GM, this is your Daily Bolt briefing.
With the market bearish, there is serious demand from crypto natives to invest in or trade non-crypto assets. But whether they’re allergic to KYC, or just want to have custody over their funds, many prefer interacting with dApps over creating TradFi accounts to buy stocks or forex…
In this edition, we’ll be briefing you on Lexer Markets, a decentralized perps trading protocol that supports a wide variety of markets from NFTs to Forex, and of course crypto.
Staying up to date on important catalysts that could potentially impact a project’s price action is one of the most important functions in investing or trading. This is what our latest product, Analyst Insights, brings to the table. We give you the latest information and in-depth news on popular projects and narratives. This information can help you decide if you’re bullish or bearish, and if taking a position is even a good idea.
Read our summarized note below to hear directly from Revelo Intel Founder Nick Drakon on how our new product can help traders looking for plays across crypto.
Stay alert, stay informed⬇️
1/ blocmates - Information in Crypto, Revelo Intel and AI in DeFi
Preview: In this episode of blocmates, Grant invites Nick Drakon from Revelo Intel to discuss information channels in crypto, Revelo Intel’s product called Analyst Insights, how AI can help DeFi, and the current market situation. Click here to listen to the full episode (81 mins).
Read our Note (14 mins) and save 67 mins.
Here are some key takeaways:
Nick discusses that over the last couple of months, there has been an influx of new information sources in the cryptocurrency ecosystem.
He thinks that there are more participants such as ‘threadoors’ (someone who writes Twitter threads for informational purposes) on Twitter aiming to build their audiences with better quality information than before.
Nick believes that threadoors and other content creators don’t have to include all the information related to the projects they cover but people who consume their information should be thorough and do their own research to fully understand - they should investigate other sources as well.
He thinks that Twitter should be used as an alert or scouting system rather than a research platform.
When it comes to investing, Nick thinks that being early is important but cautions against relying solely on early signs without doing fundamental work.
Nick advises investors to spend time understanding their thesis, doing investigative work, pulling data, and validating or invalidating ideas before executing their trades. He says that professional investors spend most of their time researching ideas before putting trades on.
Nick says that he doesn’t exit his position just because the price has dropped - he exits his position if his thesis is invalidated.
Nick explains Revelo Intel’s new product called Analyst Insights.
He states that Analyst Insights are a report on a particular situation, theme, project, or chain where Revelo analysts see some positive or negative catalysts that might play out over the next 30 to 90 days.
Nick explains that after researching a topic, the Revelo team generates a thesis that they believe will be the case for the near future.
He states that they also provide information about why the thesis might not work.
Nick says that these Analyst Insights might provide actionable information or just an idea to observe.
Nick emphasizes that understanding the opposing view before taking a stance, either long or short, is very important.
DeFi Raiders - Lexer Market and Current Perpetual Markets
In this episode of DeFi Raiders, Rel3ntless invites daPanda to discuss Lexer Markets, limitations of current perpetual markets, the hybrid liquidity engine of Lexer, and more. Read our notes below to learn more.
Background
Rel3ntless (Host) - Owner of DeFi Raiders.
daPanda (Guest) - Founder and Developer at Lexer Markets.
Lexer Markets - Lexer is a decentralized perpetual trading platform supporting a wide range of markets including crypto, NFT, forex, and indices trading.
Introduction to Lexer Markets
daPanda explains that Lexer Markets is a next-generation perpetual DEX built on Arbitrum.
He states that their hybrid liquidity engine allows trading of any asset tradable on the blockchain, including crypto assets, forex assets, NFTs, arbitrary pairs, and indices.
daPanda stresses that Lexer is not a fork of any project.
He adds that all trades and LP positions are minted as ERC-721 NFTs.
Limitations of Current Perpetual Markets
daPanda believes that layer-2 solutions like Arbitrum and Optimism have opened up opportunities for different DeFi use cases like derivatives. However, there are still unsolved problems in launching derivative markets such as not offering trading pairs except cryptocurrencies.
daPanda states that some of the existing protocols can provide trading of crypto assets such as $BTC, $ETH, and stablecoins. He provides an example of GMX in which users can provide those assets into its GLP pool. The liquidity that belongs to this pool enables the trade of these assets on GMX.
