Testnet Time: Will It Blend?

Script3
5 min readJan 18, 2024

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Taste Testing Blend 😋

Hi 😎

Blend has been released to Testnet️!
Go do some lending, some borrowing, some backstopping — you’ll be participating in the development of a global financial building block!

Link: testnet.blend.capital

Docs: https://docs.blend.capital/

Code: https://github.com/blend-capital/blend-contracts

How to use the testnet:

1. Make sure you have a Stellar browser wallet installed:
- Freighter: https://www.freighter.app/
- xBull: https://xbull.app/

(All steps will be shown using Freighter.)

2. Switch your wallet to the Stellar Testnet by clicking the selector in the upper right corner of the extension and selecting ‘Test Net’.

3. Go to https://testnet.blend.capital/

4. Connect your wallet by clicking on the button or banner shown below and signing the prompted wallet message.

5. If your testnet account is unfunded, the banner shown below will appear.

Click on your browser wallet extension to fund your account on the Stellar test network. The message shown below will be shown. Click the ‘Fund with Friendbot’ button.

6. Once your testnet account is funded, another banner will appear (shown below). Click this and sign the prompted wallet message. This will provide your account with Blend testnet assets.

The testnet assets you will receive are:
- 10,000 BLND
- 1,000 USDC
- 0.5 wETH
- 0.1 wBTC

7. You’re ready to start Blending! 🎉

Help! I’m Still Confused 😭

Hop in the Blend discord, and we’ll try and help!
https://discord.gg/5fhgCGEnUt

Why should I care about this?

Well we’re proud of it — but regardless of our feelings, there’re a variety of factors that should excite anyone!

On-chain permissionless lending on Stellar!

This is a very big deal — now the Stellar ecosystem can offer things such as:

Blend allows wallets to offer noncustodial interest and credit features, elevating their product offering to that of a full-service financial app!

Trading interfaces can integrate with Blend to offer their users leverage!

Remittance companies (and other organizations that utilize Stellar as financial rails but rely on real-world lending) can move their borrowing and lending on-chain to improve transparency and capital efficiency!

DeFi protocols that utilize borrowing and lending as one of their components (i.e. CDP protocols) can build on top of Blend to leverage its security and liquidity, while focusing on the innovative, unique aspects of their app!

So What’s the Secret Recipe?

Blend is the result of a grueling design process that would take too long to explain here (we’re saving it for future articles). Instead we’ll give a brief taster of its key ingredients:

1. Maximum Flexibility: Blend was built as a primitive hyperstructure that allows anyone to create new pools with whatever assets and parameters they require. You can build literally ANY product or protocol that requires lending on top of Blend while still inheriting its security and capital efficiency.

2. Ruthless Capital Efficiency: Blend utilizes a reactive interest rate model which maximizes capital efficiency by ensuring capital flows where it’s most useful. Additionally, assets lent to one pool can support a variety of loan-to-value ratios depending on their paired liability/collateral asset’s risk profile, significantly reducing liquidity fragmentation.

3. Painless Liquidations: Blend’s liquidations only liquidate the minimum amount required to return the account to a healthy position.

4. Oracle Risk Mitigation: Blend only relies on oracles to trigger liquidations rather than allowing them to value collateral assets. This protects users from being unfairly liquidated due to oracle failures. Additionally, Blend’s utilization caps, combined with its reactive interest rates, minimize risk of overborrowing by minimizing the amount of idle capital available for borrowing during an oracle failure.

5. Bad Debt Protection: Each Blend pool has a built-in backstop module which insures pools against bad debt. This efficient and transparent insurance mechanism protects lender funds in the most extreme scenarios.

6. Insurance Requirements: Blend requires pools reach a minimum backstop module deposit threshold before they can be turned on. This prevents bad actors from easily creating unsafe pools, as they would also have to convince backstop users to insure said unsafe pool.

Ok I’m a user and I’m pumped — now what?

Go check out the app! Suggest features! Participate in curating the leading lending and borrowing experience on Stellar!

Note: There may (will) be some bugs at this time, and new features will be added.

Ok I’m a project and I’m pumped — now what?

Go check out the app! Dig through the code! Demand features!

Interested in integrating or building on Blend? Reach out to us! Additionally, a portion of the initial BLND distribution is going to Stellar ecosystem organizations, so let us know if you’re interested in getting added to that list!

Discord: https://discord.gg/5fhgCGEnUt

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