Last month we launched Revelo Ventures which is a syndicate for investing in early-stage private crypto deals. The syndicate has just under 100 members and we completed 3 deals in March for a total of $583,000 invested.
We plan on doing 2-3 deals a month moving forward. Members are not required to do every deal and can pick & choose those that appeal to them.
We just opened the doors of the syndicate to expand membership to 200 participants before closing it again.
Membership is be gated via a NFT which you can mint right now at:
https://ventures.revelointel.com/
The group is almost full so if you are interested move quickly to secure your spot.
If you want to participate in these early-stage private rounds and can invest a minimum of $3,000 to $5,000 per deal, then you should consider joining us in this lucrative asset class.
Now to today’s newsletter - Let’s dive into Vest Exchange.
Vest is a perps DEX aiming for maximum capital efficiency, backed by Jane Street. The protocol is currently in ‘Phase 0’; users need a ref code to access its services. This is soon set to change, as the protocol enters Phase 1…
Something to be aware of with Vest is its use of ZK proofs, and their collaboration with zkSync. The perps DEX is built on zkSync and benefits from the scalability and other features of the rollup. Despite being in a closed beta-esque state, the protocol has release racked up ~$2.8M in TVL and counting, likely soon to increase with the launch of Phase 1, as well as the ‘Vest Quest’ initiative.
Stay alert in the markets ⬇
Background on Vest Exchange
Vest is a perps DEX, allowing users to trade numerous assets against $USDC. Alternatively, LPs can deposit $USDC to earn a yield that is appropriately aligned with their risk. The protocols main goals that it aims to aspire to are Capital Efficiency, Robustness (ensure solvency & safety), Trustlessness (exchange variables are transparent & verifiable), and Fairness (reduce redundant fees, and compensate traders & LPs alike appropriately). The word “vest” means ‘to confer or bestow (power, authority, property, etc.) on someone.’ Vest aims to bestow more power to perps traders, giving them access to what the protocol deems is a better trading experience.
Users can access the “fairest pricing” on a variety of assets, including long-tail and illiquid tokens. Fees and returns alike are paid relative to the risk a trader or LP takes on. There is 0 price impact and 0 slippage when trading. In addition, there are no caps on Open Interest (OI), and there are also no fees charged for trades that reduce OI imbalances. Fees are dynamically adjusted based on the risk a trader creates, which of course, can vary. All of these measures help to align user incentives with protocol health.
The mechanisms Vest uses aim to alleviate a common pain point among perps DEXs, which often don’t properly account for risk. The DEX is looking to provide ‘capital efficiency without insolvency’ as it can be hard for projects to balance both maximal use of deposits and safety at the same time. The projects novel zkRisk engine is the key to achieving this, and more (more on this below).
Although the protocol has not yet launch to the public, the teams internal simulations have predicted an APR for LPs “well into the triple digits”, which is obviously pretty lofty. What’s more is that this figure is thought to be PnL agnostic, so it is not purely dependent on certain market conditions for this number to be achieved.
Another note-worthy point is that Vest Exchange is backed by Jane Street (among other notable investors). This holds a lot of weight, as the company is one of the premier market makers in the world across all markets, not just crypto. Other top institutions in Vest’s corner include QCP Capital and Big Brain Holdings, which are crypto-native organizations. Having the backing of these sorts of large intsitutions is important, and an edge also recognized by other perps protocols like Mangrove, a perps protocol on Blast backed by Wintermute, and IntentX, a Mantle based perps platform which raised from the likes of Selini Capital and more.
zkRisk: Vest x zkSync
Besides being built on top of zkSync, Vest also uses zkRisk, a quantitative risk engine. Used for pricing and accounting for risk, this helps to create to create a safer LP experience, and maximize capital efficiency, among other things.
zkRisk plays a pivotal role in Vest, as it also will help the team expand their tech stack to build an ecosystem of composable DeFi products beyond just the current perps platform. These products, which aim to be onchain, trustless versions of all primitives present in TradFi, will have cross-margin enabled between each other. This aligns with the team and the advisors present at Vest, many of who have backgrounds in TradFi themselves.
Some examples of future products that could utilize zkRisk include perps positions being used in DeFi as options trading, composable limit orders, collateral for lending (a possibility we also discussed in yesterdays edition), collateral for derivatives actively being lent out for yield (similar to Aevo’s $aeUSD), and more. The high baseline APR for depositors brings new possibilities to the table as well, for example, long/short delta strategies that would potentially allow a high yield to be earned while maintaining exposure to certain assets. The team is actively thinking about and tinkering with a variety of possible structured products in this realm.
zkRisk calculates risk offchain, which is then submitted to an onchain ZK proof verifier. The process used allows for higher risk assets to be listed and higher risk positions to be takes without subjecting LPs to disproportionate risk. This also makes Vest the first perps DEX to operate their offchain computations in this transparent manner.
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