🧑‍🌾 50mn $ARB in @arbitrum ecosystem incentives is coming! 🧑‍🌾

@arbitrum ‘s Short-Term Incentives Proposal (STIP) has received 36 drafts (requests for comments) so far, and I’ve summarised ‘em for you.

As an $ARB holder, I’d very much like to know where more tokens are going to… https://twitter.com/i/web/status/1706726947978723820 

@arbitrum Link to sheets:
https://docs.google.com/spreadsheets/d/1uoQmoHLanAhjTH9Vv1Shn-XZoUIHP8PVMTcao6DIoT4/edit?usp=sharing

0xTrablo’s writeup on STIP!
Gotta say he gives a better explanation of the actual distribution.
https://twitter.com/0xTrablo/status/1705126337772659010

Feel free to update me if you’ve changed the draft / any information in the sheet in inaccurate!

Some chads and… https://twitter.com/i/web/status/1706727093957279785

Arbitrum Short Term Incentive Proposal (SITP)

🤔 Autocompounders are useful, but (when) should you actually use them? 🤔

Autocompounders/vaults alleviate the hassle of actively managing your positions, be it selling farm rewards, rebalancing, leverage loops, etc. Some examples include @beefyfinance @autofarmnetwork.

Let’s… https://twitter.com/i/web/status/1704387731013652667 

@beefyfinance @autofarmnetwork My previous writeup on Beefy and how it unlocks value for the general DeFi space:
https://x.com/archipelabro/status/1693563624265265188

Some chads and frens:
@TaikiMaeda2
@HFAresearch
@eli5_defi
@DAdvisoor
@DegenCamp
@thedailydegenhq
@rektdiomedes
@crypto_linn
@2lambro
@0xMughal
@0xSalazar
@ViktorDefi… https://twitter.com/i/web/status/1704387891089363395

When to autocompound

Is GambleFi that huge or is it just a fugazi people use to pump their bags?

@thalesmarket's positioning as an infra opens up the horizon for the longer-term whilst getting some share of the existing market!

A quick primer on Thales and my candid thoughts on GambleFi. (1/17)

This thread will be split into 2 parts:

1️⃣ What is @thalesmarket? [3-9]
2️⃣ Personal thoughts [10-14]

1️⃣ What is @thalesmarket?

Thales is building DeFi's infra for parimutuel markets.

Parimutuel betting (i.e., pool betting) is when bets are pooled together and the funds (less house fees) are shared across all winners.

Unlike fixed-odds betting (e.g., roulette), the odds in a parimutuel market changes as more bets are placed -- allowing the 'market' to price in the odds.

Horse racing bets typically run on this model.

A great explainer on parimutuel mkt and Thales' mechanics by @Defi0xJeff.

https://twitter.com/Defi0xJeff/status/1698682433795920240

Being an infra, given oracle support and clearly-defined (and supported) conditions, betting markets for about any conditions can be set up!

Products built on top of Thales:

1️⃣ Positional markets
> Will an asset go above or below X in a week?

2️⃣ Ranged markets
> Will an asset be within or outside a price range in a week?

3️⃣ @OvertimeMarkets (sportsbetting market)
> Will X win against Y?
>> By how much?
- Sportsbook positional market
- Multiple layers of bets in a match
- Allows parlay (chained betting)

4️⃣ Speeds market (their latest product line)
> Will an asset be above or below the current price tomorrow?
- Shorter duration positional markets (and X replaced with current price); or as per @Defi0xJeff , "Positional markets on steroids"
- Essentially, binary options

Binary options is banned across multiple jurisdictions due to the shady operations of many brokers (e.g., inciting gambling, blackboxed price feeds, unlicensed, etc.).

DeFi's the solution.
- Removing trust dependencies (besides oracle, which is provable)
- Democratises access

For crypto markets, the odds are priced in using Black Scholes, price skew and other price/IV-related formulas, on top of the market's demand for the position.

LPs are restricted to $THALES stakers.

2️⃣ Personal thoughts

GambleFi has no doubt found PMF within the crypto-native/DeFi crowd. Gambling is a degen's daily bread.

However, it is a stretch to say that it will onboard non-natives. It takes more than just the dApps; it requires a friendly onboarding process.

Most of the friction is still in the wallet and on- and off-ramp sides. Although there have been many efforts and upcoming features (enabled by AA, MPC, etc.), we have yet to find a solution that will not scare off outsiders.

GameFi was able to take off despite all of this because, prior to the P2E model, there was no such lucrative (and 'easy', be it sustainable/not) way for gamers to make money.

