Stitch

Stitch

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Business model in Defi lately I’ve been talking a lot about the “business model” of Defi projects, “why?” Defi is a young but already fairly large market that positions itself as a yield generating instrument that’s supposed to compete with stocks bonds the equity market and others meaning this market is supposed to become a financial tool that investors actually use to make money accordingly no yield = no investors = no growth but if you look at the current Defi project models, 99% of them have no real income besides ◆ gas fee commissions ◆ token that’s not enough for a sustainable project, the problem is that user activity depends on the market, in a bear market it drops and so do the project fees and token dilution is just a dumb idea overall, you can’t keep diluting a token forever that’s why now when looking at any project you need to focus on its yield, in the future only those will survive the market, and understand which models actually generate that yield if the docs or other sources don’t mention any info, that means the yield comes from the two methods listed above those projects are definitely not worth considering for a long term stable yield now we’re already seeing projects with sustainable systems, for example @alturax generates yield using 3 market instruments ◆ arbitrage 50% ◆ staking generates 30% ◆ liquidity 20% this kind of model is way more resilient to different market conditions and accordingly has a much higher chance of long term success the days when users only looked at TVL are over, it’s time to pay attention to the model the idea and the project’s yield

Make sure you become an early user @alturax announced the launch of their points program and leaderboard, I unfortunately didn’t manage to get into their LB yet, due to a lack of liquidity I’ll be looking around in parallel, the project is definitely worth the attention they twitter.com/St1t3h/status/2007...

Yield in DeFi while keeping assets in your wallet. Aqua many users have been using the DeFi we used to for a long time, me included, with the AMM mechanism we familiar with but this mechanism has key issues. the main one is idle capital after LP assets are locked in pools, 80-95% of the liquidity in a pool isn’t used for its core function, all the real work is done by 10-20%, the rest of the assets just shape the price related drawbacks ◆ locking assets in pools. it doesn’t allow assets to be used for other purposes and creates security risks, protocol hacks and loss of funds ◆ fragmentation. because funds are locked in a single pool or protocol, DeFi protocols are forced to compete for liquidity by offering extra rewards and different marketing incentives the 1inch project released the Aqua whitepaper, which introduces a new type of shared liquidity layer this is a new method that brings in a set of innovations that fix these AMM vulnerabilities in Aqua, an LP doesn’t provide assets to lock them in pools, instead they provide limited access to their assets from their wallet to pools meaning when an LP wants to interact with Aqua, they simply grant limited access to their assets, without locking them, at the same time to multiple protocols, pools, and other opportunities Aqua itself doesn’t store assets, it stores virtual balances to calculate the liquidity formulas this makes it possible to eliminate several vulnerabilities at once: improve asset security, funds stay in the wallet and not in a shared pool, use multiple strategies instead of a single pool, and increase efficiency key features of Aqua: ◆ increase asset security by keeping funds on LP wallets ◆ partially solve the asset fragmentation problem ◆ use a wider range of tools to build yield logic ◆ boost capital efficiency despite solving some AMM problems, Aqua has its own set of vulnerabilities LP behavior risks, an LP can revoke access to assets, which creates extra challenges for liquidity calculations strategy risks. more accessible functionality increases the complexity of building effective strategies, which raises the risk of losses can’t say that Aqua is better than AMM, since it has its own risks, it’s more of a tool that lets you choose based on your strategy and evaluate risks and opportunities in each case I also continue to use @katana, which has an AMM model, but not the classic version

Centralized AI pushes you someone else's values today every web3 user talks about decentralized finance, banks and payment systems. everyone wants to integrate decentralization into all areas of business and government but at the same time no one thinks about decentralizing the

new Solstice farming strategy using Exponent a few days ago @solsticefi announced a new partnership with the @ExponentFinance, which allows us to get a new method of earning yield Exponent is a protocol that splits yield into two parts, the PT token and the YT token. it works twitter.com/St1t3h/status/1983...

USX yield method USX the most promising stables on Solana, its advantage is the speed of transaction processing and low gas (thanks to the sol infrastructure). but besides that its flagship advantage is eUSX eUSX is a yield token that confirms the ownership right of USX. simply

Simple IL hedging strategy using GammaSwap earlier I already talked in detail about how @GammaSwapLabs works and about “manual” hedging using a Straddle position on perp options the manual method looks too complex and intimidating, so I found a new way to hedge using yield

Peaq will surpass Ethereum everyone heard about @peaq but few really get its actual value and potential. here is a simple and clear analogy ethereum blew up back in 2015 as a platform for the new, emerging tech for daaps. it built an “infrastructure” that made it fast and easy

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