Oxygen is a liquidity protocol built on Solana. Just as other liquidity protocols on Ethereum such as Aave it enables investors to obtain a yield on their tokens. Furthermore, investors can use Oxygen to create leverage on their investments or to take short positions.
Oxygen is inspired by the primer brokerage that is available on traditional financial markets. It is a solution applied by Wall Street to connect various market participants and enable them to engage in an efficient market and to take leveraged positions. Oxygen aims to replicate this user experience in a decentralized environment.
Oxygen claims to be fully decentralized and non-custodial. Oxygen is taking advantage of the existing Solana ecosystem and in particular of the Project Serum decentralized exchange which is also built on Solana. Despite being built on Solanda Project Serum is designed to be interoperable with Ethereum. In the current Alpha-Version Oxygen uses the market data from the Serum exchange in order to calculate liquidation ratios and to create the liquidity markets. On the other hand Aave is using the ChainLink oracle for discovering price feeds. This allows Aave to obtain price data form a range of centralized and decentralized exchanges and makes the protocol less vulnerable to the price changes and market liquidity of one single exchange.
The protocol is developed by a team based in Switzerland. The project is currently in Alpha mode and has not yet been audited. However, a review has taken place by the Alameda Research and Solana teams. Additionally a significant bounty program is planned for discovering security vulnerabilities.
Additionally to the features of other liquidity protocols Oxygen counts with the following functionalities:
- Cross-Collateralization: you are able to use all the assets you hold as collateral
- Multiple Usage of the Same Collateral: you are able to borrow against your collateral while you use it to obtain yield
- Extremely Low Transaction Fees: since Oxygen is using the Solana blockchain the transaction fees on the blockchain will be as low as 0.00001 USD per transaction
In February 2021 a venture capital round led by Alameda Research invested 40 million USD in Oxygen. Alameda Research is led by Sam Bankman-Fried who is the founder of the FTX exchange. Among the other investors were Multicoin Capital, which is heavily engaged in the development of the Solana ecosystem, and Genesis Capital.
Oxygen Wallet
In addition to the liquidity protocol Oxygen is developing the Oxygen wallet which supports assets on Ethereum and Solana. The Oxygen wallet is already available on Apple’s App store and is expected to arrive soon to the Google Play Store.
Through the Oxygen Wallet users can directly interact with the Oxygen DeFi protocol. Furthermore, the Oxygen Wallet comes with a built-in functionality to exchange assets that live on Solana directly in the wallet. Additionally it will be possible to exchange assets between the Ethereum and the Solana blockchain.
The Oxygen Wallet makes it possible to recreate an Ethereum and Solana wallet with the same seed phrase.
Oxygen Token
The Oxygen token is called OXY and is issued with a total supply of 10 bn OXY tokens. 2% of the token supply will be offered through an Initial Exchange Offering (IEO). 10% of the token supply will be sold in a private sale to investors who agree to undergo a KYC-process.
People who wish to invest in OXY can acquire the OXY tokens in a private presale through contacting [email protected] and stating the amount of tokens they wish to acquire.
A 15% protocol fee is charged from the yield earned of the asset and from the market clearing rate for borrowing the asset. This protocol fee is used for buying and burning OXY tokens. The token supply of OXY is therefore expected to turn deflationary. Additionally OXY holders will be able to participate in the governance of the Oxygen protocol.
Summary
The use case and demand for liquidity protocols has proven to be very strong. Oxygen is filling this need for the emerging Solana blockchain. It is without doubt one of the hottest protocols built on Solana. Additionally it features integrations to Ethereum connecting it to the by far largest DeFi ecosystem available.