Vela Exchange's Beta Success and Technical Issue with $VLP

•

@vela_exchange entered the scene with their innovative perp dex on Arbitrum in late Jan. Their beta launch was a smashing success, surpassing a massive $4 BILLION in trading volume in just one month💯 But they had to end their beta earlier due to a technical issue they found🧵

2/ During their rigorous testing, their white hats brutally attacked their smart contracts to pinpoint any bug present, and they discovered a major discrepancy in the $VLP pricing mechanism. What caused this issue? Why does it matter?

3/ First, what's $VLP? $VLP is Vela's innovative liquidity provider token. - It's backed 1:1 with $USDC - It reduces the risk of liquidation and insolvency - It has a dynamic supply that adjusts to market conditions - It can be staked to earn rewards from platform fees

4/ Here’s what happened: After the FDIC took over Silicon Valley Bank (SVB), $USDC temporarily de-pegged from the dollar. Because of this de-peg, and $VLP being backed 1:1 by $USDC, the price of $VLP became inaccurate once $USDC returned to peg.

5/ $VLP showed $1.11 instead of $1.04 due to a simple calculation error, the PnL of trades was incorrectly factored in the $VLP price formula. And this prompts @vela_exchange to halt beta testing to prevent a liquidity crisis and safeguard users.

6/ The team took immediate action. - They issued refunds and closed orders. - They ended $VLP staking and paid back users in $USDC. - They hosted an AMA within a day to address any concerns and provide further clarification.

7/ Losing rewards and ending beta without warning is a bummer. But should we panic? I don't see a reason why anyone should. This incident highlighted the importance of white hats in the team, constant smart contracts auditing, and transparency of the @vela_exchange team💯💯

8/ But that's the whole point of a BETA. To find potential bugs or exploits and protect the users from any loss. Vela went above and beyond by hiring multiple white hats to attack and battle-test their smart contracts. Many small issues were found and resolved as planned.

9/ While searching for ALPHAS, the first thing I see is the structure of team and their transparency. Finding all the major and minor bugs and being transparent about it, rather than shit-shading the users; are my top reasons to choose Vela💯💯

10/ So, what's next for @vela_exchange? Official Launch! The plan stays the same, launch in May with additional features: medium.com/@vela_exchange/beta-ending-soon-whats-next-the-official-launch-is-coming-timeframe-revealed-bda045797755 Personally, I'm excited about 1-click trading and next gen charts. I'll be posting a thread soon going over official launch!

btw, GOOD News for you tradooors🔥🔥 We'll host a trading competition in @CryptoKingdom07 once the official launch is here💯 Make sure to join up and don't let this chance to win a nice bag of $VELA pass you by!! Vela - app.vela.exchange/?refer=KKBLLB0L Discord - discord.com/invite/nGCztpE6Dk

I hope you've found this thread helpful. Follow me @CamPauldingYT for more.