Analyzing Serum’s exposure to threats, the response from Solana’s DeFi community, OpenBook Program Statistics, and the future of DeFi on Solana.
Introduction
The OpenBook Program was deployed on Nov. 14, 2022 after contagion from the FTX collapse spread deep into Solana’s DeFi ecosystem. Among the key projects affected was Serum Protocol.
A quick primer — Serum Protocol was one of Solana’s core DeFi infrastructures with a Central Limit Order Book (CLOB) mechanism that ensured optimal order matching on decentralised exchanges. This mechanism powered some of the biggest DeFi protocols on Solana including Raydium, Mango Markets and Jupiter Aggregator.
Serum’s Exposure to Threat
Amongst the many repercussions of FTX’s downfall was a security breach on the exchange, and thus a possibility of the Serum program update key being compromised. The smart contract, together with all the protocols that ran on top of it were under imminent threat.
Serum DEX Program flagged on SolanaFM Explorer amidst the FTX hack. Source: SolanaFM
Mango Markets co-founder Maximilian Schneider was one of the first responders of the situation — he reported that Serum’s update keys were not controlled by the SRM DAO. Sources from the community later verified that the Serum keys belonged to FTX — this meant that the program keys could potentially be compromised and fall into the hands of bad actors linked to the FTX hack.
Mango Markets co-founder Max Schneider reporting Serum’s potential exposure to threat. Source: Twitter
Prominent voices in the community also cautioned against interacting with the Serum program. Users as well as market makers were advised to cancel any open orders they had on Serum-powered protocols and put a hold on active trading activities.
Response From Solana’s DeFi community
To safeguard this integral part of Solana DeFi, developers and leaders from prominent protocols joined hands to deploy OpenBook, a community-driven fork of Serum’s V3 program.
This fork of the Serum program essentially allows the community to have a shared custody of Serum’s infrastructure and governance; taking over where FTX had left off.
The new OpenBook Program. Source: SolanaFM
Several projects played crucial roles in the deployment and integration of OpenBook into Solana’s DeFi ecosystem:
- Decentralized exchanges (DEXes) like Raydium and Solape now run on and share liquidity to OpenBook.
- Jupiter Aggregator, Solana’s key liquidity aggregator, has included liquidity from OpenBook in their SDK/APIs for future integrators.
- Switchboard, a leading Solana oracle protocol, has allowed price data to include OpenBook's liquidity.
- OpenSerum, a DeFi market data provider, has developed extensive dashboards covering the various markets utilizing OpenBook.
- Mango Markets has announced that their V4 program will integrate the OpenBook program.
The first batch of Solana DeFi protocols integrating the OpenBook program.
On top of these integrators, key members from Solend Protocol took charge of managing OpenBook’s Twitter and Discord channels, actively engaging in community discussions and encouraging migration into the community-led fork.
OpenBook Program Statistics
At the time of writing, OpenBook’s top 24H markets (SOL/USDC and mSOL/USDC) had recorded $2,100,000 and $1,000,000 in trading volume respectively. Within the first week of its launch, the OpenBook program saw over 1600 Daily Active Users (DAUs)* — these numbers are set to increase as more integrations take place across the ecosystem.
*Daily Active Users include wallets interacting with SOL, wSOL, USDC and USDT tokens respectively via OpenBook.
OpenBook program statistics: 24H Trading Volume, Daily Active Users (DAU)
In comparison to other Solana DEXes, OpenBook has been picking up the pace — the visual below shows OpenBook surpassing Serum in terms of daily active wallets, making up 4.2% of active wallets across all Solana DEXes.
The Future of DeFi on Solana
The downfall of FTX presents an opportunity to rebuild Solana’s DeFi ecosystem as a community, with collective governance and decision-making rather than having a single entity run the show. The development of OpenBook is a testimony to the resilience of builders on Solana — despite the market conditions, builders have shown exemplary efforts in implementing transparent, community-driven solutions.
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