Lyve Finance

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Despite expectations, Linea seems to be lacking steam when compared to other L2s such as #Base, @zksync, @Arbitrum, ... However, Top projects are still being developed and waiting for the right time to explode. An Omnichain LST Liquidity protocol - @LyveFinance is one of them🧵

This thread will cover: 1⃣ Lyve Protocol overview 2⃣ Lyve mechanism 3⃣ Tokenomics 4⃣ Audit 5⃣ Roadmap 6⃣ Some thought

1⃣ Lyve Protocol overview 🔹 #LSDfi is very important to Defi as it solves, improves 3 problems: ▫️ Security of Ethereum network ▫️ Provides ETH holders with a risk-free benchmark rate ▫️ Opens up possibilities for more innovations as well as enhancing capital efficiency.

🔹However, the application and profitability of LSTs on L2 are still very limited. Due to the lack of options and farming opportunities, most $ETH holders can only be used on Ethereum, some L2. Lyve provides a much better choice.

🔹 Lyve Protocol is an #LSDfi project built on the @LineaBuild and @ethereum ecosystems. Lyve has just acted as a bridge to help transfer #LSTs (Liquidity Staking Tokens) from Ethereum to Linea.

🔹Lyve support various interest-bearing assets for yield farming. Users cant only stake LST (such as Lido, Fraxeth, etc.) to farm but also stake LP assets to farm. This can effectively improve the yield and utilization rate of LST and provide users with higher returns.

🔹 In addition, Lyve also acts as cross-chain liquidity layer to help projects that want to deploy LST take advantage of Lyve's abundant liquidity. 🔹 In future, Lyve will not only build on Linea, but also expand to other blockchains, L2s to implement multichain protocol vision.

🔹 But while Linea seems to be quite inferior to other L2s, why did Lyve choose Linea and not L2s with billions dollars TVL like ARB, OP? According to Lyve, they had a talk with Linea team. Linea team's dedication and responsibility will help them receive stronger support.

🔹 Consensys, the company behind Linea has long experience in technology. They have also been developing cheap, fast ZK tech for many years. Choosing Linea Mean has technological advantages, dedicated support, and a capable team.

🔹 The reason users should choose to farm on Lyve is because: ▫️ More productive and safer: Lyve provides returns that exceed those of LSD. Most LSDfi protocols have relatively low returns. This does not appeal to Defi degens who are used to farming pools with very high %APY.

▫️ It safe: POFT is entirely immutable and fully decentralized. No one can control this #ERC20 tokens deposited within it. Therefore, holding POFT is as safe as holding the original ERC20 token.

▫️ Maintain $ETH Exposure: If you deposit X $wstETH into Lyve, after a while you can withdraw X $wstETH + farm rewards. Lyve guarantees you can withdraw $wstETH = $ETH. It mean you achive excess farm earnings while maintaining $ETH exposure.

2⃣ #Lyve mechanism 🔹 #LSDfi improves capital efficiency of $ETH Staking Pools. Types of LSD models include: ▫️ Defi Liquid Staking Providers ▫️ CEX Liquid Staking ▫️ CDP Stablecoins ▫️ Index LSDs ▫️ Yield Strategies ▫️ Money Market

🔹 But it seems that LSDfi has not really exploited its potential for use. The LSDfi protocols and LST are largely new to Ethereum. A few are available on Arbitrum, Optimism. There are many potential layer2s such as zkSync, Base, Linea but LST has never set foot on these lands.

🔹 In the near future, @LyveFinance will serve as a bridge to bring LSTs from Ethereum to @Lineabuild. Over time, it will gradually expand to other L2s. This expansion will enable more diverse uses of LST beyond its primary focus on @Ethereum.

🔹 In addition, it can also take advantage of $ETH scattered in different chains, helping to strengthen network security and at the same time lay a solid foundation for the next Defi summer.

🔹 What sets Lyve apart from other LST Liquidity protocols is: [1] Cross-Chain Fluidity with LayerZero ▫️ The project uses POFT (Proxy Ominichain Fungible Token) solution from LayerZero to bridge existing LSD tokens to Linea to ensure adequate security and reliability.

