Logarithm Deep Dive, the LPDfi Narrative

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💎 Composability & Yield 💎 LSDfi has been a game-changer for Yield, Liquidity & Composability. Well, imagine a Narrative with a similar potential, where you are super early. 𝗟𝗣𝗗𝗳𝗶 is the next game-changing Narrative & Logarithm is the Initiator. 👇🧵 + 𝗔𝗟𝗣𝗛𝗔

The First Movers in the LSDfi Growth recently are the ones that have reaped the most users, liquidity and profit. I've talked about these innovative projects many times already, projects such as @LybraFinanceLSD & @pendle_fi.

There is a similar Narrative with a huge potential that is still in its infancy. This is a new Primitive called LPDfi, a finance primitive around LPDs. Don't know what LPDs are? Keep reading 👇 LPDfi narrative is inevitable.

Introducing @logarithm_fi! Logarithm is a Liquidity layer for LPDs with perpetual delta-neutral strategies built to achieve the highest available capital efficiency on the market. ❔ How ❔ By routing liquidity through various LPDs and hedging exposure to volatile assets.

1️⃣ Introduction 2️⃣ Problems & Solutions 3️⃣ Technology 4️⃣ Tokenomics & Roadmap 5️⃣ Edge 6️⃣ Alpha 7️⃣ TL;DR 8️⃣ Conclusion

1️⃣ Introduction First, what is LPDfi? This is Logarithm's term for the nascent market of LPDs, or Liquidity Providing Derivatives. 👉 LPDfi describes the projects using @Uniswap V3 LP positions and building products on top of it, such as options or perps.

Logarithm is aiming to use Composability, a powerful concept, to push DeFi forward. Composability basically means that your assets can do multiple things at a time. This produces seemingly infinite use cases for assets – a few of these are LP tokens and LSDs.

Liquidity Providing Derivatives will allow to enhance UniV3 Liquidity → Hence Unlocking a substantial amount of Liquidity in the Crypto Markets.

2️⃣ Problems & Solutions With the release of Uniswap V3, capital efficiency has improved significantly However it is a double-edged sword: The difficulty of working with CLMMs (Concentrated Liquidity Market Maker) creates a barrier to liquidity providers to supply their assets

𝗖𝗼𝗻𝗰𝗲𝗻𝘁𝗿𝗮𝘁𝗲𝗱 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 By concentrating liquidity within specified price ranges, funds unlock the potential of greater levels of capital efficiency. → Requiring less deposits from the user all while still providing the same or even better depth.

However, this has also increased the need to manage these positions to maintain efficiency. CLMM requires a constant rebalancing of the LP position to avoid 𝗜𝗺𝗽𝗲𝗿𝗺𝗮𝗻𝗲𝗻𝘁 𝗟𝗼𝘀𝘀. It is a complex, unpredictable operation and is usually executed incorrectly.

📈 𝗜𝗺𝗽𝗲𝗿𝗺𝗮𝗻𝗲𝗻𝘁 𝗟𝗼𝘀𝘀 In UniswapV3, liquidity is as dynamic as the price ranges you select. Impermanent Loss can hit harder due to this process.

• Deviating from your price range allows price to continue moving against you, leading you to lock in losses in an attempt to catch up. • If the market prices fall outside the set range, you will stop earning fees and become exposed to the downside of the single asset.

• Many hedge impermanent loss by buying DeFi options or shorting volatile assets. • However, DeFi options are not liquid enough, complex and can be expensive for hedging impermanent loss risks. • And Shorting volatile assets is less efficient regarding capital use.

𝗦𝗼𝗹𝘂𝘁𝗶𝗼𝗻 None of the IL hedging methods currently unleash the full potential of UniV3. Logarithm solves this by: 🔹 Hedging against IL for market makers, helping them stay profitable 🔹 Supplying liquidity to LPDfi protocols so they can offer deeper liquidity to users

Logarithm users will ultimately earn four types of fees: 🔹 LP fees from Uniswap 🔹 Fees from LPDfi protocols 🔹 Logarithm incentives for providing liquidity in $LOG 🔹 Boosted $LOG rewards from LPDs

Logarithm enables users with any capital size and knowledge to grow their portfolio from natural Real Yield sources, with previously inaccessible strategies. As a result, Logarithm Users (Loggers) will finally be flourishing, unbothered, moisturized, happy, focused.

Logarithm is tearing down barriers and bringing market making to the masses. These are good solutions that require solid innovation to operate. Let's see the innovative Technologies allowing that 👇

3️⃣ Technology Always wanted to be a market maker but don't know how to LP, and you want to avoid the risks mentioned above? No worries, Logarithm has got you covered with its innovative products. ↓

🐚 𝗟𝗶𝗾𝘂𝗶𝗱𝗶𝘁𝘆 𝗦𝗵𝗲𝗹𝗹 The easiest way to think of Liquidity Shell is as a yield aggregation platform or a liquidity router, finding the best APY on the market. It is a layer on top of LPDs.

