Solana Fellowship Week 5: DeFi

March 13, 20223 min read

This week was focused on DeFi - basics of tokens, staking, and tokenomics.

DAO treasuries and getting into web3

This week we had a session by Shreyas, who's the co-founder of Llama. He talked about economic infrastructure for DAO treasuries, how to create a community, his journey in web3 and how important it is to have a good name for your product!

I connected a lot with his journey into web3 - he left his job wanting to get into a new industry, took part in hackathons to force himself to do something - something I am trying to do. Another interesting thing he talked about was how he decided what problems to work on - he used to help people with their DAOs and that's where he came across the problem people face managing treasuries. Since then, he has built a product, created a community around it and built up conviction in the problem statement.

Creating my own wallet and cryptocurrency

To see how Defi is implemented on Solana, we did 3 quests - creating a wallet, creating your own crypto using solana programs and creating your own crypto using javascript. All of these were focused on how to move money, SOL or any other SPL token.

The first 2 interacted with Solana through it's JSON RPC API but the last one was interesting - we had to create a Solana contract that proxies calls to the main SPL token program. This ability to easily call other programs makes the ecosystem so much more composable and rich.

Staking and Tokenomics

The exercise for this week was to add support for staking to the cryptocurrency created in one of the quests. This is what I ended up making.

Staking app UI

I had to think a lot about where to escrow the funds, how to make different escrow accounts for different tokens, and to connect it all in the UI providing a good user experience. It was a fun exercise, and I ended up learning a lot.

Doing this exercise also made me think about token economics (tokenomics for short). Different projects have different ways of token distribution, inflation, rewards, etc. I wanted to why different projects choose different mechanics and how they implement those.

I read the documentation of Solana economics. It is very interesting, well written set of articles. I would suggest everyone to go through them if they want to know why people stake and why it's good for the blockchain that people distribute their stake to different validators - which is a problem some projects are trying to solve.

I only had time to go through Solana tokenomics this week. But I do plan to continue exploring this field. The theory and math behind it is very interesting.

I have still not finalized my idea till now. That's mostly because of over-thinking and idea-paralysis. I'll focus on that for the next couple of days amd hopefully start working on it as well early next week.