Stellar Network Real-World Rails Bring DeFi to New Audiences

Despite an array of improvements in blockchain infrastructure, the number of users within DeFi has not scaled quite as quickly. While many factors come into play, accessibility is necessary for DeFi to reach a large portion of its product market fit in underdeveloped and underbanked parts of the world.

Transaction costs on some chains can be so high that the experience is unfeasible for people in less developed nations. While solutions like Ethereum Layer 2’s look to bypass high transaction fees, the interoperability with fiat on and off ramps for L2 DeFi is riddled with hurdles such as bridges and excess fees.

These barriers limit scalability by prohibiting millions of people scattered across the world from being able to participate in modern DeFi.

With the implementation of Beans App and Blend Studio through the Soroban smart contract platform, the Stellar ecosystem aims to provide a scalable, low-cost, and easy-to-use DeFi solution for those who are underserved by the current state of DeFi. Through Beans and Blend, users can onboard straight to DeFi applications with physical cash without intermediaries such as banks, while utilizing low-cost infrastructure on Stellar.

What is Blend?

Blend is a universal liquidity protocol created by Script3. Blend allows anyone to create a permissionless and secure lending market, whether a DAO, token issuer or on-ramp and off-ramp solutions.

The protocol allows for creating a flexible lending pool with a backstop module that acts as a form of insurance. During the creation of these lending pools, the creators can take responsibility for the nature of the pool itself by controlling the supported assets, collateral requirements, oracles used and more. These pools are also designed to adapt to volatility, and interest rates can adjust automatically with no proposals necessary.

Being one of the first projects building on Soroban (which recently launched on the Stellar mainnet), Blend has positioned itself to play an integral role in the borrowing and lending within the Stellar ecosystem. Blend has partnered with Beans to demonstrate proof-of-concept of their DeFi integrations.

What is Beans?

Beans is a non-custodial Stellar wallet that enables money to be sent with low fees with a “bank-like” interface designed to be approachable and familiar to new users. Unlike many blockchain wallets, Beans does not require private key storage and also allows for fiat on-ramps and off-ramps directly in-app. Through this partnership, Blend can provide secure and variable earning opportunities for Beans users.

Beans supports major assets such as USDC on Stellar and has integrated MoneyGram Access, allowing global cash-in and cash-out transactions at any MoneyGram location. MoneyGram operates in over 180 countries across the world and allows users to convert physical cash into digital dollars or vice versa, and was originally built with the intent of being able to send money to friends or family that are located in different countries.

Onboarding the Next Wave of DeFi Users

Via Beans and Blend, opportunities for underserved markets become much more plausible using the Stellar network, making the move from cash to DeFi simple and realistic. The process of cash to DeFi is an extension of the Stellar Anchor Directory. Through the Anchor Directory, Stellar users have a network of global payment anchors centralized in one easy-to-use hub. With this option, users can sort, send and receive various assets such as fiat, $USDC or $XLM through a singular interface.

Through this partnership, users in one country can take cash, on-ramp it into crypto through Beans, and send it to a counterparty on the other side of the world. The recipients can then use those assets within Blend to earn yield, with the option of withdrawing those funds into their local currency at any given time.

Over time, development with Soroban will expand DeFi on Stellar, allowing users to have more flexibility in their assets and how they use them. By tapping into a user base otherwise locked into a cash economy, the Stellar ecosystem aims to onboard as many people as possible directly into DeFi.