Introducing Xenon

Xenon Protocol
4 min readDec 14, 2021

Setting the backdrop…

In a developing ecosystem, liquidity is oftentimes an issue that occurs as the ecosystem develops and grows. New protocols pop up left and right, with users piling in, hoping to be early in the next big one. As time goes on, this liquidity fragmentation doesn’t disappear — it actually becomes more of an issue for users who wish to take on larger positions or process larger orders

For those with large sums of money, liquidity is often a make-or-break for if they choose to participate in a protocol. If there’s no means of getting out with their money, why bother depositing any in the first place? As we all know, whales are the ones who run this casino. Without them, we’d all just be trading against each other with scraps from our McDonald’s paychecks. As much fun as that might be, there’s a better way to do things.

Liquidity fragmentation : a key issue in developing ecosystems

Xenon Protocol is a solution for this issue of liquidity — a first of its kind application built in an exciting and developing ecosystem. Xenon is a composable margin lending protocol, targeting lenders (the ones with the money) and traders — otherwise known as the borrowers (the ones who are in search of an additional capital boost)

What is Xenon?

Xenon operates as a “one stop shop” in the Solana ecosystem, providing two useful products to its users: lending pools and a margin account. For too long, Solana’s DeFi protocols have been detached from each other — with limited opportunity for users to provide liquidity wherever they please. Sure, there are a ton of promising and unique protocols, but what fun is it if we can’t take out leveraged positions and juggle between them!

Catering to both traders and lenders, Xenon fixes this burning issue. Users can utilize leverage trading on any integrated DeFi protocol they choose, with the ability to take on under-collateralized loans — something not currently accessible for most users in the ecosystem. For the nontechnical, this means you can borrow more money than you have — something a lot of us can benefit from. Currently, most users who wish to take on margin positions are forced to take on restricted overcollateralized or undercollateralized loans.

This isn’t an issue on Xenon.

Xenon provides a central liquidity avenue by encouraging lenders with attractive and sustainable yields — eliminating the harm of rogue liquidity providers in it for a quick buck. Depositors no longer need to stress over where to put their money, as Xenon provides one pool to rule them all.

Those who wish to trade don’t have to worry about locking up their capital, as they can send it freely to any of the integrated protocols. This means you don’t have to worry about being sidelined for big gains, as your capital isn’t trapped behind iron bars. Instead, it can go right back into your greedy hands as you do whatever you please with it.

Liquidity is king, and Xenon is working towards fixing this issue of fragmentation in the ecosystem — once and for all. Xenon is currently integrated with major Solana protocols such as Serum and Raydium — with plans for more integrations coming as the target protocols start open sourcing and providing devnets to test on. Acting as a mediator of liquidity will benefit the protocol, as users can feel comfortable interacting with it due to its simplicity and utility.

The Future of Xenon

While Solana is currently one of the highest valued tokens on the market, the ecosystem is still very much in its initial stages. Xenon provides a solution for this developing ecosystem by laying the infrastructure for composability and concentrated liquidity.

While new protocols will only continue to pop up at a rapid pace, Xenon hopes to become the most composable protocol on Solana. As users develop trust in protocols that are the most trusted and most well known, and as Xenon adds more integrations, their reputation amongst users will only continue to grow. This flexibility will benefit both lenders and traders, as there will be more opportunities to earn yield and more ways to lose money gambling on margin. It’s a win-win, right?

Composability is the core feature of Xenon. By composing over major DeFi legos, Xenon would act as a glue layer binding the whole Solana DeFi ecosystem

Xenon also plans to establish a governance token sometime in the future, and with this will come a DAO. Those who hold Xenon governance tokens will have the ability to possess voting rights, and with this would be able to vote on important decisions concerning the protocol and its future. Sure, you could sell them too, but you’ll possess no power or influence. Choose wisely, anon.


Time will tell regarding how large the Solana ecosystem will grow, but if current trends are any indication, there will be an influx of new users coming to the space. Whether you’re a whale looking for a sustainable APR or a degen wanting to leverage trade on other DeFi protocols, Xenon has something for all.

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