POFT contract is like $WETH – is a simple, immutable wrap of original token, with no other functions beyond the wrap. ▫️ With LayerZero technology implementation, liquidity will consolidate between chains and can be effortlessly moved to help ensure smooth protocol operation.

3⃣ Tokenomics [1] Token metrics ▫️ Lyve implements the VeTokenomics model to operate the token economy. There are 3 types of tokens used in the Lyve ecosystem:

➡️ $LYVE: Protocol utility token $LYVE's role is to promote liquidity through the distribution of farming rewards with $esLYVE. In addition, $LYVE also plays a role in platform governance by locking $LYVE into $vLYVE.

➡️ $vLYVE: $veLYVE holders can vote for gauges and earn 80% revenues and 100% bribes for associated vault. $vLYVE holders receive: Trading fees generated by pool(s) they vote for Bribes deposited for pools they vote for Weekly vLYVE distribution (rebase)

➡️ $esLYVE: $esLYVE is a Boosting credit for farming. It can be vested into $LYVE linearly over 7 days or can boost your farming efficient, up to a maximum of 1.5 times. If you want to boost: When your $esLYVE/total $esLYVE ratio > your farm position, you receive 1.5 boost.x

If you want vest to $LYVE: You can withdraw your $esLYVE in $LYVE form after 7 days linear vesting, and to vest your esLYVE, you must own a corresponding amount of LYVE. For example, If you have 100 $esLYVE, you can choose to vest all and it will no longer boost coefficient.

▫️ However, Lyve has made improvements to the ve(3,3) model: ➡️ Provide additional incentives for loyal LPs to encourage LPs to provide liquidity for a longer term, making the liquidity of the protocol more stable and thereby achieving more consistent protocol revenue.

After users stake LSD assets, they will receive a loyalty coefficient. This coefficient starts at a default value of 1 and has a maximum of 1.5. When user pass one month, coefficient will equal 1.5, meaning that the longer the stake time, the more rewards the user will receive.

➡️ $esLYVE offers vested farm incentives to reduce selling pressure from farm rewards. $esLYVE also can be used to boost farm rewards, making users more willing to hold $esLYVE long-term to gain more steady, long-term returns.

Farm rewards will be distributed in the form of 60% $LYVE and 40% $esLYVE. This mechanism overall encourages farm users to participate in the protocol for a longer term, rather than selling and leaving immediately after receiving rewards.

➡️ The lock-up period for veLYVE is more user-friendly. Avoid creating the feeling of holding capital for too long for users. In traditional ve(3,3) model, maximum lock-up time of 4 years while max lock-up time of Lyve is only 4 months.

➡️ This is the operating model of LYVE

[2] Token distribution

4⃣ Audit 🔹 To ensure security for the project, Lyve Finance has cooperated with Solid Proof to audit the contract protocol. github.com/solidproof/projects/tree/main/2023/Lyve%20Finance

🔹 In addition, the project has also doxed with Linea and Lyve's information has been listed on Linea's official website: linea.build/apps 🔹 Choosing Linea-doxxed protocols may not help you avoid losses, but surely you will not face rugpull, LP withdrawal, honeypot,...

5⃣ Roadmap 🔹 In the near future, Lyve aims to complete the $LYVE public sale and deploy the protocol to Linea. Next 3 months, the goal is to continue to develop more functions and expand to more L2s.

6⃣ Some thoughts 🔹 Lyve will help further enhance the capital efficiency of assets through cross-chain LST. Imagine Lyve taking advantage of all the $ETH on the current 29 L2s mainnet?

🔹 However, this also poses a risk as cross-chain bridges are the most attacked in 2022. This will be overcome when Lyve uses Layerzero's cross-chain tech. Helps ensure the safety of users' assets when transacting across the chain, regardless of what the core tech of L2s is.

🔹 Lyve is also the first liquidity layer for LST on Linea. When the Linea ecosystem exploded, LSDfi projects on Linea were born and built on top of Lyve. All of these projects will have to pay a portion of fees to Lyve. That's insane.

Lyve Finance

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