Just now, Maverick tokens are officially listed on Binance to start trading. Three days ago, Alvin of Project Lianchuang shared with Foresight News the journey from team to entrepreneurship, from the track to the project itself, and the fact that it became the first project of Founders Fund to return to Web3 investment and won the favor of many top institutions. s story.
Organized by: Babywhale, Foresight News
Recently, well-known institutions such as Founders Fund, Binance Labs, and Coinbase Ventures have invested $9 million in Maverick Protocol, which has attracted market attention. Foresight News also invited Alvin, the co-founder of Maverick, to be a guest in the "Dialogue with the Founder" series of Twitter Spaces last weekend, unveiling the mystery of the project for everyone. Before Binance officially launches the Maverick token transaction, let’s review the project’s characteristics and the story behind it.
This article excerpts the more important information in this Twitter Spaces. Readers who want to know the whole content can go to https://twitter.com/Foresight_News/status/1672935225452818435 to listen to the recording.
Moderator: Welcome to the Foresight News Dialogue with Founders series. Today we invite Alvin, the co-founder of Maverick. Let Alvin talk to us about how Maverick attracted investors, especially Founders Fund, in the bear market. Follow and the story behind the founding of Project Maverick. First of all, let's ask Alvin to briefly introduce himself, and then introduce the team.
Alvin: Let me quickly introduce myself. I entered the blockchain in 2018 and was in charge of TRON's overseas ecology. Since then, I have made more products, including DEX products and aggregator products. Before founding Maverick, I was the person in charge of the Swap product in the MetaMask wallet. At that time, MetaMask’s Swap had a daily transaction volume of 100 million US dollars and a net profit of about 1 million US dollars.
This is some background, and then there is a co-founder on the team side who is the CTO in charge of technology called Baxley. He is responsible for the logic construction and other aspects behind the entire project and leads the team to do research and development. His background is a Ph.D. from Georgia Institute of Technology. Our team has 4 Ph.D. or postdoctoral fellows from Georgia Tech, Cambridge, etc., which is a relatively research-oriented team.
Maverick has innovated on the underlying AMM of DEX, and the research and development of the underlying technology took 14 months. At present, the TVL of Maverick is only tens of millions of dollars, but the actual transaction volume can often rank among the top three of Ethereum.
Moderator: Now let’s talk about the project itself. I believe everyone’s focus should be similar to mine. The two main questions are what innovations does Maverick have in AMM ? The second is what is the economic model of the project?
Alvin: In terms of technology, everyone knows that the AMM model used by Uniswap is a simple model of xy=k. The biggest problem with such a model is that the utilization rate of funds is extremely low, because the funds are evenly distributed throughout the range, and there is very little Liquidity that can really be utilized, and the income is also very low. Although the subsequent v3 has concentrated Liquidity, the Liquidity itself is "dead". Once the price deviates from the Liquidity range, this part of the Liquidity will actually become invalid.
Maverick's idea is that since it is difficult to manually gather Liquidity at any price, it helps users place Liquidity near the current transaction price and moves with the transaction price, so that Liquidity can be guaranteed at any price. It will be better utilized, which means for LP that the utilization rate of Liquidity becomes higher.
I originally wanted to say that it went online last summer, but later I found out that there is still a problem that the higher your capital utilization rate, the greater your responsibility, because the possible slippage, free loss or paid loss will be greater. higher. So we have made four models on this basis, which are to let LP choose your Liquidity to go only in the direction of high price, or only in the direction of low price, or both. The fourth is similar to Uniswap v3 Liquidity addition method.
Then we also discovered in actual combat that the situation that both sides can move is actually very friendly to retail investors. Because you don’t have to worry too much about it. After you put it in, it will come back and change with the price. It is more suitable for Stablecoin or similar Stablecoin, such as stETH/ ETH trading pairs. It is relatively stable and has a growth rate of 4%~5% every year. But it is not suitable for assets like Ethereum or longer tails, because its price changes too fast, and there is a risk of loss for LPs.
For more information about Maverick's Liquidity addition mechanism, please refer to " Dialogue with Maverick: Two years of accumulation, bringing more than just DEX ".
Moderator: Currently Maverick is cooperating with issuers such as LUSD and stETH, what other projects are there in cooperation, and how to communicate with these project parties? Why did they choose Maverick?
Alvin: I think it can be divided into the following categories, one is the Liquidity staking track, the other is the Stablecoin track, and then there is the aggregator track, and of course the last one is some ecological tracks and other cooperation in four aspects .
Then the Liquidity staking area is equivalent to our main track in the early days and up to now, because we think that projects like Uniswap and Curve have obvious first-mover advantages. If a new underlying technology wants to shake their market , or to compete with them, there must be a track on which you can gain a foothold, and then expand horizontally.
Then this track is the Liquidity staking track, and we are doing well so far. Although the TVL of the stETH/ ETH trading pair is not very high, it may be more than 10 million US dollars, but our trading volume is basically It is No. 1 in the entire network because the utilization rate of funds is particularly high. Then the partners include Lido, Frax, Swell, and Coinbase's cbETH. Although Coinbase does not actually incentivize Liquidity, it also has some ecological support. In addition, Rocket Pool is also cooperating, and some newer Liquidity staking projects are also cooperating.