As a result, people were willing to overcome the hurdles.

This is not the case in the traditional gambling scene, where the perceived benefits of GambleFi are more nuanced.

Not to mention the already established channels in the traditional gambling space.

All things considered, @thalesmarket's positioning as an infrastructure is a smart play.

Its products are currently meeting the needs of existing natives, and they can easily scale to meet the needs of newcomers once onboarding friction has been removed.

Refs
https://docs.thalesmarket.io/thales-parimutuel-markets/parimutuel-markets-introduction

Thales' Dune dashboards
https://dune.com/leifu/Thales-Key-Metrics-(OE)
https://dune.com/leifu/thales-speed-markets-overview
https://dune.com/leifu/overtime-sports-market

Thanks for your support frens ❤️
@eli5_defi
@defi_mochi
@DAdvisoor
@DegenCamp
@thedailydegenhq
@rektdiomedes
@crypto_linn
@2lambro
@0xMughal
@0xSalazar
@ViktorDefi
@0xPragmatism
@jediblocmates
@Grantblocmates
@0x42069x
@arndxt_xo
@Defi0xJeff
@Cryptotrissy

Thales: DeFi's Infra for Parimutuel markets

💰 $plsARB is backed 1:1 by $ARB, yet trading at a 65% discount! 💰

If you’ve converted your $ARB into $plsARB, you’re probably unhappy at the price action.

If you didn’t convert, you can bank on a huge discount opportunity.

Some strategies you can play around with to maximise… https://twitter.com/i/web/status/1698623326577721713 

Link to sheets:
https://docs.google.com/spreadsheets/d/1Lf3QOOdJm-3tAiwQQR2KOUM1PgE5ajlz2b9xVDPD6BQ/edit?usp=sharing

More resources on @PlutusDAO_io and $plsARB:
https://twitter.com/PlutusDAO_io/status/1694726055926571071

https://twitter.com/archipelabro/status/1586900776445624320

Some chads and frens:
@dcfgod
@TaikiMaeda2
@luca_bws_d2
@HFAresearch
@eli5_defi
@defi_mochi
@DAdvisoor
@DegenCamp
@thedailydegenhq
@rektdiomedes… https://twitter.com/i/web/status/1698623551971197264

$plsARB Discount

Banking on LSTs as their growth catalyst. @pendle_fi's set to be DeFi's next blue-chip.

Their recent product expansion, Pendle Earn, opens the gate to mass adoption. WAGMI!

A 🧵 on Pendle, its Earn product, and the bull case (1/16)!

This thread will be split into 4 parts:

1️⃣ What is @pendle_fi [3]
2️⃣ Pendle's traction [4-5]
3️⃣ What is Pendle Earn [6-7]
4️⃣ Why it matters to you [8-9]
5️⃣ Personal thoughts [10-12]

1️⃣ What is @pendle_fi?

Pendle is building an infra for yield tokenisation and trading. It allows you to trade on the yield component of yield-bearing assets (e.g., LSTs, GLP, etc.).

Probably the best writeup on Pendle out there, by @eli5_defi.

https://twitter.com/eli5_defi/status/1668318107910406144

2️⃣ Traction

They've captured the LST narrative really well, proving PMF. And they're aiming even bigger with their Earn product!

Rome wasn't built in a day, huge props to them! 👏

Growth has been parabolic since then, some notable ones:

- Chain expansions (Ethereum, @arbitrum, @BNBCHAIN, @optimismFND, @0xMantle)
- Listing on @binance's innovation zone; $PENDLE trading
- Invested by @BinanceLabs
- RWA expansion @spark_protocol @FluxDeFi
- Integratiooons

https://twitter.com/BinanceLabs/status/1694333672738979868

3️⃣ What is Pendle Earn

If you're not familiar, top CEXes have Earn products, where users can deposit their assets and earn yields in a click. Yield sources varies (e.g., subsidies, native staking, premium for writing options, undisclosed, generic DeFi).

Pendle's tapping in!

Repurposed.

'Buy assets at a discount' ➡  'Earn yields simply'.
'Simple/Pro'  ➡ 'Earn/Trade'.

In Earn, YT's abstracted, emphasising on fixed yield through PT / boosted yields through LP-ing.

Positioning itself as the go-to yield source for CEXes and other platforms.
Huge.

3️⃣ Why it matters to you

TAM is expanded, volume will go up, fees will go up.
$PENDLE holders happy. 💸📈

As a trader, specifically yield trader. Deeper liquidity will give you better trades. Imbalanced deposits (high PT buy pressure) will open up arbitrage opportunities.

