GM, this is your Daily Bolt briefing
In this edition, we’ll be giving some background knowledge behind Retro Finance and Liquity, and why they’ll be deploying on Polygon’s zkEVM.
We’ve also included our notes from Level Finance’s recent twitter space, featuring other major perp DEXs including GMX, ApolloX, Perpetual Protocol and Vertex.
Over and out ⬇
1/ Polygon – Retro, Liquity, And Developments From The Projects
Preview: Kila, Asif, Hamzah, and Yohan discuss Retro, Liquity, and development updates from these projects. Click here to listen to the full episode (64 mins).
Read our Note (8 mins) and save 56 mins.
Here are some key takeaways:
Kila describes Retro as a friendly fork of Thena which is a ve(3,3) style DEX.
He adds that Polygon was missing a dominant ve(3,3) style DEX. Retro aims to fill this gap by providing a ve(3,3) style DEX for the Polygon ecosystem.
He also adds that Retro has learned from what has worked in other successful ve(3,3) DEXs on other chains and is happy to bring it to Polygon.
Kila confirms that Retro is looking to launch on Polygon zkEVM about 30 to 45 days after the first epoch goes live. Kila says that they want to ensure everything goes smoothly on Polygon before moving to Polygon zkEVM.
He also says that those who have NFTs or veRETRO positions on Polygon will be airdropped some on Polygon zkEVM.
Kila says that users can lock RETRO tokens and by locking $RETRO tokens, users gain veRETRO. veRETRO allows users to vote on pools to determine where emissions are directed.
He says that the decision to vote for a specific pool is based on factors such as the pool’s generated fees and bribes. Voters only receive fees and bribes from the pools they vote for, incentivizing them to support beneficial pools.
tokenbrice traces the origins of Liquity back to the early days of MakerDAO when $DAI was backed purely by $ETH collateral and had stronger censorship-resistant properties. He says that Liquity and Reflexer emerged from the disappointment with MakerDAO’s transition to Multi-Collateral DAI, with each protocol taking a different approach.
tokenbrice emphasizes that every design decision in Liquity has been optimized for resilience and censorship resistance. tokenbrice says that Liquity focuses on chains where the model aligns with what LUSD has to offer, such as resilience and censorship resistance.
He adds that while Liquity initially sat on the sidelines with Polygon, the growth of Polygon’s zkEVM changed the equation, making it a more attractive platform for LUSD.
tokenbrice also says that ve(3,3) model like Retro is good at establishing baseline liquidity for projects. This has been crucial for the success of LUSD on other networks.
tokenbrice says that Liquity prefers to support a few chains properly, ensuring that LUSD is very liquid and used as collateral on some venues, rather than spreading thinly across dozens of chains. This approach likely allows Liquity to dedicate more resources and attention to each supported chain, potentially leading to more successful and stable integrations.
tokenbrice says that despite these challenges, the main issue for LUSD has been being slightly above peg due to high demand. However, in the past two months, LUSD has been more on peg than some centralized stablecoins and other major decentralized stablecoins.
2/ Level Finance Twitter Space - DEX Chat
Preview: Patrick and Dr.LVL host Housten, Jonezee, and Valentina to discuss DEXs, scaling challenges for DEXs, and more! Click here to listen to the full episode (82 mins).
Read our Note (6 mins) and save 76 mins.
Here are some key takeaways:
The Future of Ethereum Staking and DeFi Integration
Houston explains their AMM style DEX Perpetual protocol built on top of Uniswap v3, mentioning their significant trading volume.
Valentina talks about ApolloX, a decentralized prop trading platform on the BSC, which offers two trading modes: order book futures and on-chain futures. Valentina mentions that they offer broker solutions for partners who wish to create their own prop trading platforms.
Valentina says that the bear market will persist for several more months due to a lack of capital inflow and low on-chain activity.
SJ says that as an exchange, Vertex is relatively market-agnostic. They are worried about the current slow market conditions but expect a positive impact as more trading moves from centralized to decentralized venues.
Jonezee mentions collaboration with Unibot, and despite their drawbacks, he thinks there's potential in trading through platforms like Telegram. Jonezee highlights that their focus is on improving the on-chain trading experience over capitalizing on trends and narratives.
Dr.LVL agrees with the sentiment of focusing on product development and maintaining transparency with the community during the market slowdown. He suggests using this period to form valuable partnerships.
Patrick asks about narratives that could drive the market and if there are any synergies with the protocols to capitalize on these trends.
Jonezee says that for GMX, integrating trading bots and AI elements for improving project documentation and social media support are the areas of focus.
Q&A
Q: What are the benefits of DEXs in terms of incentives and token incentives compared to centralized exchanges?
One area where DEXs may have an advantage over CEX is in terms of incentives and token incentives. This enables the reward of on-chain traders in a manner that could potentially be more effective than what centralized exchanges can provide. Monetary token incentives have a strong appeal to users and are a major driver of volume, attention, and narrative.
Q: What are the biggest challenges to DEXs scaling at present?
DEXs scaling challenges include, smooth order execution, faster on-chain trading for professionals, liquidity, price discovery, improving user experience, and balancing decentralization with compliance as traditional institutions join DeFi.
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