Traditional hedge funds runs the most profitable business models through market-making
Decentralizing market-making with zero impermanent loss is a HUGE market, easy 10x in bull
A first mover in LPDfi, lies an untapped market size of $7.5B 🧵👇
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The yield market is ever-growing:
Over 460 protocols tracked on DefiLlama
Nearly $7.5B market size
I foresee that this will be a blue-chip narrative as people accumulate more stables in both bull or bear market with a new narrative forming: Liquidity Providing Derivatives.
There are better yield alternatives on your stables with @logarithm_fi Nautilus vaults
It then drives a crucial need for projects that build on giants like Uniswap:
Leveraging the huge ecosystem that it already has
Zero IL so liquidity continues to grow
Users continue to earn overperforming yields
Enter @logarithm_fi, the Liquidity layer for Liquidity Providing Derivatives
What are LPDs?
LPDfi refers to projects that are building on @Uniswap v3 positions. They can also include options or perps vault products:
@Panoptic_xyz @LimitlessFi_ @SmileeFinance @InfPools @goodentrylabs
What is Logarithm?
@logarithm_fi is the Liquidity layer for LPDs that allows users to profit from market-making activities without constant position monitoring.
It has a delta-neutral engine strategy, autonomously managing concentrated LP while hedging the volatile assets.
Logarithm Finance provides liquidity to LP-centric protocols to earn boosted yields while actively managing LP positions.
The protocol earns auto-compounding fees on Uniswap-type AMMs and minimizes exposure to volatile assets by creating delta-neutral strategies with short positions on perp DEXs.
Why @logarithm_fi?
Traditionally, users would only earn one or at most 2 types of yields.
But with Logarithm users will earn 4 types of fees:
LP fees from Uniswap
Fees from LPDfi protocols
Emissions from LPDfi protocols
Logarithm incentives for providing liquidity
This is achieved through their Liquidity Shell product, that builds on top of the Nautilus vaults.
Liquidity Shell is indicated as those in blue boxes.
Here’s how it'll work:
Add your assets to the Liquidity Shell to provide liquidity
You can choose to enable the Nautilus Vaults if you want your tokens to be managed using our delta-neutral strategy.
If the Nautilus Vaults are enabled, your tokens will be automatically allocated towards the highest-yielding liquidity provider strategy.
Nautilus Vault
Nautilus Vault beta is live, and its via invite only!
Early users can look forward to some airdrops:
Blast similar style of referral system
Users can deposit funds in their vaults and stress test the vaults, capped at $200
Each participant you invited you will get 15% of their airdrop
Additional 7% from subreferrals
I will first kickstart with my referral link: https://logarithm.fi/arndxt
Earning profitable yields in DeFi is never easy, and it is complex for LPs to become profitable through CLMM due to IL.
This ties in closely with @Uniswap’s model of concentrated liquidity, a game-changer but with a double-edged sword.
It boosts capital efficiency but also amplifies the risks of Impermanent Loss.
IL stings you hard as deviations from your price range allow the price to continue moving against you, leading you to lock in losses in an attempt to catch up.
To avoid the risk of IL, users have to manually:
rebalance the position frequently or
hedge the volatile assets by using options, money markets, or perps.
These strategies require careful management of price ranges and liquidity allocations.
Unless they are constantly doing this, its very very tedious for any defi users to spend so much time on that.
How does Nautilus Vault works?
The strategy has been backtested over 6 months, accumulating fees of 40%!
A portion of these fees goes into paying for gas, rebalancing and borrowing fees on GMX.
So the effective APY is smaller but I do think that this can be further optimized with GMX v2.
Comparing it against Uniswap v3, @logarithm_fi clearly outperforms.
Averaging an APY of 11,8%.
Users can simply deposit USDC into the Nautilus vault and get the strategy automatically deployed, rebalanced and managed by Logarithm.
This is just the beginning of @logarithm_fi and with more optimzation, I believe that APYs will further improve and in their team.
Spoken with the founder myself and I like them a lot.
Good projects take off with a committed team and here are some catalysts i see.
Strong partnerships are already brewing with protocols like: @goodentrylabs @Panoptic_xyz @InfPools
Beta testing is going live with $200 capped per wallet
They have been building on @arbitrum for quite a while with a strong community and its just inline with an $ARB season
There will be some juicy airdrops to look forward to if you use my referral link
Twitter: https://twitter.com/arndxt_xo/status/1750476123094581692