For DeFi, external capital flowing into DeFi is real bullish.

And to protocols, integrating with @pendle_fi unlocks huge liq and innovation potential.

Us over at @TimeswapLabs has enabled PT-GLP (and prev. PT-wsthETH) as collateral due to our oracleless design.

https://twitter.com/pendle_fi/status/1689860969869258753

4️⃣ Personal thoughts

Simple yet impactful rebranding. CEXes can simply 'dropship' yields into DeFi.

Pendle is the benchmark for many protocols (incl. us) in terms of their comprehensive docs, seamless UX with a proper level of (optional) abstraction, amazing GTM.

Moat building through integrations:
- Collateral utility via @TimeswapLabs @Dolomite_io
- Governance aggregators @Equilibriafi @Penpiexyz_io
- @okx Earn integration

Some sexy Friend.tech stuff teased by @gabavineb.

https://twitter.com/gabavineb/status/1693341347380625862

IMO, DeFi at our current state won't make it to the masses at all.

Levels of abstractions are necessary.

DeFi's better off being the infra layer for finance (at least FinTech). Our over-transparent nature will scare off retail users but is a blessing for integrations.

Again, their docs are one of the best in the space:
https://docs.pendle.finance/Home
https://app.pendle.finance/trade/education/learn
https://handbook.pendle.finance/

Thanks for your support frens ❤️
@eli5_defi
@defi_mochi
@DAdvisoor
@DegenCamp
@thedailydegenhq
@rektdiomedes
@crypto_linn
@2lambro
@0xMughal
@0xSalazar
@ViktorDefi
@0xPragmatism
@jediblocmates
@Grantblocmates
@0x42069x
@arndxt_xo
@Only1temmy

(Some of the) chads behind @pendle_fi:
@DDangleDan
@imkenchia
@ayobuenavista
@Dill_Farmer
@gabavineb

Can't seem to find the accounts of others', hehe. 😘

On Pendle's Earn Expansion

@beefyfinance 's well positioned for the next bull run!

Even now, they're bringing immense value that can unlock a $15bn locked market!

A 🧵 on how overlooked the benefits of Beefy are! (1/14)!

This thread will be split into 4 parts:

1️⃣ What is @beefyfinance [3-4]
2️⃣ Traction [5]
3️⃣ Why it matters to you [6-9]
4️⃣ Personal thoughts [10-11]

1️⃣ What is @beefyfinance

Pretty straightforward -- they're building vaults to simplify your LP/farming/accumulating experience!

Some of their active (auto-compounding) vaults include:
1. DEX/Bridge LP
2. Leveraged lending
3. Single-sided staking
4. GLP
5. veTokens

Protocols incentivise users who conducts useful activity (e.g., LP-ing in DEXes, lending/borrowing in money markets, staking, etc.).

Auto-compounding is a no-brainer move in most cases, tho fees involved might eat up your gains.

By pooling deposits, fees become negligible.

2️⃣ Traction

They had $1.2bn TVL at peak and are currently sitting on a fat $175mn stack!

Also, they're live on about every other chain.

The decline's in-line with the overall DeFi ecosystem's.

DEX LP auto-compounding vaults drive majority of their TVL.

3️⃣ Why it matters to you

Certain vaults charge deposit and withdrawal fees. These fees accrue to $BIFI holders through BIFI Earnings Pools, all while still enabling governance power.

If you're a user farming DEX rewards (esp. for medium-longer term),  Beefy's the way to go!

Now to protocol's, @beefyfinance 's really helpful for you!

E.g., using mooTokens (i.e., vault receipts) as collateral in a money market solves the hassle of reward management. Users also get the benefit of an interest-bearing asset.

Opening up a $15bn market 👀.

https://twitter.com/archipelabro/status/1691026900070879234

To protocols integrated in Beefy's underlying vaults, your incentives are being put to use, properly!

They sell your tokens for more liquidity to your protocol, aligned with your goal (as compared to giving straight to users and them dumping w/o adding more liquidity).

You can further utilise this by boosting your Beefy vaults.

Users then have to stake their mooTokens to receive the additional incentives!

4️⃣ Personal thoughts

It's a given bull market's a fan of Beefy, lots of retails (who prefers simplicity) and incentives (which needs to be auto-compounded).

Hyperbolic real soon!