However, daPanda says that these protocols cannot provide trading of other assets like commodities, forex, or arbitrary pairs.
Hybrid Liquidity Engine
daPanda states that Lexer has a long-term roadmap that includes their two crypto engines, multi-asset liquidity, and synthetic liquidity engine.
daPanda expresses that Lexer enables a synthetic engine that allows liquidity providers (LPs) to provide stablecoins as liquidity. The synthetic engine then serves as a counterparty.
He says that this engine will allow trading assets like commodities, forex, and arbitrary pairs.
daPanda says that Lexer’s multi-asset liquidity engine will allow the trade of blue-chip and long-tail assets as well.
According to daPanda, users can provide liquidity to the liquidity engine and receive protocol revenue as a reward. He believes that liquidity providers can earn promising yields from the platform.
Real-World Assets on Blockchain
daPanda believes that forex pairs will be a huge market with strong demand in the cryptocurrency ecosystem. He adds that there are users who want to speculate on forex markets but opening an account offline takes 5-7 days which discourages them to do so.
He explains that Lexer enables users to open leverage long or short positions on forex pairs.
Synthetic Liquidity Engine vs Multi-Asset Liquidity Engine
daPanda explains that synthetic liquidity engines are used for markets that don't have corresponding native assets on the blockchain. In this sense, stablecoins are used as counterparties in synthetic liquidity engines.
He states that multi-asset liquidity engine enables trading native assets like $BTC, $ETH, and $LEX.
Lexer's Oracle Network
daPanda says that Lexer uses its solution with multiple Oracle providers.
According to daPanda, there are two layers of Oracle solutions - the first layer aggregates multiple data sources from off-chain and provides trustworthy price feed.
The second layer incorporates different Oracle providers, and their price suite will be served as a fee when deviation occurs from aggregated price.
Trends in DeFi
daPanda believes that there is an uptrend in trading indices on-chain.
He also believes that many new projects are coming up like Gearbox, and Sentiment which will gain increasing the usage of DeFi.
He thinks that protocols providing copy trading and yield farming strategies will become a trend soon.
Collateralization Ratio and Liquidation Management
daPanda explains that they are developing a V2 version which will improve the collateralization ratio but V2 is currently being tested at this moment.
daPanda states that they have coded liquidation prices into user positions. He adds that once the liquidation price is hit, the liquidator will kick in and liquidate the position.
He says that there are no manual triggers for liquidations as it is all coded in.
Fees
daPanda states that 30% of program revenue will be redistributed to token holders while 7% will go to liquidity providers.
He says that this is done to provide a healthy dynamic between traders, community members, and liquidity providers.
Building a Comprehensive Trading Platform
daPanda discusses that their platform is highly composable and can be integrated with other protocols.
He says that Lexer aims to build an ecosystem around its platform to enrich the entire on-chain derivative ecosystem.
According to daPanda, the platform has a comprehensive trading engine that includes DEX aggregator protocols, copy trading protocols, insurance, and option protocols. The platform is also working with various ecosystem protocols such as yielding protocol to achieve this aim.
He says that all back-end smart contracts are open-sourced so that other protocols can integrate permissionless.
Partnerships and Security
Rel3ntless says that Lexer has an impressive list of partnerships such as RODEO Finance and Camelot.
daPanda explains that some of their partners are leveraging their tech to build things on top of Lexer’s platform. He gives an example of RODEO which uses the engine technology of Lexer to provide a better trading experience.
According to him, some protocols work closely with the liquidity engine side to develop more yielding strategies on top of $LEX.
daPanda says that security is a top priority for Lexer. He adds that the core mechanism of their smart contract has been sent for auditing.
He adds that they plan to do some educational outreach to explain their smart contract logic and to ensure a safe launch.
Importance of a Stable Business Model on Blockchain
daPanda believes that it is important to have a positive cash flow model business with real yield on the blockchain and he believes this is what Lexer is building right now.
He also adds that people are starting to recognize that having a stable 10% to 15% APY is quite good.
Positive Outlook for the Future of the Crypto Industry
daPanda believes that there are huge opportunities on the horizon for the crypto space despite some upcoming tough times.
daPanda thinks that the market cap of cryptocurrency is just like another Apple and is ready to grow more.