1/ $CRV is by far the most extreme juxtaposition of being both an amazing investment with huge addressable markets and not being investable at the same time

2/ In less than 6 months, it dominated the stablecoin swap market

And it will play a central role in the two strongest emerging themes in DeFi:

1. Cross-chain interoperability
2. Synthetic Assets

@WrappedBTC

3/ Both of these themes already have demonstrated strong traction & PMF out of the gate but are still only in the early stages

Cross Chain Interop - @WrappedBTC @renprotocol @thorchain_org @CreamdotFinance @ptokens_io etc

Synthetic Assets - @MakerDAO @synthetix_io @arcxgame etc

Read 7 tweets

Andrew Kang

@Rewkang

15 Oct

https://twitter.com/SBF_Alameda/status/1316509291017203712

AMMs aren't broken

Professional MM's don't need them, but they are great for the rest of us and improve liquidity for the space as whole

Good thing that blockchain data is public so we can see what's really going on

https://twitter.com/SBF_Alameda/status/1316509291017203712

https://twitter.com/SBF_Alameda/status/1316509294712381440

Low latency, high throughput orderbook based hybrid DEXs have actually existed for years now e.g. dydx, IDEX, etc.

They consistently are lower than 10% market share

https://twitter.com/SBF_Alameda/status/1316509294712381440

I would refute the the idea that AMMs had very little usage before yield farming summer.

Uniswap had already started to surpass volumes of some well known CEXs and had been experiencing hockey stick growth pre-yield farming

Read 10 tweets

Andrew Kang

@Rewkang

10 Oct

1/ Liquidity Mining rewards are currently wasteful and suboptimal

We can be smarter about defining reward amounts

I present a simple framework for determining DEX LM rewards

2/ First Step - Identify how much liquidity you need

Use Uniswap wBTC/ETH Pool as an example

Benchmarking to the most liquid CEXs, Uniswap is already on average 3x more liquid on a +/- 2% Depth basis

3/ Parsing through onchain transactions, we see a dozen or so 6 figure transactions per day.

Around 1 transaction/day that is >$500,000 & <$1,000,000. Don't often see larger in a single transaction.

Some traders maybe splitting transactions for better execution

Read 15 tweets

Andrew Kang

@Rewkang

28 Sep

@synthetix_io

1/ Oracles Usage in AMMs

Many AMMs (@synthetix_io, @Bancor, @BreederDodo, @perpprotocol, etc.) have adopted oracles to provide reference pricing, but does it really work?

I'll explain 👇

2/ These AMMs use oracles in many different ways. Some use the prices from the oracles to derive a "Zero Slippage" quote price for any size trade (A). Others use them to "rebalance" to external market prices (B). The last group uses them to determine funding rates (C)

@synthetix_io

3/ These projects that utilize AMMs can roughly be bucketed into the categories above

A) Zero Slippage - @synthetix_io @CoFiXProtocol
B) Rebalancers - @BreederDodo @Bancor
C) Perpetuals - @perpprotocol @MonteCarloDEX

Read 13 tweets

Andrew Kang

@Rewkang

28 Sep

1/ There seems to be a common misconception that AMMs won't work because LPs can be constantly arbitraged

Let's clear that up.

2/ First of all, yes LPs constantly get taken by arbitragers. There was rough analysis pre-DeFi explosion, that 70%+ of Uniswap volume came from arbitrage.

There is a lot more soft flow from directional traders these days, but significant volume still comes from arbitragers

3/ The is one false logical assessment that the misconception threads back to:

- Arbitragers make profit from taking from Uniswap LPs
- Uniswap LPs suffer IL from trades
- Trade volume predominantly come from arbitrageurs

-> Therefore, IL is value from arbitrage profit

Read 11 tweets

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