Then the next track is the Stablecoin, and the partners include Liquity, Frax and so on. In addition, Circle, the issuer of USDC, as our investor, and MakerDAO (DAI) have varying degrees of cooperation. In terms of aggregators, we have a lot of in-depth cooperation, because we are relatively new and it is difficult to find a good way to promote users to directly use our protocol for transactions.
Our trading is actually not particularly easy to use now, because it is indeed not our top priority, so before the launch of Binance Launchpool, 90%-99% of the trading volume may be realized through aggregators, including 1INCH, ParaSwap, CowSwap, OpenOcean, etc. If your transaction price is better and the gas fee is lower, you can get more transactions on the aggregator. So this is one of our early strategies, which is why we can get these trading volumes. If more people use our UI to trade in the future, there should be more trading volumes.
Because there are actually a lot of institutions doing Liquidity on Ethereum, including some European hedge funds, they can help some projects or family offices, manage part of the funds, and earn a relatively stable income. They did a lot on Uniswap v3 before, and now they may slowly and continuously expand their TVL and business on Maverick.
Then launching zkSync can make up for the lack of our users, because the gas fee for transactions will be much lower than that of the Mainnet. In addition, zkSync is also the main battlefield of LST. For example, Lido and Rocket Pool will expand to zkSync, so Maverick also chose zkSync as the first network launched after the Ethereum mainnet.
In terms of projects, the current Liquidity protocol Tokemak has also integrated Maverick, and now its integrated Liquidity protocols include Uniswap and Balancer in addition to Maverick. In fact, Tokemak suffered serious losses during the bear market. The main reason is that the losses caused by providing Liquidity on Uniswap were too high, so it has always been more interested in Maverick. Finally, we have also cooperated with LayerZero recently, and we may expand Cross-chain Liquidity in the future.
Moderator: As the first project of Founders Fund returning to Web3 investment, how did Maverick communicate with Founders Fund?
Alvin: The Founders Fund is also a coincidence, and the feeling after that is that they are actually a bit like the previous round of a16z, Sequoia or Tiger Fund with relatively large capital. When the currency circle was relatively low, they were still Those who want to invest in some projects at a relatively low valuation.
So after chatting, they first recognize the underlying technology of Maverick, and then they invest more in infrastructure. They think that DeFi is a confirmed track, and the underlying technology of AMM is still relatively early. Their original words are that we will give resources to Maverick, so that Maverick has the ability to shake the position of Uniswap. So I believe that they are very serious about entering the currency circle to invest first, rather than just investing casually. Secondly, they also attach great importance to DeFi. If you have entrepreneurs here, projects that are slightly later are the best. Then you can communicate with Funders Fund to see what kind of support they have.
Moderator: The final question is, how does Alvin view the future of DeFi, and what plans does Maverick have in the future, and what new possibilities can it bring to DeFi?
Alvin: I may first talk about my personal understanding. The essence of DeFi is to eliminate the need for middlemen, so that users themselves can become market makers to obtain income. Because there is no opening and closing time for digital assets, it is traded 24 hours a day, and it is more difficult to do the market manually. Therefore, there needs to be an automated market-making mechanism on the chain to ensure that transactions are supported at all times. This is AMM, and AMM technology also allows LPs to replace centralized market makers to provide Liquidity and earn relatively high returns. I think this is the essence.
I hope that DeFi can cooperate with each other, such as building on top of each other, instead of saying that everyone builds their own system, which will be very decentralized, and it will be difficult for everyone to compete with Western finance . So I am more in favor of DeFi. Everyone has some original things, and then continue to cooperate, and then form a very large system on this basis. Both the amount of funds and the efficiency have been improved. Only in this way can we follow the real tradition. financial markets to contend with.
As for the roadmap after Maverick, in terms of technology development, the new AMM can better drive some products, such as leveraged trading and perpetual contract trading. One of the pain points of perpetual contracts is that the capital utilization rate of AMM is too low. When users trade on it, without leverage, even normal transactions have certain slippage. If there is 10 times or 25 times leverage Under such circumstances, it is basically impossible to trade.
The significance of Maverick is that when conducting perpetual contract or leveraged trading, the trader is the LP and the counterparty. If the traders are all short and long, then the loss of LP will be very high, so LP must also have Direction, so Maverick's AMM is very meaningful for perpetual contracts and leveraged transactions. We are now actively cooperating with some projects to become their underlying AMM.
Audience: Hello, what kind of mechanism does Maverick have in terms of security? Are there some better mechanisms to prevent security issues such as hacker attacks?
Alvin: The first is that some members of the core team have a background in Internet security. Before that, their company raised $50 million to help giants such as Amazon do security protection. So with such a background, we feel that whether it is writing code or architecture from code, or building the entire system, there will still be a lot of reference and help.
Second, we have done 7 audits in the area of audit, 5 of which are external audits, and we have also found better audits. There are also internal audits and an audit of us by a trading firm.
Third, we also have some mechanisms to prevent such external malicious attacks. For example, when asset prices fluctuate violently in a short period of time, at this time, the Liquidity of users may move back and forth in a short period of time and cause large losses. Therefore, the protocol It will automatically lock Liquidity when certain parameters are met, and then guide users to withdraw assets.
