GM, this is your Daily Bolt briefing.
In this edition, we’re providing you with recent reports from our notes covering two important topics in DeFi:
Learn about Infinity Pools, a DEX offering unlimited leverage on any asset, with no liquidations, no counterparty risk & no oracles.
Read up on how GMX V2 plans on using low-latency Chainlink oracles to improve protocol performance.
Over and out ⬇️
1/ Flywheel DeFi - Introduction to Infinity Pools
Preview: DeFi Dave, kiet, and Matthieu introduce Infinity Pools, how LPs and traders use the protocol and integration with other AMMs. Click here to listen to the full episode (114 mins).
Read our Note (11 mins) and save 103 mins.
Here are some key takeaways:
Infinity Pools is a DEX that offers unlimited leverage on any asset, with no liquidations, no counterparty risk & no oracles.
Matthieu says that the protocol uses a unique mathematical model to calculate interest rates. This model takes into account factors such as the utilization rate of assets (i.e., the proportion of assets that are currently being borrowed) and the volatility of the underlying assets.
He says that Infinity Pools aims to offer more efficient and flexible borrowing and lending options compared to existing DeFi protocols. For instance, it allows users to take out loans with a much smaller amount of collateral meaning higher leverage potentially up to 10,000-20,000x. The protocol is designed to be highly scalable and gas-efficient, making it more accessible and cost-effective for users.
Matthieu says that Infinity Pools can interact with any AMM that has a concentrated liquidity element. This means that it can take liquidity from any other AMM, not just Uniswap or SushiSwap, for example. He says that this is a significant feature as it allows Infinity Pools to tap into the liquidity of various DeFi protocols.
Matthieu thinks that all perpetual futures today have insane amounts of counterparty risk, which is why they have insurance funds. Infinity Pools eliminate counterparty risk by settling all positions in a mathematically guaranteed way. Using oracles introduces too many exploits and vulnerabilities, making it impossible for protocols to call themselves "primitives".
Matthieu says that liquidity providers (LPs) can provide liquidity directly through the protocol or lend out their Uniswap LP tokens.
He says that higher yield occurs because LPs can lend liquidity to leverage traders and LPs can earn yields through their liquidity even when it is out of range. These are reasons why it is attractive to provide liquidity on Infinity Pools.
Matthieu says that Infinity Pools uses 1inch to execute all orders. This ensures that traders get the best slippage in the entire spot market. He adds that liquidity in native pools affects only the interest rate that traders pay. Slippage is always best in the spot market no matter what.
Matthieu says that traders use Infinity Pools pool to borrow assets and then do an atomic swap to enter into a long or short position.
2/ Chainlink - GMX on New Low-Latency Chainlink Oracles
Preview: Johann hosts coinflipcanada to discuss the Integration of Chainlink Oracle into GMX V2 and more! Click here to listen to the full episode (38 mins).
Read our Note (6 mins) and save 32 mins.
Here are some key takeaways:
Johann talks about the recent proposal for the integration of Chainlink Oracle into GMX V2. He asks coinflipcanada to share his views on the potential impact of this proposal on the GMX community and protocol.
Coinflipcanada says he is happy about GMX's strong community support for the proposal, showing how the GMX community has grown. He thinks the proposal is an important step for the protocol's development, making it more resilient. By working with Chainlink, the protocol can benefit from the knowledge of top experts in crypto oracle management.
Johann discusses their efforts to decentralize the Oracle layer, which started around the same time as the rise of DeFi, and the need for reliable price data in the DeFi space.
Johann highlights the importance of decentralizing and ensuring the security of derivative protocols so they can compete with traditional finance in the future.
Coinflipcanada talks about how Chainlink and Oracles play a special role in giving price data and the increasing demand for this data as blockchain systems grow.
Coinflipcanada mentions the potential benefits of using more detailed and diverse data, like volatility measures, to create more efficient and robust systems. He expects more efficient pricing and a more robust system overall with the upcoming V2 release and the continued collaboration with Chainlink.
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