As the blockchain wars continue to heat up in the second quarter of 2021, yield farming is no longer an activity purely reserved for Ethereum users. The simple act of staking your assets into a platform to earn more tokens has quickly become popular on other blockchains such as Binance Smart Chain and more recently, Solana.
Although it has not yet reached the level of participation seen on other networks, the Solana ecosystem is growing steadily, with projects such as Mercurial, Orca, and Raydium bringing unprecedented attention to Solana.
Yet, the Solana ecosystem may be trickier for newcomers to connect and access the many bountiful farms that are available. Although the lightning-fast speed and low transaction fees are very accommodating to veterans and retail players alike, it is not as simple as just switching networks on Metamask, and newbies may be put off by the drastic change in user experience and interaction.
However, do bear with us as we bring you this step-by-step guide to cross the chasm into the Solana blockchain. We will also touch on some of the platforms where you can begin your yield-farming adventure.
How To Get Started
Before you embark on your journey, you would need a wallet to store your funds. Unlike most blockchains that can be accessed using a regular Metamask or hardware wallet such as Ledger or Trezor, there are various wallets that you can choose from that can be used for storing funds on Solana. Among these wallets are Sollet, Solong, and MathWallet.
These wallets are all non-custodial, meaning that you are in charge of your funds, and they can be used to receive and send SOL or any other Solana Program Library (SPL) token. Although all of them can be used with little to no issue, we would recommend using the Sollet wallet built by the Project Serum team since it is highly compatible with most, if not all of the projects that are currently live on Solana. Below is a step-by-step guide on how to create a Sollet web wallet.
How To Create A Sollet Web Wallet
Step 1: Head to https://www.sollet.io/. If this is your first time, you will receive a prompt to create a new wallet. You will be presented with 24 seed words, which you will need for restoring your wallet, should you lose access to it.
Once you have verified that your seed words have been properly stored, click on the checkbox, and click ‘continue’. You may also opt to restore an existing wallet instead, if you already have a Solana wallet made elsewhere.
Step 2: Next, you may choose to add a password for an extra layer of security. Type in your password and confirm it, before creating your wallet. You may choose to skip the password step and create your wallet immediately. However, we recommend picking a password to mitigate the risk of losing your funds.
Step 3: Congratulations, your wallet has been created! Here, you can see your asset balances in your account as well as their respective addresses.
Step 4: Note that unlike traditional wallets on Metamask with a unique address related to it, you will have different addresses for receiving and sending various assets across the Solana blockchain. To add a token, click on the ‘+’ symbol, and you will be prompted with a selection of tokens to choose from, or you may choose to add the token by keying in the token details manually. Regardless, the addition of token addresses will cost a small fee, payable with 0.002039 SOL.
Now that you have set up your wallet, it’s time to start loading it up with funds. Although a cross-chain bridge between the Ethereum and Solana network known as Wormhole is currently being built, the easiest way to transfer your assets is through FTX or through the Sollet wallet itself.
Transferring from FTX
Step 1: Log onto your FTX account and head over to your wallet to view your balances. If you do not have any available funds in your FTX account, you may deposit some by clicking on ‘Deposit’ for the chosen asset.
Step 2: After that, to withdraw from FTX to the Solana blockchain, find your preferred asset and click on ‘Withdraw’. For this example, we will choose to withdraw USDT.
Step 3: You will receive a prompt to withdraw USDT, where you have to enter the amount and your USDT address. You can enter an address from any of the supported blockchains listed at the top of the prompt, which FTX would automatically detect, or you may use a previously saved address. Once you’re done, enter your 2FA code and click ‘Withdraw’.
Note that withdrawals to the Solana blockchain are free, and you have to make sure to differentiate between the different deposit addresses for wrapped and native tokens. For example, wrapped USDT and native USDT on Solana would have different addresses, as highlighted by the warning below.
Step 4: After clicking ‘Withdraw’, your withdrawal request would be submitted. You can check the status of the request by heading to the ‘Withdrawals’ tab. Once the request has been completed, ensure that the funds are safely in the address you specified.
Transferring from Ethereum via Sollet
Step 1: Alternatively, you may choose to port over your funds from Ethereum via the Sollet wallet. Choose the funds you wish to convert and click ‘Receive’. In this example, we will be choosing USDC.
Step 2: After that, you will be presented with two tabs where you view the deposit options for the asset, SPL USDC or ERC20 USDC. Click on the latter, and you will be presented with the estimated withdrawal fee and an option to connect to MetaMask.
Step 3: After connecting your MetaMask, choose the amount you would like to convert and click on ‘Convert’. You will then receive two prompts from MetaMask - the first is to approve the conversion, and the second one is to send the funds. Once you’re done confirming the transactions, sit tight for the funds to be transferred into your Sollet wallet.
And there’s all there is to it! Now you’re all set up to start farming on Solana. But with an ecosystem that is so vast and new, you might be wondering, where do I even start? Well, before we dive into it, let’s take a look at some of the things to expect when interacting with the various dApps on Solana.
Like most dApps on other blockchains, you would need to connect with them using any supported wallets for that particular application. Similarly, performing and approving transactions is mostly the same as you would normally do on Ethereum or Binance Smart Chain.
You will receive a prompt to conduct the transaction, which would require the payment of transaction fees in the form of SOL, the native token of the Solana blockchain. But fret not, as the transaction fees are extremely low, sometimes costing less than a cent!
For instance, with SOL at $45, adding a token to your wallet would cost 0.002039 SOL or around $0.09. Placing an order on the Serum Dex would cost around 0.02 SOL or around 90 cents while a normal swap transaction (using Raydium) would cost 0.000005 SOL or approximately $0.0002! Compared to Ethereum, which could sometimes reach upwards of 10 dollars for a simple approval transaction, having even 1 unit of SOL would last you for a fair bit of time.