owe $100. On the collateral side there is no such protection, and a supplier carries the loss on both assets if either breaks.
That is why the design is confined to correlated pairs, stablecoins against each other and $SOL against its staked versions, rather than volatile assets.
“There’s been a wall between the two primary ways people earn APY onchain, lending and LPing,” said Kash Dhanda, Jupiter’s chief operating officer, referring to lending and supplying liquidity to exchanges.