Being the liquidity hub (and interface) also opens up lots of room for product expansion.

https://twitter.com/rektdiomedes/status/1691361582314401793

Beefy's DD process and insurance (@InsurAce_io @NexusMutual) integrations are also in-place to ease your mind!

https://docs.beefy.finance/safu-protocol/beefy-safu-practices

Thanks for your support frens ❤️
@eli5_defi
@defi_mochi
@DAdvisoor
@DegenCamp
@thedailydegenhq
@rektdiomedes
@crypto_linn
@2lambro
@0xMughal
@0xSalazar
@ViktorDefi
@0xPragmatism
@jediblocmates
@Grantblocmates
@0x42069x
@arndxt_xo

Chads behind @beefyfinance:

@w3soBeefy @thebeefycow @kexleyBeefy @frondoto1 @dotpablocom @yr2150T @beefy_manz @beefypulse @eren_beefy @Dieter_Design @__ePete @ReflectiveChimp @Zapmore3 @iamjackgale @sirb_beefy @GPMSL @DefiDebauchery @Rajvirss  @mjoaris @BeefyGear @PowerBeefy

Why Beefy Matters

At least $15bn or 33% of DeFi's TVL is trapped.

They say composability promotes capital efficiency.
But existing infra does not support max composability, or have we?

A 🧵 on where we are and how we can unlock them (1/21)!

This thread will be split into 5 parts:

1️⃣ Background [3-5]
2️⃣ The problem [6-9]
3️⃣ Existing and potential solutions [10-14]
4️⃣ Why it matters to you [15-16]
5️⃣ Personal thoughts [17-18]

1️⃣ Background

DEXes have always been a liquidity hotspot in DeFi, consistently ranking among the top 3 categories.

During the bull market, DEXes even held the first place.

Liquidity in DEXes is derived from LPs—users who provide liquidity to a DEX (AMM) to facilitate trading, in exchange for fees (and are given LP tokens as receipts).

Composability refers to the ability to use these receipt tokens on other platforms to create new instruments.

At the 'simplest' level, using these receipts as collateral boosts capital efficiency because the same dollar can be used multiple times.

In the scope of this thread, let's use their (long-term) collateral utility as a proxy for composability.

2️⃣ The problem

How easy is accepting LP tokens as collateral? It's hard.

The typical DeFi lending markets operates on shared-pools, oracles and liquidations to monitor the protocol's and lenders' health/exposure.

To qualify as collateral in the typical lending market, an asset must have:

1. Oracle support (to monitor real-time value)
2. Deep liquidity (to account for liquidations)
3. Proper parameterisation (to balance the protocol's exposure to assets with different risk profiles)

When LP tokens are liquidated, it's redeemed to the underlying asset, which is then sold (now to a pool with less liquidity). This would spark liquidation cascades.

Not a scalable and safe design.

Not to mention LP tokens' lack of oracle support. It can't scale.

Expanding on it, he issues of enabling LP tokens as collateral are:

Market:
- Liquidity requirements
- Cyclical liquidation

Asset:
- Pricing issue
- Counterparty risk (exposure to underlying asset)
- Incompatibility with shared model
- Farming rewards support
- V3 design

3️⃣ Existing and potential solutions

With all the above, it doesn't mean that LP tokens cannot be used as collateral at all.

For example, @fraxfinance @SiloFinance @MIM_Spell has accepted several LP tokens as collateral.

Either through isolation or parameterisation (risky).

LP tokens with deep liquidity and pricing support can easily be supported. Though this returns only a few eligible ones (typically Curve stable pools).

Here is the list of deepest LP pairs: about half of them are stable-pairs.

Auto-compounders solve the hassle of farm rewards. Props to @beefyfinance @tetu_io.

Better yet, native ERC-4626 LP tokens do wonders. @AuraFinance

V3 LPs are a tad more tricky, but can be 'solved' through the use of ALM providers, such as @GammaStrategies @ArrakisFinance .

The above solutions: deep and stable pairs, auto-compounders and ALMs can be used in tandem, to expand the asset support.

Now the bottleneck is on the LP token's liquidity due to the cyclical liquidation issue.

Note: LYFs exist, though they merely serve leverage loops.

What if there's a lending market that runs on neither oracles nor liquidations?

Used with the above solutions, the possibilities are now limitless.

Well, that's exactly what we're building over at @TimeswapLabs.

https://twitter.com/0xMughal/status/1672295197299085313

4️⃣ Why it matters to you

Recycled liquidity fosters faster growth (but also faster downturns).

This also means less emissions are required as the opportunity cost of LP-ing is lower, and leverage loops can be used to bootstrap liquidity.

Increased degeneracy.

As an ecosystem, this is real 🐂!

For teams and long-term holders, you can unlock capital on your long-term holdings!

