Thread by @archon_0x

As promised I looked into @VaderProtocol because some at @Qi_Capital are already in and @RohmanusC's tweet thread got me interested.

So I read up on it and decided to join the dark side. $VADER

1/10
Let's see what kind of #DeFi abomination we got here 😀 No investment advice.

2/10
.@VaderProtocol is nothing new - it's rather interesting how it combines existing #DeFi elements. Its story started in summer 2021 and there are plenty of Medium articles since then you can go through. @invaderbaku tells the story in this thread:

3/10
What's special about @VaderProtocol is how it combines some of the most interesting aspects of #DeFi:

1⃣ A decentralized algorithmic stablecoin, not unlike $UST (backed by $LUNA)
2⃣An impermanent-loss protected AMM (like @Bancor) inspired by @THORChain's Continuous LPs

4/10
3⃣ Protocol-owned liquidity (POL) via bond sales, originally "invented" by @OlympusDAO / $OHM
4⃣ Minting of synthetic assets from pool liquidity (not unlike @synthetix_io @mirror_protocol and soon @THORChain)

5/10
But how do these elements work together?

The Vader Protocol uses its algo stablecoin $USDV backed by $VADER (which uses @terra_money's burn-to-mint LUNA/UST mechanic) as the base asset, which drives liquidity & demand of the stablecoin which is vital for an algo stablecoin.

6/10
LPs for Vader's own AMM are treated as first-class citizens like in @THORChain & @Bancor. They get full IL protection after 100 days and earn on the liquidity-dependent slip-based fees based on @THORChain's CLP. This again drives demand for $USDV as it's needed for each pool

7/10
To sum it up, @VaderProtocol combines multiple "flywheel/black hole" narratives into one protocol: the "liquidity black hole" shall drive demand for its algo stablecoin which again makes $USDV more resilient while reducing the supply of $VADER, plus a boost effect by POL.

8/10
Are there risks? Plenty. We face the typical protocol and smart contract risks, but also a DeFi bear market and algo stablecoins are still experimental, even with $UST at $10b market cap. Also, $MIM is currently the "#DeFi's lovechild stablecoin #1" across chains.

9/10
A short look at $VADER tokenomics:
25,000,000,000 max supply, currently at $333 market cap (with 4B tokens circulating)

30% "fair launch" holders
50% liquidity incentives
10% Ecosystem Growth
10% Team Allocation with 2-year linear vesting

10/10
Where to find more info:

All the links: linktr.ee/VaderProtocol

Summary blog post: medium.com/@vaderprotocol…