GM, this is your Daily Bolt briefing.
Let’s face it - providing liquidity on Uniswap V3 is unprofitable for most, not to mention time-consuming for users who have to manage price ranges and monitor impermanent loss. Demand is growing for products that abstract away the action required to maximize yields in DeFi, with Gamma being one of the projects at the forefront of this trend.
With more L2s like Mantle and Linea hitting the market, and with Ethereum’s Cancun upgrade approaching, it’s more important than ever to say on top of the latest developments around ETH rollups.
Earlier this year, Coinbase made waves when it announced its own L2, dubbed ‘Base’. Read our notes below to get a grasp on the current thought processes over at Coinbase. This information is especially relevant in light of Binance’s announcement of opBNB, a Binance L2 built on the OP stack.
Stay alert, stay informed ⬇️
1/ The Delphi Podcast - Jesse Pollak on Coinbase's Base
Preview: Tommy hosts Jesse Pollak to discuss Coinbase's on-chain journey, building Base, and more! Click here to listen to the full episode (38 mins).
Read our Note (5 mins) and save 33 mins.
Here are some key takeaways:
Tommy asks about what differentiates Base from other Layer-1s and Layer-2s. Jesse says that while they will certainly have a full financial ecosystem, he’s most excited about enabling new consumer experiences, such as music, media, gaming, food, and politics. He gives examples of businesses already building these types of experiences on Base.
Tommy comments on Base’s advantageous position of having direct or indirect access to Coinbase’s user base and TVL, asking if it’s a moat or whether other L2s can capture some of Coinbase’s centralized business. Jesse recognizes the benefits but highlights that it’s the creation of great products that will make Base succeed.
Jesse explains that their decision was the result of a thorough investigation, including a meta-analysis at the company level. They decided to build EVM on Ethereum and then on Layer-2. They recognize that Ethereum cannot support the Coinbase scale, so they decided to build on Layer-2.
Tommy asks why they didn't build directly with a ZK partner given the focus on ZK tech.
Jesse explains that the debate between Optimistic roll-ups and ZK roll-ups became irrelevant when they realized that these were simply implementation details. They started with an Optimistic prover but plan to introduce ZK provers and validity provers over time. They have already started getting proposals from teams to build a ZK prover for the stack.
Tommy asks if there is any circumstance that would make them reconsider their choice of Optimism.
Jesse highlights their long-term commitment to Optimism, pointing out how Coinbase has remained a constant presence in the industry for 12 years. They are contributing to multiple systems and processes alongside Optimism.
Tommy asks why so many L1s and L2s are switching to Optimism.
Jesse says it's because of the gravitational pull of Ethereum, which is attracting many due to its inertia, integrations, and vast support network. Additionally, the stack offers great technology, is open source, and has a reliable team and a credible story around decentralization.
2/ Retro Finance Twitter Spaces with Gamma
Preview: Kila and BP talk about Gamma Finance and Retro Finance, discuss the features of their protocols, ALMs, and more. Click here to listen to the full episode (75 mins).
Read our Note (9 mins) and save 64 mins.
Here are some key takeaways:
The Future of Ethereum Staking and DeFi Integration
BP says that Gamma is an active liquidity manager for cost trade liquidity automated market makers (AMMs). It works with various DEXs, including Uniswap and Alchemix Finance.
He adds that Gamma manages liquidity to ensure it stays within a specific range and provides optimal price tick alignment. The goal is to attract more volumes through DEX aggregators while minimizing price impact and incurring a permanent loss.
BB says that Gamma's primary focus is managing liquidity within specified ranges while actively providing around the current price tick. This approach helps lower price impact on trades and attracts more volume through DEX aggregators.
BP says that Gamma offers a unique approach to rebalancing positions within liquidity ranges. There are two common methods: swapping assets or placing limit orders.
He adds that swapping involves converting assets to maintain a desired allocation, while limit orders involve adjusting the range boundaries. When rebalancing, asset allocations may change from the original 50/50 ratio depending on market movements.
BP says that DefiEdge is similar to Gamma in terms of functionality.
He adds that Arrakis is a major competitor with a high TVL, but they have different revenue production from DEX integrations. Arrakis has strong ties with Uniswap Ventures, limiting their integration options. Arrakis focuses solely on Uniswap and charges high fees for protocol-owned liquidity management. On the other hand, DefiEdge outsources management to different parties within its team.
Retro Finance is a Thena Finance friendly fork on Polygon.
Kila says that Retro Finance will have an ALM marketplace where users can select liquidity providers and concentrated liquidity options. This marketplace aims to bring together various ALMs and expand options for users.
He adds that the amount of fees generated by an ALM determines the emissions and rewards from Retro Finance for its users. ALM which brings in more fees will be rewarded with more retro emissions.
He adds that besides providing safety, an ALM marketplace provides various benefits. The integration with Merkl allows users to claim earned fees directly on the front end.
If you read these 2 Notes on Revelo Intel you would have saved: 1 hour and 37 mins!