Author: Scof, ChainCatcher
Editor: TB, ChainCatcher
What is Soul Protocol?
Soul Protocol is a cross-chain lending protocol aimed at bridging the gap between existing DeFi lending protocols and different public chains, helping users to flexibly lend assets across multiple chains and protocols. Users can perform lending operations across chains such as Ethereum, Arbitrum, Optimism, Avalanche, etc., using mainstream lending protocols like Aave, Compound, and Venus.
The characteristic of Soul lies in its reliance not on asset bridging or issuing synthetic assets, but on cross-chain communication protocols like LayerZero, allowing users to lend directly using native assets. This design reduces the risks and costs associated with transferring assets between different chains while enhancing asset liquidity and utilization efficiency.
Currently, Soul is still in the testing phase, open for users to conduct functional testing, provide feedback, and experience the platform.
How does Soul break the lending barriers?
The current DeFi lending market faces several common issues:
- Dispersed Lending Protocols
Most existing lending protocols only support a single public chain. If users want to lend between protocols on different chains, they often need to manually switch chains and bridge assets, which is cumbersome.
- High Costs and Slow Speeds for Cross-Chain Lending
Traditional cross-chain lending usually requires bridging assets, which not only adds extra operational steps but also incurs fees and risks related to asset security. The bridging process itself is also not efficient enough to meet arbitrage or flexible lending needs.
- Limited Lending Capabilities
Due to assets and lending capabilities being dispersed across different chains and protocols, users often cannot consolidate all their assets for lending, leading to reduced capital utilization efficiency.
Soul Protocol aims to address these issues through a unified cross-chain lending infrastructure:
- Users can deposit assets on any supported chain and lend on other chains or protocols without needing to bridge assets.
- It can automatically match interest rates across different protocols and chains, helping users find lower borrowing rates or higher deposit yields.
- During the lending process, users' assets and collateral capabilities are no longer confined to a single chain and protocol, thus improving overall capital efficiency.
- It supports cross-chain arbitrage, leverage, and other strategies without the need for cumbersome asset movements.
Throughout the process, users only need to operate through the Soul interface, while the underlying asset and data synchronization is achieved by cross-chain communication protocols like LayerZero. To enhance the system's robustness, Soul has also integrated Wormhole, Axelar, and Chainlink's CCIP as backup channels in case of communication interruptions.
Team Background and Current Progress
Soul Protocol is developed by Soul Labs, with founder Ahmed S having previously developed Hatom. The project has maintained a low profile over the past year, and is currently live on the testnet, supporting mainstream chains and lending protocols, and is open for testing and feedback.
The operation of Soul Protocol adopts a community participation and testing incentive model. During the testnet phase, users can earn points (Seeds) by using the dApp and completing specified tasks. These points will be redeemable for Soul's native token $SO upon the mainnet launch.
Currently, the project has not publicly disclosed any external financing information but is advancing testing and product optimization through community participation. Users can help identify issues, provide suggestions, and receive corresponding rewards by participating in the testing.
(This article is for reference only and does not constitute investment advice.)
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