Liquidity Shell directs users’ deposits to the highest-yielding strategies across LPDfi. To maximize efficiency, users will be able to deposit single-sided liquidity, as well as decide whether they want to use Logarithm's Nautilus Vault strategy.

⚓ 𝗡𝗮𝘂𝘁𝗶𝗹𝘂𝘀 𝗩𝗮𝘂𝗹𝘁𝘀 It will be the first product to be introduced into Logarithm's ecosystem featuring real-time adjustable delta-neutral strategies with smart perps hedging, to avoid Impermanent Loss.

Nautilus Vaults will rebalance Uni V3 LP positions and hedge underlying volatile assets by opening short positions on GMX They plan to build other products based on Nautilus Vaults Logarithm's aim is to create a one-stop liquidity management layer on top of LP-centric protocols

The strategy has been backtested over 6 months, with a total APY of 11.8%. Users can simply deposit USDC into the Nautilus vault and get the strategy automatically deployed, rebalanced and managed by Logarithm. For Further Strategy Analysis: twitter.com/logarithm_fi/status/1668502263038394368

𝗖𝗿𝗼𝘀𝘀 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝗘𝘅𝗲𝗰𝘂𝘁𝗶𝗼𝗻 Logarithm will also introduce a cross-strategy execution utilizing different chains, AMMs, and hedge methods to open new markets for the protocol.

4️⃣ Tokenomics & Roadmap $LOG will initially be a Governance token. The $LOG token will get more utility over time, such as supporting liquidity mining initiatives. It may also have future applications, subject to a DAO vote and proposals.

We don't publicly know yet about the Token Distribution. Token allocations and tokenomics are not finalized because they're still being discussed and being thought out by team members and advisors. I'll let you know when we'll know more.

We're still super early, which means we have an edge knowing about an innovative project & an innovative narrative before it even "exists". So, many things are yet to be done. But we know already what's planned for Logarithm, and it's going to happen very soon!

I will let you know about the Beta and the Public Sale when it happens, end of the year. To be sure to not miss it, feel free to follow @logarithm_fi Account & Join their Discord Server: discord.gg/GQJ29r4dnb You might get some benefit from it, being early. 👀

5️⃣ Edge ▪️ LPDfi may seem unfamiliar and novel, yet its potential should not be underestimated since LP is the fundamental element of DeFi. ▪️ First Mover → Naming the Concept & Narrative. ▪️ Early on a huge Market ▪️ Great Collaborators & Advisors. ▪️ Experienced Team

▪️ Building on Arbitrum → Ultra-low transaction fees, greater capital efficiency, fast transactions & composability → Bring market making to the masses. ▪️ Great Website, Strong Visual Identity & Branding, Thoughtful Educational Content → It shows attention to Details.

▪️ Cross-chain & Inter-composable ▪️ Improves Capital Efficiency ▪️ High Real Yield APY ▪️ Proven Strategy with a cutting-edge execution

A Partnership with @LimitlessFi_: Logarithm will be bootstrapping liquidity to Limitless 👇 twitter.com/logarithm_fi/status/1682441986068959254

6️⃣ Alpha ▪️ The tests were made on GMX V1 which had higher fees and higher funding rates → The V2 will thus greatly improve the yield and results obtained by their strategy. ▪️ Beta Access soon for a selection of committed users 👀 ▪️ Public Sale should be end of the year

7️⃣ TL;DR

8️⃣ Conclusion This thread was made in collaboration with @logarithm_fi You know when I put my threadoooor hat on instead of my curatoooor hat, it's to talk about something that could benefit you. Here we are talking brand new Narrative & Innovation 🫡 As always it's NFA.

🔸 Official Links 🔸 X: @logarithm_fi Website: logarithm.fi Discord: discord.gg/GQJ29r4dnb Docs: docs.logarithm.fi Public Deck: docsend.com/view/js9cmfaycei97wx6

Find more Alpha about LPDfi Narrative in my Newsletter: tinyurl.com/shirosalphas Also find Live Alpha in my TG Channel: bit.ly/shiroalpha Find out about the Catalysts & Alpha early, have your edge on the Market.

Some Logarithm Chads & Inspirations for this thread: @Flowslikeosmo @2lambro @eli5_defi @Louround_ @crypto_linn @0xTindorr @splinter0n @arndxt_xo @thelearningpill @TheDeFISaint @CryptoGideon_ @0xsurferboy @Defi0xJeff @0xSalazar @OnchainDataNerd @acidshrek

Frens that should be interested by LPDfi: @DeFiMinty @DeFi_Taha @chilla_ct @IamZeroIka @CryptoGirlNova @schizoxbt @WinterSoldierxz @milesdeutscher @0xFlips @0xFinish @0xShinChannn @poopmandefi @blocmatesdotcom @LouisCooper_ @defi_mochi @rektdiomedes @wacy_time1 @Slappjakke