GM, this is your Daily Bolt briefing.
In this weekend edition, we’ll be informing you on the latest in Arbitrum DeFi. From GMX to Y2k Finance, Pendle, and other protocols, read on to learn more about what the top Arbitrum projects are working on and what trends they see in DeFi.
Stay Vigilant.⬇️
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In this Arbitrum Twitter Spaces, eli_defi from Arbitrum invites IronBoots from Camelot, Joey from Bond Protocol, Jonezee and Tano from GMX, Joe from Cryptex Finance, Dan from Pendle, and bumzy from Y2K Finance to discuss the Arbitrum ecosystem, DeFi projects on Arbitrum, the current situation of DeFi, and possible improvements. Read our notes below to learn more.
Background
eli_defi (Host) - Community Lead at the Arbitrum Foundation
IronBoots (Guest) - Building and growing at Camelot
Joey (Guest) - BD, Partnership, and Strategy at Bond Protocol
Jonezee and Tano (Guests) - Contributors at GMX
Joe (Guest) - Co-Founder of Cryptex Finance
Dan (Guest) - Growth at Pendle
bumzy (Guest) - Contributor at Y2K Finance
Camelot - a decentralized exchange built on Arbitrum.
Bond Protocol - a protocol providing Bonds-as-a-Service to meet the needs of DeFi with innovative ideas.
Pendle - a permissionless DeFi yield-trading protocol where users can execute various yield management strategies.
Y2K Finance - a protocol that allows hedging or speculating on the risk of pegged assets.
GMX - leading perpetual and spot DEX on Arbitrum and Avalanche.
Cryptex Finance - a multi-network DeFi protocol that provides crypto and NFT users easy access to fully-decentralized index tokens.
Arbitrum - a layer-2 solution designed to improve the capabilities of Ethereum smart contracts.
Introduction to the Protocols
IronBoots explains that Camelot is a decentralized exchange (DEX) built on Arbitrum with a special focus on the ecosystem and long-term sustainability of the protocol
Joey states that Bond Protocol is a pioneer in bonds-as-a-service DeFi bonds, which spun off from Olympus Pro with new developments and improvements being made to the protocol. He thinks that Arbitrum gives Bond Protocol the opportunity to work with top protocols such as Camelot, Pendle, Y2K, and GMX for bond issuances.
Joey explains that Bond Protocol provides a variety of options to support other protocols including protocol and liquidity treasury diversification, and strategic asset acquisition whereby issuers who are crypto projects and treasuries can raise and own ERC-20 assets instead of renting through auction-invested tokens and open marketplaces.
He thinks that raising funds through offering bonds is a much more community-aligned, open, and DeFi-native way to raise compared to raising funds through venture capital or selling governance tokens through OTC deals.
Joey says that Bond Protocol’s philosophy is that owning assets outright is a better method of capital preservation than renting.
Joneeze and Tano introduce GMX as a decentralized exchange that has been live on Arbitrum and Avalanche for over a year. They mention that GMX is launching GMX V2 soon with many updates.
Joe says that Cryptex is building a cutting-edge perpetual protocol on top of Arbtirum to create new markets to trade.
He states that they are developing Cryptex V2 which will include index tokens with the help of their partners Chainlink and Perennial. Joe adds that they are building Cryptex on top of Perennial’s infrastructure.
Dan states that Pendle is a yield tokenization and yield trading protocol that aims to bring the trillion-dollar interest rate derivative industry to DeFi.
bumzy explains that Y2K Finance offers binary options markets that allow people to underwrite or hedge the risk in the market. He states that Y2K focuses on stablecoins and pegged assets at this moment.
bumzy thinks that crypto markets have seen high volatility this year and Y2K allows users to capitalize on this volatility.
He also states that Y2K V2 will be launching in the next weeks.
What Works Well in DeFi?
eli_defi asks participants how they feel about building in DeFi despite the significant changes in the market.