5️⃣ Personal thoughts

Markets with isolated pools are necessary to silo the contagion risks of assets with very different risk profiles. Security over efficiency, right?

Semi-isolated models work too, and will definitely be on my watchlist.

Creating an infrastructure that offers collateral utility is crucial, even if not all assets require it.

The above applies not only to DEX LP tokens but also to other receipt tokens (e.g., GM of @GMX_IO V2, LLP of @Level__Finance,
etc.).

Imajin ser, imajin.

Chads who might be interested:

@CurveCap
@TaikiMaeda2
@0xShinChannn
@0xFinish
@DeFi_Cheetah
@WinterSoldierxz
@poopmandefi
@0xTindorr
@Slappjakke
@Louround_
@TheDefiDog
@Defi0xJeff
@thisistheshawn
@CryptoShiro_
@DefiIgnas
@misaflips
@0xFlips

Receipt Tokens as Collateral

@y2kfinance has asserted its position as DeFi's go-to stablecoin depeg market.

But that's just the start; they're building something even bigger than that.

A thread on Y2K's limitless possibilities and why it matters to you (1/16) 🧵

This thread will be split into 4 parts:

1️⃣ What is @y2kfinance? [3-5]
2️⃣ Traction [6-7]
3️⃣ Why it matters to you [8-10]
4️⃣ Personal thoughts [11-12]

1️⃣ What is @y2kfinance?

Y2K is building a financial suite surrounding catastrophe bonds (CAT) for DeFi users.

"CAT allow investors to bet on the likelihood of a natural disaster and companies to protect themselves from the financial losses of a disaster."

Simply said, Y2K is a prediction market for crypto's black swan events.

Users can 'bet' whether an event (e.g., USDT depeg) will happen or not given a date and receive payouts or not based on the agreed conditions.

Although they have an initial emphasis on depeg events, the options are limitless.

Prices (and payouts) are fully market-driven, based on the deposits on either side of the bet.

If you're looking for a deeper dive, here's a really great thread by @0xShinChannn!

https://twitter.com/0xShinChannn/status/1632368918328414213

2️⃣ Traction

To date, they have done $134mn in volume across 31 markets.

They support major stables. Additionally, there is a market for @GainsNetwork_io's trader PnL and $CRV.

With the recent depegging of $MIM and $MAI, Y2K highlights the market's need for such a product.

To date, USDC is the most hedged and USDT is the most risky asset.

Due to the generally low likelihood of a depeg occurring, deposits are skewed towards riskier assets.

A simple reference by @pt1mfv_:
Hedge = yay depeg
Risk = nay depeg

https://twitter.com/pt1mfv_/status/1643365947884064769

3️⃣ Why it matters to you

As Y2K solidifies itself as the go-to CAT market, volume turnover means more fees for $Y2K holders.

And you know what that means, 💸📈!

Here's an article by @caZUBelli showing how you can make the most money off Y2K. 🤯
https://mirror.xyz/0x565D380416a2889b817C6Eb493f6DeeF029212Aa/I7I6XvJSRGO7uTjeqiFX7Xwa66Q7YoIunIRkhBpub2o

To users, the amount of risk you're exposed to when interacting with a dApp is often overlooked.

SC risks, asset risks, counterparty risks (for some) and just losing in this PvP.

Stables ain't as stable as it's intended, so save the headache.

To protocols, Y2K has an Earthquake Builder program that allows you to natively offer peg protection to your users. A clever B2B2C product.
https://y2k-finance.gitbook.io/y2k-finance/products/earthquake-builder-program

They also integrated @Balancer 's ve8020, a model worth looking for your protocol's governance, read more here!

https://twitter.com/archipelabro/status/1686678273122770944

4️⃣ Personal thoughts

Their design allows the spinning up of any insurance market given proper oracles and conditions. I see even more markets coming. 👀

Though they have an excellent GTM: depegs.

Also, props to them for great trendjacking: gDAI PnL and CRV. 👏

They got a big addressable market, and a team that clearly knows how to capture attention in DeFi.

Not to mention being incubated by @neworderDAO.

Say what you want but I'm 🐂!

