Written by: Scof, ChainCatcher
What is Soul Protocol?
Soul Protocol is a cross-chain lending protocol aimed at bridging the gap between existing DeFi lending protocols and different public chains, helping users to lend assets more flexibly across multiple chains and protocols. Users can perform lending operations across chains using mainstream lending protocols like Aave, Compound, Venus, etc., on multiple chains such as Ethereum, Arbitrum, Optimism, and Avalanche.
The feature of Soul is that it does not rely on asset bridging or issuing synthetic assets, but allows users to lend directly using native assets through cross-chain communication protocols like LayerZero. This design reduces the risks and costs for users when transferring assets between different chains, while enhancing asset liquidity and utilization efficiency.
Currently, Soul is still in the testing phase, open for users to conduct functional testing, feedback, and experience.
How does Soul break the lending barriers?
There are several common issues in the current DeFi lending market:
Lending protocols are fragmented.
Most existing lending protocols only support a single public chain. If users want to lend between protocols on different chains, they often need to manually switch chains and bridge assets, which is cumbersome.
Cross-chain lending is costly and slow.
Traditional cross-chain lending usually requires bridging assets, which not only adds extra operational steps but also incurs costs and risks regarding asset security. The bridging process itself is also not efficient enough to meet arbitrage or flexible lending needs.
Lending capacity is limited.
Due to assets and lending capabilities being dispersed across different chains and protocols, users often cannot consolidate all their assets for lending, leading to reduced capital utilization efficiency.
Soul Protocol aims to address the above issues through a unified cross-chain lending infrastructure:
Users can deposit assets on any supported chain and lend on other chains or protocols without the need to bridge assets.
It can automatically match interest rates across different protocols and chains, helping users find lower borrowing rates or higher deposit yields.
During the lending process, users' assets and collateral capabilities are no longer limited to a single chain and protocol, thus improving overall capital efficiency.
Supports cross-chain arbitrage, leverage, and other strategies without cumbersome asset movements.
During the entire process, users only need to operate on the Soul interface, with the underlying LayerZero and other cross-chain communication protocols achieving asset and data synchronization. To enhance the robustness of the system, Soul has also integrated Wormhole, Axelar, and Chainlink's CCIP as backup channels in case of communication interruptions.
Team background and current progress
Soul Protocol is developed by Soul Labs, and the team's founder Ahmed S previously developed Hatom. The project has maintained a low profile over the past year, and at this stage, it is live on the testnet, supporting mainstream chains and lending protocols, and is open for testing and feedback.
The operation of Soul Protocol adopts a community participation and testing incentive model. During the testnet phase, users can earn points (Seeds) by using the dApp and completing designated tasks. These points will be exchanged for Soul's native token $SO upon the mainnet launch.
Currently, the project has not publicly disclosed external financing information but is advancing testing and product optimization through community participation. Users can participate in testing, help identify issues, make suggestions, and receive corresponding rewards.
