GM, this is your Daily Bolt briefing.
In today’s edition learn about how to maximize returns on Radiant Capital. Radpie is a subDAO of Radiant, allowing you to earn yield on assets without holding $RDNT, as you normally would.
We’ve also included notes on Gains Network’s latest upgrade, which aims to combat some of the inherent security risks with perps DEXs in DeFi. Other protocols, like GMX with their V2 upgrade, are also taking measures to mitigate these flaws. Read more below.
Be sure to tune in live 11AM EST to watch the first episode of The Macro Show, featuring Nick Drakon. We’ll unwrap what’s going on in the macroeconomy, and most importantly, it’s correlation and causation with crypto.
Stay alert, stay informed ⬇️
1/ The Edge Podcast - Stader's New Ethereum LST $ETHx
Preview: Isaac and grimmace talk about Radpie and Magpie, and discuss its features, dLP Rush, tokenomics, and initial offering. Click here to listen to the full episode (61 mins).
Read our Note (8 mins) and save 52 mins.
Here are some key takeaways:
Magpie is a multichain DeFi platform providing yield & veTokenomics boosting services.
Radpie is a SubDAO by Magpie that leverages Radiant Capital.
grimmace says that Magpie is like a Convex idea for Wombat Exchange. Radpie can be considered like a sub-company.
He adds that after Magpie, the team decided to explore the subDAO's mechanism and started to integrate with more protocols. Penpie is among the integrations of Magpie, built as in integration for Pendle.
He says that they recently launched Radpie which focuses on Radiant Capital. It is a different initiative within the Magpie umbrella Radpie is a sub-DAO specifically built to enhance the returns for dLP holders and provide effective governance, and access for users for Radiant's capital.
grimmace says that Radpie is an independent and running protocol, and it will have its own governance token called RDP. He also says that Radpie is a sub-DAO that is owned by Magpie.
grimmace says that on Radiant, users should deposit assets, and borrow assets, for RDNT emissions. However, in order to be eligible for RDNT emissions on Radiant, users have to lock dLP on Radiant. He adds that this might be like a blocker for users because they might not want to lock dLP for a year.
He adds that Radpie provides a place for liquid providers on Radiant Capital where users can earn RDNT emission without locking dLP on Radiant Capital.
He says that this means if users have assets such as USDC, USDT, DAI, and RDP, they can provide those tokens directly on Radpie without the need of locking dLP and can get RDNT emissions.
He adds that the second big feature is that if users are long-term RDNT holders, or they have a long belief in Radiant Capital and they have dLP, they can convert their dLP to mdLP on Radpie. This token will also earn the same revenue share as the locked dLP on the Radiant Capital platform in blue-chip tokens such as USDC, DAI, WBTC, and ETH.
The extra revenue is earned through a combination of locked dLP positions on Radpie and the liquidity provided to Radiant Capital through Radpie.
grimmace says that RDP stands for the Radpie Governance Token. After the launch, mdLP holders will also be heavily incentivized with RDP tokens.
He adds that existing Radiant Capital users can enhance their yields greatly through the combination of strategies.
2/ Deus Ex DAO – Decentralised Leveraged Trading with Gains Network
Preview: Ishan from Gains Network talks about Gains Network, the shift towards decentralized exchanges, and more! Click here to listen to the full episode (50 mins).
Read our Note (6 mins) and save 44 mins.
Here are some key takeaways:
The Future of Ethereum Staking and DeFi Integration
Ishan highlights the history of trading in the crypto world and how order books were instrumental in the beginning due to their efficiency. However, they often lacked sufficient liquidity, which is where market makers come in. He discusses the rise of AMMs and the introduction of Oracle models for high-leverage trading, which mitigates the risk of significantly moving a market.
Ishan emphasizes the issue with running an order book on-chain due to its complexity and the viability of Oracle-based trading platforms, specifically on Ethereum. He discusses the rise of these platforms due to their product-market fit, which includes a higher level of speculation through leverage trading.
Kepler says that risk management becomes more critical when leverage is introduced, as it increases risk for traders and the counterparty. He mentions the challenges of managing an order book and compares it with an AMM, where trades are taken passively.
Ishan explains the functioning of decentralized trading platforms using a single liquidity pool. He discusses the risks associated with multi-collateral liquidity pools and explains why the Gains Network uses DAI, a stablecoin. He says this mitigates the risk of a debt spiral when the value of collateral drops while traders win by going short.
Ishan also describes how Gains Network mitigates risk by providing trading fees and a share of positive P&L to liquidity providers when traders lose. He discusses the recent change in the platform's fee model from a funding fee to a borrowing fee, which follows a traditional long-pay-shorts model.
He further explains the riskiest situation for these protocols - when everyone is trading in one direction and winning, which can significantly damage the liquidity pool. To mitigate these risks, the Gains Network has implemented measures like minimizing open interest and changing from funding fees to borrowing fees.
Ishan explains that the change in gTrade v6.3.2 upgrade is mostly about managing volatility factors. They aim to mitigate risk and keep liquidity providers safe, encouraging more people to participate, which increases the safety of the protocol. They also aim to balance this by creating a protocol that's easy and fun to trade on.
He highlights the importance of addressing volatility, especially in the volatile crypto market, and how it can open up potential risks or profitable trading strategies. Changing to a borrow APR allows for more open interest as it enables a better ratio of longs and shorts due to the extra borrow factor. This doesn't provide much additional risk to liquidity providers, allowing for more total open interest.
However, he mentions that there are trade-offs, like not being able to accommodate trading pairs like stocks. It's about constantly managing these trade-offs to increase efficiency.
Kepler brings up the issue of delisting stocks and indices from trading, wanting to know if this was more a decision of risk management or lack of demand.
Ishan says it's a combination of both. Lack of balanced action (longs and shorts) leads to risk potentials, especially when one-sided open interest occurs, for instance, when a whale wants to go long on a particular stock. This risk is compounded by a lack of volume.