Tano says that DeFi protocols offer transparency on everything happening on-chain, which is important for users' decision-making process. He believes it became more important after several centralized companies like FTX collapsed.
Tano states that projects have started to make sure that they have enough reserves and aim to prove that on-chain.
bumzy thinks that sustainable yield is something that DeFi has been trending towards. Revenue-generating models are being developed instead of relying purely on inflationary tokens with no utility.
bumzy also says that real yield became a trend in DeFi which projects can no longer ignore.
Joe thinks that innovation within the space, specifically with protocols built on Arbitrum, is one of the coolest things about DeFi.
IronBoots think that although the macro picture is bearish at this point, the TVL and the number of projects built on Arbitrum continue to increase.
He also thinks that this shows that even if the general condition of the market is bearish, high-quality products can claim a significant share of the market.
Joey states that DeFi has shown resilience in bear markets. He believes that opportunities for yield generation still exist through various platforms giving the example of Y2K that allow investors to hedge the risk after on $USDC de-peg.
Joey explains that protocols like Bond Protocol can help raise capital for projects regardless of the market.
bumzy thinks that strong builders on Arbitrum are going after the actual needs of users and innovating.
bumzy states that good composability allows for permissionless building using oracles not necessarily created by Y2K.
bumzy says that the Y2K team sees a rise in the popularity of stablecoins. He also adds that stablecoin trends show that users are starting to have more trust back on-chain rather than off-chain which can be seen in the growth of new stablecoins.
Areas for Improvement in DeFi
Dan states that UI/UX is a problem in both DeFi and traditional finance. He believes that bad UI/UX discourages people to interact with those protocols.
Dan says that DeFi has improved the UI/UX significantly but more changes in UI/UX could be done.
Dan explains that Pendle tries to solve this problem by offering two UIs, both for professional and simple UI for users with specific needs and interests.
Dan states that for DeFi to scale, it needs a significant upgrade on UI/UX so it’s easier to use.
Dan believes that designing a UX interface that is easy to use is critical to onboard millions of people into DeFi.
Jonezee says that moving from centralized exchanges to DEXs or DeFi in general makes managing funds more complicated, requiring responsible practices to keep funds safe.
Jonezee adds that simplifying on-ramps and off-ramps and bridges is critical for improving security.
IronBoots thinks that everything, from decentralization to tokenomics can be improved, which presents opportunities for builders.
IronBoots thinks that improving UX and security is a must for DeFi, making it the responsibility of builders to improve them.
Joey finds that education is key since it's difficult to get a newbie to be moderately educated in DeFi.
Joey thinks that some of the projects like GMX and Camelot made great improvements on their UI/UX so it is quite easy for new users to use and use those protocols. He says that Bond Protocol wants to make their onboarding experience easy for bond issuers.
Funding Options
Joey thinks that VC markets have dried up, making funding more difficult.
He believes that Bond Protocol is well positioned to help drive the value of protocols and help people survive through the bear market.
Opportunities for Exploration in DeFi
IronBoots thinks that there are many new frontiers to explore in DeFi that protocols should choose to focus on. For this reason, builders must be strategic about what they decide to build.
He thinks that concentrated liquidity in DeFi is still early, it has not proven itself yet.
He states that composability is a unique feature of DeFi that allows protocols to build on top of each other like Lego blocks.
IronBoots says that Pendle's example for composability is very bullish.
According to IronBoots, having multiple protocols building on top of each other creates net compounding gains that are hard to catch up with.
He believes that the number of good-quality protocols that can build on top of each other is what makes Arbitrum the most promising chain.
Dan thinks that building on top of other protocols in DeFi happens faster than in any other industry.
He believes that this composability will cause the hyper-evolution of DeFi and lead to the start of a huge growth explosion.
bumzy believes that DeFi gives users many options, such as the ability to speculate and bet on the de-pegging of stablecoins; speculators can use Y2K to bet on this de-pegging to hedge or to profit.
bumzy states that covering areas like bridge exploits, and slashed stakes are a big opportunity going forward in the future.