Refs
https://y2k-finance.gitbook.io/

@0xMughal on Y2K's latest
https://twitter.com/0xMughal/status/1633844114600132610
https://twitter.com/0xMughal/status/1683847033634045957

@blocmatesdotcom on errthing Y2K
https://blocmates.com/blogmates/y2k-finance-doomsday-is-near/

@pt1mfv_ on Y2K's earthquake
https://twitter.com/pt1mfv_/status/1643365935104012291

@caZUBelli Y2K's mech deep dive https://twitter.com/caZUBelli/status/1630168684600631297

Chads who might be interested:
@neworderDAO
@Y2K_Intern
@0xBumzy
@Crypwalk_240
@cheguevara_0x
@badquant1
@ArbiAlpha
@0xsurferboy
@0xcarnation
@DefiIgnas
@JiraiyaReal
@CurveCap
@arndxt_xo
@GrowWithPassive

Y2K Finance: Building a Financial Suite for DeFi

What is @Balancer's ve8020 and why should you care?

Builders, investors and degens...
here's your ultimate guide to #ve8020.

Will your $BAL bags == 💰? (1/20) 🧵

This thread will be split into 4 parts:

1️⃣ @Balancer, ve8020, and what they are trying to solve [3-7]
2️⃣ Traction [8-11]
3️⃣ Why it matters to you [12-13]
4️⃣ Personal thoughts [14-16]

1️⃣ @Balancer, ve8020, and what they are trying to solve.

Balancer is an OG DEX that can support up to 8 tokens and custom weights in a pool, unlike the usual 50/50 split between 2 assets.

8020 refers to Balancer's LP tokens (BPTs) that consist of 80% token A and 20% token B.

ve8020 is the usage of 8020 BPTs (80% project's token and 20% base asset) as the staking mechanism for governance in a project.

The typical mechanism is single-sided staking the project's token, and some have begun integrating V2 LPs (e.g., UniV2, SushiV2, etc.) too.

The benefit of accepting LP tokens over single-sided staking is that the project does not need to spend as much on incentives to bootstrap their DEX liquidity.

Moreover, stakers earn trading fees while staking their LP tokens.

All good, right? Well, not exactly.

LP stakers are exposed to impermanent loss (IL).

More often than not, trading fees alone cannot compensate for IL.

80/20 BPTs reduce IL as it's not an even split -- stakers get more exposure to the project's token, which is in line with what stakers want.

The ve8020 initiative is a movement by @Balancer to incorporate ve8020 into the project's default governance system.

Two birds, one stone: governance and liquidity in one go.

8020 is ideal for building a long-term base liquidity.

2️⃣ Traction

Here's a list of protocols with ve8020 integrated:
@Balancer, lol
@RDNTCapital
@y2kfinance
@paraswap
@AlchemixFi
@unsheth_xyz
@OATHFoundation
@ArchimedesFi
@Timeless_Fi

Not the whole list, and I'm sure the list won't stop expanding.

Notable ones being @Balancer and @RDNTCapital.

They're proven cases that ve8020 works to build deep ass liquidity.

@Balancer 's veBAL

On Ethereum, their ve8020 mechanism has amassed $190mn in DEX liquidity.

Some more interesting stats:
https://dune.com/balancerlabs/veBAL

IL > Fees by 15% (since inception).

Stats:
https://app.apy.vision/pools/balancerv2_eth-BAL-WETH-pool-0x5c6ee304399dbdb9c8ef030ab642b10820db8f56

@RDNTCapital 's dLP stakers

On Arbitrum alone, their ve8020 mechanism has amassed $50mn in DEX liquidity.

Fees > IL by 2% (since inception).

The recent hype around $RDNT really helps in driving more buy pressure (thus fees).

Stats:
https://app.apy.vision/pools/balancerv2_arbitrum-RDNT-WETH-pool-0x32df62dc3aed2cd6224193052ce665dc18165841

3️⃣ Why it matters to you

As ve8020 gets adapted, fewer emissions will be needed for the typical project to function. Increasing sustainability (at least smoler Ponzi).

This also means that Balancer's TVL and volume will pump. Driving profits to veBAL (and BAL) bagholders.

To protocols, ve8020 is worth exploring over single-sided staking.

Migration might cause sell pressure on your token.

Balancer offers a launchpad for integration: https://snapshot.org/#/balancer.eth/proposal/0x3708b9fcb085bccc6ebb9e9708c6e45528a85b22483da9bbdcc0b606103429fb

If your pool qualifies as a core pool, fees will be recycled as voting incentives!

4️⃣ Personal thoughts

For governance, ve8020 >> ve5050.

For liquidity, 5050 (and V3) >> ve8020.

Just thinking out loud, but what about a model that has caps on the ve8020 and allows single-sided staking too?

The RNDT/WETH UniV3 pool is doing 5x more volume despite having only 4% of the liquidity (as per Jul 28).

This doesn't stop the fact that a deep V2-based pool is necessary for any pair (esp. volatile ones) to ensure an even spread of liquidity.

