GM Digest #90
Gm with Valuable Alphas / Insights — Make Sure to DYOR. All of This is Not Financial Advice. Ape at Your Own Peril
Rysk: Atomic Credit Spreads
• @ryskfinance introduces atomic credit spreads which solve the issue of substantial collateral required to write and sell options
• A credit spread is an options strategy involving selling and buying options contracts with different strike prices but the same expiration date. Goal is to receive a net premium upfront by selling expensive option & buying cheaper one
• On Rysk, traders can open a credit spread atomically in a single transaction. This is achieved with a very efficient collateral requirement, eliminating the need for liquidation and reducing execution risk
Thoughts: Given the reduced execution risk & efficient collateral requirement, Rysk made it pretty attractive to perform credit spreads strategy on Rysk. Bear in mind that the maximum profit is limited and obtained right at the time of deployment. Thus, along with limited credit spread option risk, the profit potential is also limited
The risk/reward ratio is skewed in favor of credit spread option risk. Since markets are unpredictable, it may also go against the anticipation of the trader. If the asset’s price goes beyond the credit range, loss may be high
QiDao Tokenomics Upgrade
• @QiDaoProtocol moves from single locked QI to a 80/20 QI-ETH LP on @Balancer
• Users can now lock their QI-ETH LP for advanced voting escrowed QI — aveQI to boost their voting power over QiDao as well as their share of weekly revenue distributions from the DAO. The minimum locking period will be 28 days and the maximum will be 4 years
• Every two weeks, 50% of accumulated revenue from all chains is used to incentivized QI-ETH’s gauge on Balancer. veBAL holders that vote for QI-ETH will receive token rewards from QiDao’s revenue. After Balancer’s biweekly gauge ends, QI-ETH’s votes will result in BAL rewards being allotted to QI-ETH. Only users that lock QI-ETH in aveQI will be eligible for BAL rewards. If the ROI on voting markets is less than 1x, meaning voting incentives exceed expected BAL incentives, then revenue is distributed directly by QiDao to aveQI lockers
• Liquid lockers by Beefy and Tetu will be migrated without any user action needed
Thoughts: More protocols utilizing Balancer 80/20 LP lock. Personally a fan of 80/20 due to the positive impact that it has on building up liquidity for the LP while aligning the incentives of token holders & the protocols without excessive impermanent loss
CoW Swap Gasless Approvals
• Starting today, @CoWSwap traders can approve tokens gasslessly, with a signed message, in the same flow as their swap
• Users can now do an entire swap, even for a new token, without spending a gwei in ETH, or even holding any ETH in their wallet at all
• Essentially, a function creates a signature that can call approvals directly on behalf of the owner. This allows a third party, such as a solver, to spend funds on behalf of the user.
Thoughts: This makes it so much more efficient & seamless for users to execute transactions without paying for gas. Would not be surprised if we start seeing more protocol integration with CowSwap to leverage the gasless capability
Helix Introduces Pre-Launch Futures
• @HelixApp_ is a decentralized order-book derivatives exchange built on the @Injective_ L1
• Helix has introduced pre-launch futures, allowing the trading of tokens before their official launch. This would allow users to trade tokens on Helix’s perp markets before a token launches
• The Helix team will release $TIA as its first pre launch token market
Superposition Negative Fees
• On Uniswap, users need to pay 0.15% fees for trades. On @Superpositionso, users get paid rewards for trading (in the form of utility mining)
• Superposition is Layer-3 DeFi infrastructure on Arbitrum. In the first iteration as a fee-less Automated Market Maker (AMM)
• Superposition will focus on incentive structures and steering order flow → Traders pay ‘negative fees’ on Superposition. In other words, you are rewarded for using the platform
• LPs earn the highest rewards in the space, even while they are automatically hedged against impermanent loss and loss-vs-rebalancing
• Utility mining is an evolved version of liquidity mining. Here, governance tokens are not just thrown at non-sticky users. Rewards are distributed in a targeted manner to the users who display intended behaviors within a protocol
Thoughts: Imagine a unified interface where protocols can access on the L3, DEX with utility mining token pairs — every trade you make, every transfer you do, you generate rewards that negates the fees that you pay. Can’t wait to try this out. The team behind Superposition is Fluidity Money which is project that introduces Utility Mining and work with other Defi projects to create more value out of Utility Mining wrapper tokens