Joey says that with all of the innovation in DeFi, Arbitrum has become the chain where users can get any service they need. He thinks that this makes it easier than ever for projects on Arbitrum to partner with other protocols.
Exploring Arbitrum
Joe says that for builders, Arbitrum offers a unique community that is one of the best and brightest in crypto.
Joe thinks that the community and users on Arbitrum are what separates it from other chains. Arbitrum does a tremendous job of advancing the ecosystem they're developing.
Joey states that the culture at Arbitrum is bottom-up, community-driven, with a deep focus on partnerships and all projects built on Arbitrum embody this philosophy.
Joey thinks that there's no better place in DeFi than Arbitrum in crypto to learn about different facets of DeFi.
Jonezee says that last year, users were exploring other layer-1s to see what was available on each chain. However, he says that with such a breadth of projects and protocols offered by Arbitrum, there's no real reason to leave Arbitrum anymore.
Jonezee says that Arbitrum has become a self-sufficient ecosystem with new protocols building on top of each other.
He believes that there is a lot to do in terms of providing deep liquidity to the chain but also improving the governance of the chain.
Catalysts to Trigger the New DeFi Summer
Tano believes that GMX V2 will trigger the next DeFi boom.
He believes that the composability of GMX V2 will trigger other protocols to build on top of GMX.
IronBoots thinks that every exciting DeFi project in crypto aims to launch on Arbitrum or to migrate to Arbitrum.
He says that no other chain can hype the builders as much as Arbitrum does.
According to IronBoots, there are great products built on Arbitrum such as GMX, Pendle, Rodeo, and others. He thinks that when markets turn bullish, these protocols will benefit.
Lesson Learned by Builders
Joey suggests that if necessary, builders shouldn’t be afraid of switching or pivoting from their ideas.
He also suggests that builders should rely on other builders and partners to draw inspiration and get advice on building their protocol.
IronBoots suggest that projects don't need to spend money on influencers. He believes that it is enough if they have a product that people want to use with clear docs.
He also says that builders should have a high conviction of what they build.
Alphas from Projects
Joey explains that Bond Protocol will launch Sequential Dutch Auctions (SDAs) beyond Dutch auctions. He says that this will give Bond Protocol a complete portfolio to support raises for projects of any stage for a variety of different use cases such as Protocol-Owned Liquidity (POL).
Dan says that Pendle will offer more pools to increase liquidity. He also says that more assets will be listed on Pendle from Camelot.
IronBoots says that the team at Camelot is working on Farm V3, and also will list Rodeo Finance and Penpie Finance soon.
Joe says that they will launch Cryptex V2 built on Arbitrum which provides new assets such as an index of the total crypto market.
Tano says that GMX V2 will offset new untouched markets like forex and commodities apart from cryptocurrencies.
Tano says that fees on GMX V2 will be reduced for both spot and perpetual markets.
He also adds that there will be new pools in addition to the GLP pool.
According to Tano, GMX will also partner with Chainlink for low-latency Oracle.
bumzy explains that Y2K Finance is focusing on developing UI/UX.
bumzy states that Y2K Finance will give users the ability to automatically roll their positions] and participate in the next vault.
He says that they are also adding a 24/7 deposit queue.
According to bumzy, Y2K Finance will also have different Oracles.
bumzy says that there will be a new fee imposed on Y2K that will be a revenue stream for the protocol and holders.
Important Links
aiPX is the official sponsor of the Daily Bolt by Revelo Intel
In a post-FTX world, securely trading with leverage and earning real yield in a decentralized manner has never been more important.
aiPX offers cutting-edge risk management for liquidity providers, leverage trading, and a suite of products between perpetuals, binary options, and synthetics.
Earn passive yield and trade with leverage straight from your wallet.
Take the step, join aiPX.