How Does Save Work?

Algorithmic lending pools on Solana with over-collateralized borrowing across multiple asset markets

Core lending model follows Aave/Compound pattern adapted for Solana. Battle-tested through multiple market cycles including FTX collapse, though with significant stress events.

Kinked interest rate model with aggressive rate escalation above 80% utilization to incentivize repayment

Standard kinked curve model. During the June 2022 whale crisis, high utilization locked depositors out of withdrawals, demonstrating the model's limits under concentration risk.

Automated liquidation with fixed bonus for liquidators, plus account borrow limits introduced after the 2022 whale incident

Account borrow limits ($50M cap) were introduced post-crisis via SLND3 governance proposal. Limits reduce but do not eliminate concentration risk.

Pyth Network price feeds as primary oracle source with fallback mechanisms for Solana assets

Relies on Pyth for price data. Solana oracle ecosystem is less mature than Ethereum Chainlink, introducing oracle latency risk during volatile periods.

sUSD stablecoin launched as part of Save rebrand, backed by protocol-managed collateral strategies

Novel stablecoin launch by a lending protocol. sUSD adds significant smart contract surface area and collateral management risk. Untested in market stress conditions.

saveSOL liquid staking token providing SOL staking yield while maintaining DeFi composability

LST launch expands Save from pure lending into staking infrastructure. Introduces depeg risk and adds operational complexity to an already broad product suite.

SLND/SAVE token governance with on-chain proposal execution, historically controversial due to the June 2022 whale takeover vote

Governance integrity was severely tested in June 2022 when a proposal to seize a whale's funds passed with 90% of votes from a single wallet. Though reversed, it exposed fundamental governance concentration risks.

Dumpy.Fun — a memecoin shorting platform launched under the Save brand to attract users and generate fees

Ancillary product that diversifies revenue but adds reputational and smart contract risk. Memecoin shorting attracts high-risk users.

Despite $50M borrow limits introduced post-crisis, large accounts can still represent outsized share of pool deposits. A single whale liquidation can exhaust pool liquidity and create bad debt socialized across all depositors.

During mass liquidation events, utilization spikes above the kink point, causing extreme interest rate jumps. Borrowers face simultaneous liquidation and rate shock, while depositors are locked out by 100% utilization.

If sUSD is accepted as collateral in Save's lending pools and subsequently depegs, borrowers' collateral becomes insufficient. Bad debt propagates from the stablecoin product to the core lending business.

saveSOL's exchange rate depends on accurate oracle pricing. If Pyth's saveSOL price feed lags or is manipulated, borrowers using saveSOL as collateral may be incorrectly liquidated or may escape liquidation when they should not.

Governance must now manage risk parameters across lending, stablecoin, LST, and memecoin shorting products. Low SAVE FDV (~$15M) means governance power is cheap to acquire, while the surface area of governance decisions has expanded significantly.