Blast TVL has quickly risen to ~$2.5B in just a few days after mainnet. The Blast Big Bang competition incentivized developers to provide the One of the winners? Infinity Pools. Infinity Pools is no new project; they’ve been around for a while…
We first covered Infinity Pools back in September of last year.
Now, the protocol is deploying on the Blast L2, after recently undergoing an audit on March 1st with mainnet incoming. Infinity Pools functions as a decentralized exchange with inherent perps capabilities. The protocols key selling points are:
No leverage limits
No liquidations
No oracle risk
No counter-parties
Stay alert in the markets ⬇️
Background on Infinity Pools
InfinityPools is a decentralized exchange that can offer trading for any asset with unlimited leverage, no counterparty risk, and no risk of liquidation. Similar to Uniswap’s breakthrough, InfinityPools stands out because it offers an unparalleled improvement over anything currently available in both the TradFi and DeFi realms.
Key Takeaways
By leveraging primitives and building on first principles, InfinityPools achieves multiple 10x improvements over what’s already possible in both TradFi and Web2.0.
InfinityPools enables unlimited leverage on any asset, zero counterparty risk, and no liquidations. It’ll also have some of the best liquidity in DeFi from day 1 because traders can enter and exit their trades using DEX aggregators. This represents a significant improvement with the potential to reshape leveraged asset trading and the design of unprecedented structured products.
InfinityPools benefits both liquidity providers (LPs) and traders by offering LPs the opportunity to earn premiums for lending out their liquidity pool tokens, in addition to traditional trading fees, while enabling traders to access leverage and trade a wide range of assets in a decentralized and secure manner.
InfinityPools offers unique advantages with its closed system and lack of risks from oracles or liquidations, but it faces challenges in terms of capital requirements and competitive fee control.
The opportunities for building on top of InfinityPools are extensive, including permissionless asset listing, composability, yield tokens, interest rate swaps, foreign currency stablecoins, and more flexible structured product vaults.
DeFi Evolution and a Cycle of Pseudo-Innovation
Over the past years, the DeFi (Decentralized Finance) landscape has undergone significant transformation, particularly with the advent of Layer 2 scaling solutions. These innovations have addressed some of the scalability and cost issues associated with Ethereum, which had hitherto been a significant barrier to the development of complex financial derivatives in the DeFi space.
Initially, Layer 2s and other scaling solutions appeared to hold the promise of fostering a new era of innovation in DeFi, enabling the creation of structured products, options Automated Market Makers (AMMs), and perpetual futures that could not have thrived on Ethereum due to high transaction costs. There was a general sentiment that these developments could offer improved solutions over existing DeFi protocols, and even potentially rival centralized exchanges in terms of product offerings and efficiency.
However, as the market matured, it became evident that many of the new products and protocols that emerged in this period did not bring any substantial innovation to the table. Most of these were mere replications of existing financial derivatives, such as perpetual futures or options, without any meaningful improvements. Moreover, they often provided a worse user experience compared to centralized exchanges, characterized by lower leverage, wider spreads, and higher costs. This essentially meant that they could not compete effectively against established players, even after the downfall of some centralized exchange giants like FTX.
This phenomenon, where a wave of new products and protocols emerge but do not offer any real value or improvement over existing solutions, can be described as a cycle of pseudo-innovation. In such a cycle, despite the hype and high expectations, the market eventually realizes that the new offerings are essentially rehashed versions of existing products and cannot compete effectively with incumbents. This serves as a cautionary tale for investors and underscores the importance of critically evaluating new protocols and upcoming primitives.
Tune into Revelo Roundtable #4 - Restaking edition
On Thursday at 12PM EST we’ll be hosting a discussing on everything restaking, with the teams from Inception, Swell Network, Renzo, Ether.fi, and Kelp. Topics include:
Protocol value propositions & moats
Strategies for onboarding AVSs
Will Lido & Rocketpool issue LRTs?
& more…
0-to-1 Moments in DeFi
Despite the presence of cycles of pseudo-innovation, DeFi has already witnessed groundbreaking zero-to-one moments, where genuine innovations have created entirely new possibilities and fundamentally transformed the industry. Uniswap stands as a quintessential example of such a zero-to-one moment in DeFi. By offering 10x more assets and 10x faster listings than centralized exchanges, Uniswap marked a paradigm shift in the way asset exchanges are conducted.
Traditional perpetual exchanges in DeFi have struggled to compete with centralized exchanges due to inherent limitations. For instance, both AMM and order book models often fall short in providing the necessary liquidity and efficiency, and Automated Market Makers (AMMs) typically rely on price oracles that fetch prices from centralized exchanges, which somewhat undermines the decentralization aspect. Furthermore, the use of oracles and long-tail assets has often led to an increased attack surface, making them more vulnerable to manipulation and security breaches.
InfinityPools addresses these limitations by introducing a groundbreaking approach to perpetual futures trading. Unlike the traditional models, InfinityPools facilitates the trading of long-tail assets with leverage, without the need to rely on oracles. This innovation does have the potential to significantly disrupt centralized exchanges by allowing users to trade a more extensive range of assets with leverage in a decentralized and secure manner.
Notably, InfinityPools boasts five distinct 10x improvements over traditional DeFi offerings:
10x More Assets: Similar to Uniswap, InfinityPools allows for a substantially greater number of assets to be listed and traded.
10x Faster Listings: The permissionless nature ensures rapid listing of assets without the bureaucratic constraints typical in centralized exchanges.
10x More Leverage: Traders can leverage positions significantly higher than traditional platforms, with 1,000 to 5,000x leverage on crypto assets, 10,000 to 20,000x on forex pairs, and up to 100,000x on correlated or pegged assets like stablecoins.
No Liquidations: In traditional perpetual markets, capital is divided among traders, market makers, and liquidators. InfinityPools eliminates liquidation penalties, ensuring that more capital remains between traders and market makers, enhancing expected returns for traders.
No Counterparty Risk: InfinityPools doesn’t rely on oracles, and positions are settled in a predetermined, mathematically guaranteed manner, mitigating counterparty risks.
If you’re finding this information useful, you can access our full Infinity Pools Industry Intel report for FREE.
Our full 30+ page report goes over the intricacies of Infinity Pools, how its infrastructure for swappers & LPs works, & more…
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