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The Liquidity layer serves as the foundation of Jupiter Lend upon which various protocols are built. It acts as a singular layer that consolidates liquidity across protocols built on Jupiter Lend (Earn and Borrow), eliminating the need for each protocol to independently attract liquidity. This layer enables seamless interaction between protocols while ensuring optimal capital efficiency, security, and user experience.

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Key features

  1. Capital efficiency: the Liquidity layer minimizes capital fragmentation and maximizes liquidity utilisation across protocols. Earn depositors and Borrow vaults share the same underlying pool, driving greater value for users.
  2. Automated ceilings: dynamically adjusting debt and collateral ceilings prevent sudden whale movements and secure the protocol against potential exploits. These limits adjust in real time based on utilisation rates, minimizing potential losses.
  3. Advanced liquidation: Jupiter Lend uses advanced liquidation mechanisms, with penalties as low as 0.1%. Slot-based liquidation enables gas-efficient liquidation of large numbers of positions. Gas costs are low enough that liquidations can be economically viable even for smaller actors.
  4. Highest LTVs: advances in liquidations and utilisation enable Jupiter Lend to offer among the highest LTVs in the market, up to 95% LTV on assets like SOL and ETH.

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How protocols use Liquidity

  • Earn (Lending): supplies user deposits into the Liquidity layer. Users receive jlTokens (shares) that accrue interest and rewards. No borrow positions; supply only.
  • Borrow (Vaults): supplies collateral and borrows debt from the Liquidity layer. Each vault has a supply token (collateral) and a borrow token. Rebalancers manage supply/borrow to match vault demand.
Both protocols CPI into the same Liquidity program. All tokens are held in Liquidity; Earn and Borrow never hold tokens directly.