Another great thing about ve8020 is the decrease in overall emissions (thus dilution), which wasn't accounted for in the IL vs fees comparison.

If projects with ve8020 develops receipts for their governance, it's gonna be even crazier. Imagine ve8020 as collateral. 🤫

Resources:

https://balancer.notion.site/The-8020-Initiative-999c0a6e1f774e39b02f26b11c581714
https://medium.com/balancer-protocol/the-8020-initiative-64a7a6cab976
https://twitter.com/Balancer/status/1681319972994453506
https://twitter.com/Cryptovoxam/status/1678584931826679808

Thanks for your support frens ❤️
@eli5_defi
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Understanding @Balancer's ve8020: A Comprehensive Guide

What is @TimeswapLabs V2 (Nebula) and how is it better than how good you think it is?

A  🧵 providing all you need to know about @TimeswapLabs (incl. what is v1, v2 updates, my thoughts, why it matters, alfafas).

A follow up on AIP-8.

Diving in! (1/38)

The thread will consist of 4 segments:

A. Introduction: What is @TimeswapLabs V1 [3 - 10]

B. V2 updates [11 - 24]

C. My thoughts [25 - 31]

D. Why it matters to you [32 - 33]

A. Introduction

Here's my initial primer on @TimeswapLabs V1 (AIP-8) to get you up to speed.

An TL;DR in the following tweets (until 10/).

https://twitter.com/archipelabro/status/1589799881106857984

A market-driven oracle-free non-liquidatable permissionless fixed-term lending market.

Lol, you should probably just read my V1 primer.

But if you're still too lazy, go on...

Imagine @AaveAave ,
but all loans (lending and borrowing) have fixed-maturities instead of variable terms.

The collateral and debt value pre-maturity does not matter, it only matters on the settlement date.

i.e., active position monitoring is not needed

Now, liquidations are redundant.

Borrowers have to repay their loans pre-expiry to claim their collaterals.

Upon expiry, no repayments means default -- locked collaterals will be passed on to the lenders and LPs.

Oracle-less and non-liquidatable loans achieved.

In essence, @Uniswap determines prices by calculating how much change an order would deviate the ratio of the pool's contents from its target (constant).

Apply the same logic, in a lending market.

Market-driven rates.

@TimeswapLabs determines interest rates and collateral ratios by calculating how much change an order would deviate the ratio of the pool's contents from its target (constant).

Arbs make rates on-par.

Like Uniswap, Timeswap enables permissionless pools.

There you go.

A
- market-driven (by using an AMM model)
- oracle-free (by removing position mgnt.)
- non-liquidatable (by removing position mgnt.)
- permissionless (by reducing centralized dependencies)
- fixed-term
lending market, that works!

Three main participants: borrowers, lenders, LPs.

Borrowers posts a collateral to open a debt position.

Lenders provide capital and expects yield.

LPs provides both collateral and capital tokens and earns trading fees (they lend and borrow at the same time).

B. V2 updates

Here are the major changes:
- Flexible exit from positions
- Utilization of repaid capital
- Bidirectional pools
- Always overcollateralized positions
- Intro. of transition price
- Single-sided liquidity
- Reduced complexity of native tokens
- Updated "AMM"

Flexible exit from positions

In V1:
Lenders and LPs' positions are only closed upon maturity

Now:
Everyone can withdraw early -- lenders pay a fee, LPs get reduced yields

What this means:
Increased flexibility --> improved UX and more fees for "committers" (earn exit fees)

Utilization of repaid capital

In V1:
Repaid capital remains idle

In V2:
Repaid loans are added back to the pool

What this means:
Higher capital utilization -> increased capital efficiency and lower borrowing interests

Bidirectional pools

In V1:
$USDC-$ETH and $ETH-$USDC two separate pools

In V2:
Pools are combined into $USDC <> $ETH

What this means:
Unified liquidity --> increased capital efficiency and less slippage

Always overcollateralized positions

In V1:
Collateral ratio (CDP) of a pool can go below 100% due to slippage, and relies on arbs to bring back market rate

In V2:
CDP of a pool is designed to a minimum of 100%

What this means:
Less LP risk, and less value absorbed by arbs

Intro. of transition price

In V1:
Borrowers/lenders could customize their position's CDP/APR

In V2:
CDP/APR customizability removed.

Fixed-term lending is comparable to options, transition price is comparable to strike prices (the expected price at maturity).

(cont.)

(cont.)

A pool's CDP/APR will be calculated by the disparity between the transition ("desired") price and spot (based on existing pool) price.

