Cross-chain lending infrastructure Soul Protocol | CryptoSeed

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What is Soul Protocol?

Soul Protocol is a cross-chain lending protocol that aims to bridge the gap between existing DeFi lending protocols and different public chains to help users borrow and lend assets more flexibly across multiple chains and protocols. Users can borrow and lend across multiple chains such as Ethereum, Arbitrum, Optimism, Avalanche, etc. using mainstream lending protocols such as Aave, Compound and Venus.

Soul is unique in that it does not rely on asset bridging or issuance of synthetic assets, but allows users to borrow and lend directly using native assets through cross-chain communication protocols such as LayerZero. This design reduces the risk and cost of transferring assets between different chains, while increasing the liquidity and efficiency of assets.

Currently, Soul is still in beta, open to users for feature testing, feedback and experience.
How does Soul break down the lending barrier?

There are several common problems in the current DeFi lending market:

Fragmented Lending Agreements

Most of the existing lending protocols only support a single public chain, so if users want to borrow between protocols on different chains, they often need to manually switch chains and bridge assets, which is a cumbersome process.

High cost and slow speed of cross-chain lending

Traditional cross-chain lending usually requires bridging assets, which not only adds extra operational steps, but also brings risks in terms of costs and asset security. The bridging process itself is also not efficient enough to meet arbitrage or flexible lending needs.

Lending capacity constraints

As assets and lending capacity are dispersed across different chains and protocols, users are often unable to consolidate all of their assets for lending, resulting in less efficient utilization of funds.

Soul Protocol attempts to solve the above problems through a unified cross-chain lending infrastructure:

Users can deposit assets on any supported chain and borrow and lend on other chains or protocols without bridging assets.
Rates on different protocols and chains can be automatically matched to help users find lower borrowing rates or higher returns on deposits.
During the borrowing and lending process, the user's assets and collateral capacity are no longer limited to a single chain and protocol, thus improving overall capital efficiency.
Strategies such as cross-chain arbitrage and leverage are supported, eliminating the need for cumbersome asset movement.

Throughout the process, users only need to operate in Soul’s interface, with the underlying cross-chain communication protocols such as LayerZero synchronizing assets and data. In order to enhance the robustness of the system, Soul also accesses the CCIP of Wormhole, Axelar and Chainlink as a backup channel in case of communication interruption.
Team Background and Current Progress

Soul Protocol is developed by Soul Labs, with team founder Ahmed S, who previously developed Hatom. the project has maintained a low-profile over the past year, and is now live on a test network that supports mainstream chains and lending protocols, and is open to testing and feedback.

Soul Protocol operates on a community engagement and testing incentive model. In 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 when the main network is released.

The project has not yet disclosed any external funding information, but is advancing testing and product optimization through community participation. Users can help identify issues, make suggestions, and earn rewards by participating in testing.