GM Digest #65
Gm with Valuable Alphas / Insights — Make Sure to DYOR. All of This is Not Financial Advice. Ape at Your Own Peril
plsARB & plsRDNT at 9m% APY
• @PlutusDAO_io mistakenly distributed significantly more rewards to plsARB & plsRDNT. This resulted in 15 users being able to claim highly inflated PLS rewards for a short period of time
• No other tokens or funds were at risk apart from one month’s worth of PLS emissions directed at plsARB and plsRDNT and whatever PLS rewards had not been claimed from the previous month
• Plutus will be buying back 220,215 PLS on the open market, amounting to the number of tokens that were claimed due to the incorrect exchange rate
• The team will also be posting a more detailed post-mortem, which will include the exact steps they intend to take going forward to minimize errors like this
Thoughts: The Plutus team had a great momentum trying to recover from the plsARB situation — Team was pushing for $ARB inflation request for comment and pushed for $75m Arbitrum Incentives budget, communicating with key decision makers on Arbitrum to make it happen. While this particular mistake is being remedied with Plutus buying back the $PLS token, the reputational damage has already been done
CVI Pre-Deployment Live on zkSync
• @official_CVI started its pre-deployment phase, launching on zkSync as the second chain after Arbitrum
• Users on zkSync can only stake $GOVI token or mint the special zkCVI NFT for now. $GOVI can be used as a gas token and the NFT is designed to promote the use of Account Abstraction additional use case will be revealed in the future
• CVI or Crypto Volatility Index is a decentralized benchmark for cryptocurrency volatility information. The index was created by the COTI team that has partnered with Prof. Dan Galai, the creator of the original VIX, in order to create a “market fear index” for the crypto market
• The index tracks the 30-day implied volatility of Bitcoin and Ethereum. The index ranges between 0 and 200 and is produced based on a Black-Scholes option pricing model, which computes the implied volatility of cryptocurrency option prices together with analyzing the market’s expectation of future volatility
• Users are able to spot or leverage trade Volatility Tokens to speculate or hedge against volatility in the market. Liquidity providers can provide liquidity to Volatility Tokens via Theta Vault — receiving yields from DEX swap fees, mint/burn fees, time decay fees from volatility token owners and P&L from CVI index decrement as counterparty to the volatility tokens long position
Thoughts: First time seeing this product (despite me just noticing that their token has been around since 2021), the latest developments from the team have introduced up to 16x in leverage, introducing UCVI which enhances the volatility by 3x, reduced funding rate which makes it easier for users trade & stay in positions, and opening & closing positions in real-time. Gonna try this protocol out before the next macro volatility event.
Lybra v2, $250m TVL Gone?
• @DeFi_Made_Here has pointed out that @LybraFinance v2 may not be successful due to the fact that over $250m TVL is gone when you look at TVL before & after migration. eUSD supply also shrank from $176m to $68m
• Could there be TVL unaccounted for due to the migration? Current TVL of $152m coincides between Defillama and Lybra website
• $LBR token has been declining 50% for the past 30 days, currently trading at $0.79 from $1.6 at the end of August
Thoughts: Some of the reasons could be that a few whales have moved their capital to farm for Eigen Layer instead. Migration hasn’t been completed via exchanges and there’s news of a liquid fund (that blew up) that deposited their capital into Lybra. Unsure how much of the TVL migration from exchanges is gonna contribute, so far it doesn’t look good for Lybra
Lootverse x LayerZero
• @lootproject is now the latest NFT integrated with LayerZero’s Omnichain Non Fungible Token (ONFT) standard
• Loot gained popularity for their potential use in various applications, including gaming and virtual worlds. Some of the games that Loot NFT can be used in LootVerse, Gabby World, LLC Tycoon
• Loot has captured the imagination of NFT fans, developers, and investors with its bottom-up approach, it's up to the community to decide their value and how to use them
ConvergenceFi IBO
• @Convergence_fi has raised $230k in initial bond offering — Participants were able to buy $CVG at a discount with their $FRAX, $CRV and $CVX
• Convergence is a Convex-like layer that accumulates governance rights over protocols while optimizing the underlying yield
Fee Change on crvUSD Pool
• There is currently a vote to change the crvUSD/USDC pool’s fee back to 1 bps from 2 bps
• This proposal was after the experiment which shows that 1 bps fee for the crvUSD/USDT pool leads to higher volume and returns than 2 bps
Linear Finance Post Exploit
• On 21st September, @LinearFinance suffered an exploit where an infinite amount of ℓAAVE was minted and were swapped for LUSD and dumped on PancakeSwap which sent LUSD to 0
• Linear team is working with authorities to locate the individual. The team is also working with exchanges to freeze assets associated with the exploit
• The team has proposed 4 plans to move forward — Will mention only two plans here since the community is voting on the first two
⇢ Permanently disable all current liquid assets and release all staked $LINA back to the community. Effectively writes down debt for all users with negative profit | Requires 5-7 days to execute
⇢ Full restoration making use of Upgradable Smart Contracts, all lost funds will be recovered, and the original state will be reinstated | Requires 3-5 weeks
• The proposal has gone up on SnapShot, 58% has voted for the first option while 36% has voted for the second option. The vote will end at about 2pm UTC today (Sep 24)
Thoughts: It’s nearing the end of this vote and the most probable outcome is the first option. Psychologically, Linear users must be feeling devasted from the exploit and would want the fastest way to recover their money which would be the first option.
Top 3 Most Exciting News This Week
• @TheHedgehog_io & @alkimiya_io allow users to speculate & hedge gas fees
• @GammaSwapLabs went live on Arbitrum, users can now have access to impermanent gainz
• @Vaultkaofficial has announced the first Leverage Vault on GMX v2 GM Pools
Great Weekend Read
• Levy Solidly Deep Dive Part 1 & Part 2
• How Uniswap v3 Mimic Call & Short Options
• How to Create Perpetual Options in Uniswap v3
• Oracle-less Protocols & TimeSwap
*Reminder to Size Your Entry for Degen Plays and Take Your Principal Out (Take Profits) Whenever You Hit Your Target*