The convergence of TradFi and DeFi is imminent.
TradFi envisions the "On-chain Fund Platform" in DeFi.
This is why large Asian banks are backing @SolvProtocol and pushing the fund protocols towards mass adoption.
A 🧵 on Solv's GMX V2 funds + yield opportunities + AIRDROP.
What is Solv Protocol?
Solv is your on-chain fund platform.
As an individual, you can access and earn yields on diverse assets, managed by experienced fund managers and professionals.
It currently focuses on LP-centric funds, which I will showcase GMX V2 as an example.
Imo, the investors and backers of this project differentiate apart from other vault protocols in DeFi.
It is backed by Nomura Securities, the Japanese banking giant, and others like @BinanceLabs and UOB bank,
It will help penetrate their TradFi partners to raise money via Solv.
In Solv Funds, you can explore yield opportunities generated from LP across leading DeFi protocols.
There are LP funds on perps like GMX and KTX, and RWA that is backed by U.S. Treasuries.
I'll use the most interesting fund on Solv: GMX V2 Delta Neutral Pool, managed by Blockin, as an example.
Liquidity in this pool will be used for:
• Provide LP on GMX V2
• Hedge on Binance, creating delta neutral position.
The V2 funds are now running with over $24M AUM (included the pool for institutions), providing over 25% of the total liquidity for GMX V2.
The 30d APY ranges between 7.44% to 27.07%, which is impressive for stablecoins with no active management required.
twitter.com/SolvProtocol/status/1716719042638348623?s=20
I asked the team how can the pool APY sometimes be higher than its underlying protocol, GMX.
It happens from the funding rate as it contributes
Moreover, the APY on this pool tends to go up as GMX receives Arbitrum STIP.
And it's clear that they will do $SOLV airdrop for the open-end fund buyers/holders.
Yield = Trading fees + Funding rates + $ARB STIP + $SOLV airdrop.
In the end, I'd consider APY in range of 15-30%.
On the risk management side, Solv deploys a 24/7 monitoring system.
Multiple alert triggers are set at varying risk levels. In extreme case, automatic safeguards kick in to pause trading and liquidate positions, minimizing losses.
And they use "Multi-party Controlled Vault" to ensure there is no point of failure due to single entity e.g. fund manager, Solv, investors.
Multi-party Controlled Vault consists of:
• Gnosis SAFE (multi-sig authentication)
• Cobo Argus (hierarchical permissions)
• Solv Safeguard (Any transactions involving misappropriation of funds are excluded）
Solv will also continue collaborating with more professional asset management teams e.g. @Blockin_ai.
Blockin Capital is a leading crypto trading house that specializes in developing quantitative DeFi-based strategies, including LM, market making, arbitraging
Upcoming Pool: KTX Finance
Solv is about to release open-end funds built on KTX, the biggest Perp DEX on Mantle.
They are really committed to becoming a liquidity layer for Perp Dexs. So there will be an opportunity to access a good yield source on Mantle too.
twitter.com/SolvProtocol/status/1720269888839971131?s=20
I think if you want to use vault protocols and earn passive yield. Solv is one of the promising protocols to use and earn enhanced yields with airdrop potential.
This thread was made in collaboration with Solv. Please always DYOR before using any protocol.