Suilend to Run Monthslong Points Program With a Twist

As an analyst, I’d rephrase it this way: Starting on Tuesday, Suilend introduced an incentives program designed to tackle some of the most significant challenges, according to founder Rooter, that protocols face when trying to attract users with reward systems. Over the last year, many protocols have rolled out their own point programs, typically serving as a forerunner to issuing tokens.

This year, Sui’s Decentralized Finance (DeFi) sector experienced a significant expansion of nearly threefold, fueled by the revitalized market and the allure of the “Sui Rewards” initiatives spearheaded by the Sui Foundation. Notably, financial protocols like Suilend provided competitive interest rates reaching 19% on stablecoin deposits due to this program.

As a crypto investor, I’ve noticed that point programs are prevalent in the Sui DeFi landscape, similar to that of Solana, an ecosystem with which Rooter and Suilend’s team have extensive experience, having developed Solend – one of Solana’s leading borrow-and-lend protocols.

Rooter has expressed disapproval towards certain Solana programs’ practice of concealing their inner workings. In an article published in late March for Consensus Magazine, he strongly criticized these “points” as exploitative, indolent, and akin to gambling, due to their opaque nature.

One significant distinction in Sui’s reward system is its utilization of blockchain technology, according to Rooter. In an interview with CoinDesk, Rooter explained that the points amassed by users for actions like depositing USDC would be documented on the blockchain. This data can then be processed by other smart contracts.

“The design space is open for people to build stuff on top of this,” he said.

Each day, Suilend distributes a total of 10 million points among all its users. The size of each user’s share is proportional to the amount of their deposits.

With a total value locked (TVL) of $45 million, Suilend ranked third among borrow-and-lend platforms on the Sui network, following Navi ($121 million) and Scallop ($112 million), according to DefiLlama. In just the previous month, Suilend experienced a remarkable 44% increase in TVL, surpassing the growth rates of its major competitors, Navi and Scallop, as well as every other Sui protocol monitored by DefiLlama.

As a crypto investor, I’d interpret Suilend’s points program as having a prolonged duration, according to Rooter’s estimation. However, it’s essential to note that this isn’t definitive, and the program may not last indefinitely. Additionally, there’s no guarantee that the program will result in a token issue, which is a common sensitivity among founders due to regulatory uncertainties.