(cont.)

(cont.)

What this means:
Increased user optionality and simplified UX --> users can enter a pool that best fits their risk-reward profile (based on transition price) --> better-served users!

Single-sided liquidity

In V1:
LPs have to provide both collateral and asset tokens

In V2:
LPs have the option to provide liquidity for one side of the pool

What this means:
Increased LP optionality --> higher capital utilization and increased capital efficiency

Reduced complexity of native tokens

In V1:
There were 6 different (ERC20/721) "receipt" tokens

In V2:
There are now only 3 (ERC1155) "receipt" tokens, each representing different participants

(cont.)

(cont.)

What this means:
Enables the development of flexible exits and reduced code complexity (thus gas efficiency)

https://twitter.com/archipelabro/status/1589799917337600000

Updated "AMM" and mechanism

In V1:
X*Y*Z = K

In V2:
(X+Y)*Z = K
Where X = CCT Token 1, Y = CCT Token 2, Z = BT per second

What this means:
A whole new mechanism for Timeswap V2

(will probably dive deeper in a future thread 👀)

https://twitter.com/archipelabro/status/1589799895111593984

V2 updates summary.

All in all, V2 updates will lead to a higher capital efficiency and improved UX.

Their words, "a 4-5x higher capital efficiency than Timeswap V1".

Traction.

V1 Alpha launched in Mar 2022.

To date, they ORGANICALLY captured:
- 6.2k users
- 48.3k txns
- US$8mn processed (lend + borrowed + LP)

Not (yet) comparable to incumbents, but shows that there are interested parties, even at such an early stage.

NB: juicy APR 🤤

C. My thoughts

Hopefully by now you fully understood @TimeswapLabs and how V2 is miles better.

I'll follow up with some of my thoughts.



1) The case for fixed-term products
2) DeFi's high opportunity cost
3) The risk of oracles

1) The case for fixed-term products

Fixed-term products are a need in an institutional-oriented market.

But the current crypto market is more retail-driven.

See perps vs options for example. Perps' popularity attests that currently, simplicity > predictability.

Ofc, perps' relative liquidity efficiency plays a part.

Currently, the market still prefers variable-rate products. (See AAVE vs e.g., Notional, Yield Protocol's absolute TVL).

Regardless, fixed-term products are a need for DeFi to expand.

2) DeFi's high opportunity cost

Related to point 1).

Yield opportunities in DeFi are too high and fast.

Do people invest in AAVE to hold their medium-to-long-term bags, or is it just a temporary parking space to enter attractive positions?

AAVE can do both.

I personally skew to the latter. But fixed-rate protocols tend to serve the former better.

Well @TimeswapLabs V2 will be able to serve both too, we'll see how the battle pans out.

3) The risk of oracles

Is it really that big? I don't think so.

For DeFi to expand, oracles are inevitable. New developments in the oracle space (e.g., ZK-powered oracles) pushes the case further.

Wicks can be solved by using WAPs.

But bear in mind, @TimeswapLabs 's proposition for oracle-less is not only safety.

I see Timeswap's non-reliance on oracles not merely as a safety feature, but to be a proper infrastructure layer -- to serve long-tail assets.

Is it that significant? @eulerfinance attests.

D. Why it matters to you

To you users, you can open lending/borrowing positions on a more predictable basis.

To you traders, you can capitalize on arb opportunities and develop more sophisticated (option-related) trading strategies.

To you investors, you can provide liquidity to pools to earn pool fees.

To the crypto ecosystem, there is a new contender in being the DeFi lending and options primitive.

V2 is live now, go test them out!

Chain expansion is on their roadmap -- Arbitrum, Ethereum and Optimism.

Better not fade this one lads!

Resources:
https://timeswap.gitbook.io/timeswap-v2-money-market/timeswap-v2/introduction
https://timeswap.medium.com/timeswap-wrapped-2022-62df923a17d3
https://twitter.com/TimeswapLabs/status/1624481609188802560
https://timeswap.medium.com/understanding-higher-yields-on-timeswap-d22102f2b548
https://blog.notional.finance/content/files/2022/06/HRI-DeFi-Fixed-Rate-Protocols-Bear-Market-Haven.pdf
https://dune.com/ameeth/Timeswap
https://dune.com/pippellia/timeswap-study


Special thanks to:
@faithoormanvin1
@krishbhatt_

Frens that brought me this far:
@eli5_defi
@defi_mochi
@DAdvisoor
@DegenCamp
@thedailydegenhq
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@crypto_linn
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@daman_n_diu

Chads who might be interested:
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