What is Saber (SBR)? SBR crypto explained (Solana altcoins to know)

What is Saber (SBR)? SBR crypto explained (Solana altcoins to know)
4 min read
11 May 2022

Decentralized exchanges (DEXs) are taking the DeFi  community by storm. Currently, there are over two   hundred great projects for DeFi degens to enjoy.  And now, there’s another one to add to your list. The Saber Protocol is the Solana blockchain’s  first-ever automated market maker optimized for   trading pegged assets. It’s comparable with Curve  on the Ethereum blockchain, but being on Solana,   Saber transactions are much faster and scalable.

Ethereum’s blockchain is currently  capable of executing around 15   transactions per second. Even with  the Ethereum Merge on the horizon,   transaction speed on the Ethereum mainchain  isn’t predicted to speed up a whole lot. Compare that with Solana, where  speeds can reach around 65,000   transactions per second, you don’t need  to be a math whiz to see the difference! Saber’s mission is to connect the world’s  assets through a networked liquidity foundation,   and to fix a major inefficiency  in the blockchain world.

Currently, assets from one  blockchain cannot natively exist   on another blockchain. Therefore, Saber  created a DEX with an efficient solution   that allows users to trade in and out  of tokens on separate blockchains. The platform uses token bridging protocols and  wormholes to offer a wide range of assets from   different chains, including Ethereum,  Terra, Avalanche, Polygon and Celo. Saber’s main appeal is that its low fees and  interoperability allow instant and efficient   swaps between a host of USD-pegged stablecoins  from different chains, with minimal slippage. Low slippage is especially important for  exchanging large amounts of stable assets. 

A 3% slippage fee might sound small, but nobody  wants to swap 100,000 USDC for 97,000 UST! Meanwhile, like with most AMMs, liquidity  providers can earn yield from transaction fees,   LP incentives and more, thanks  to Saber’s farms and pools. For the DeFi degens out there, you’ll  be happy to know Saber has a token   called SBR. SBR is a governance  token with two main use cases. The first is to help fund the development  of the Saber Protocol and to also work with   the community on important parameters like  fee models. SBR token holders can take part   in community governance that helps decide  the fate of the protocol via the official   Saber Community Discord. Saber launched their  DAO platform at the beginning of this year.

Secondly, SBR is used for incentives between  Saber stakeholders (users, liquidity providers,   team members, and ecosystem partners). This  does mean however that SBR holders are heavily   incentivized to sell, and the effects of  this can be seen on the SBR price charts. So who are the brains behind Saber? Well, like many DEXs out there, Saber likes  to keep their public profile low-key. But   we do know that Saber was developed by  a small team of blockchain developers   called Saber Labs. Saber Labs  is officially registered in the   Philippines and headed bythe two  brothers, Dylan and Ian Macalinao.

The Saber protocol did experience a 52 million  dollar exploit on March 30th of this year, and are   still working on refunding those who lost their  deposits. The money was taken from the “CASH”   liquidity pool, and the attacker exploited a  vulnerability in the connected Cashio app. How the   team resolves and moves on from this issue will be  vital to their chances of success going forward. But Saber’s low transaction fees and  fast execution times could still help   usher in a raft of new, pro-Solana developers. 

The protocol can be easily integrated into any   other dApp on Solana’s ever-expanding blockchain,   and adequate liquidity has proven to be the  one key driver of every successful DeFi space. Could Saber emerge as a central  player in cross-chain DeFi?

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Kevin 715
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