Balancer: Elliptical Concentrated Liquidity
• @GyroStable leverages @Balancer to create a unique Elliptical Concentrated Liquidity AMM
• E-CLPs follow the curve of an ellipse, offering flexibility in liquidity distribution. On the passive LP side, the pool deployer takes on the responsibility of calibrating and establishing the trading parameters upon launch, offering a simplistic stable swap pool UX with the efficiency of Uni V3
• LST E-CLPs are plugged into the correct ratios, optimized, and require no rebalancing. E-CLP can also offer stablecoin peg protection, calibrated to focalize liquidity around off-peg stablecoins, with the ellipse orientated towards the desired area of trade
Thoughts: Can’t share thoughts on whether this is better than other AMMs, but cool to see
Movement x BenQi
• @movementlabsxyz announces their strategic partnership between Movement Labs and @BenqiFinance. Movement Labs is a leading liquid staking while Benqi is a algorithmic liquidity market protocol on Avalanche
• This partnership aims to enhance and expand the liquidity of the M1 ecosystem. M1 is a L1 by Movement Labs providing the highest possible TPS through Move
• Key Partnership Features:
→ Benqi will be implementing incentive structures to encourage the growth of sAVAX liquidity on M1
→ Benqi will be providing AVAX stakes for subnet validators with the support of Ignite to enhance security and performance metrics
→ M1 users will gain seamless access to a range of integrated DeFi protocols on BENQI, opening avenues for diversified earning and lending opportunities
BSX Testnet Announcement
• @bsx_labs is a CLOB DEX built on Base that will offer both spot and perpetual products
• Their goal is to combine the best elements of CEXs and TradFi and bring them on-chain. They have created a unified marketplace that bundles and matches all bids and offers, and offer a range of features typically found on CEXs, including portfolio margin, cross-margin, one-click trading, and gasless transactions
• If you want to participate in the testnet you need to sign up, but be warned they have stated that there will be no incentives for participants
Clip Finance Public Beta
• @ClipFinance is an automated cross-chain yield optimizer and performance monitoring protocol
• The protocol public beta goes live on Oct 19 and will offer one-click stablecoin yield strategy utilizing DEXes and bridges like @BreederDodo, @StargateFinance, and @Biswap_Dex
• What makes this yield optimizer different is the use of gamified mechanics and an interesting take on tokenomics.
• First, they have an NFT collection that allows you to boost your yield by participating in timed events called 'Yield Wars'. Additionally 10% of $CLIP token supply will be airdropped to NFT minters
• Second, $CLIP token rewards are unlocked only when the protocol reaches certain TVL milestones. This includes team and investor tokens as well. In other words, $CLIP emissions are not time-based. This is an interesting concept because it means there will be no new token emissions if the protocol isn't growing
Swaap Live on Monad
• @SwaapFinance is a Request-for-Quote (RFQ) market-making protocol currently live on Ethereum, Polygon, and now Monad. It provides LPs with optimized yield strategies
• The process works like this: On-chain, users can deposit their assets into the SwaapV2 Vaults. Off-chain, the quotation process takes place, and advanced market-making strategies are deployed
• Swaap V2 advantages over traditional AMMs include external price feeds (from CEXs) which helps significantly reduce toxic flow. And the use of stochastic models for market making, which tend to outperform the constant product formula commonly used by AMMs
Misc News
• @jotsdotsocial opens waitlist applications
• @ElixirProtocol raises $7.5M led by @hack_vc, at a $100M valuation
• @CantoPublic announces bridging of $cNOTE tokens to Ethereum using @LayerZero_Labs
• @coinbase introduces perpetual futures market
• X account tied to rapper Nelly compromised, used for crypto phishing scam
• @Hope_money_ on Ethereum got hacked with～$835K loss
• @GuessOnChain announced rev share — hold at least 0.25% of the supply, Stay tuned for random wallet snapshots throughout the week. Profits shared every Sunday
• @xLabsxyz introduces WormholeScan, a block explorer and analytics platform on the @wormholecrypto ecosystem
• @ether_fi LST live on Goerli ahead of mainnet launch
• @AaveAave DAO launches a $1M bug bounty with @immunefi
• @Aptos_Network has been down for ~5 hours and nobody bats an eye
*Reminder to Size Your Entry for Degen Plays and Take Your Principal Out (Take Profits) Whenever You Hit Your Target*