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Hayden Adams 🦄 Profile picture
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16 Apr, 4 tweets, 3 min read
1/
Defi didn't exist 3 years ago

Now it's an unstoppable rocket ship going mainstream much faster than bitcoin

@Citi gets it

ir.citi.com/6kaLOQ3DM84cUK…
2/
@CNBC gets it

3/
@stlouisfed gets it

4/
The current financial system is unfair, outdated, and generally broken.

Everyone knows this, everyone understand this and defi fixes this.

The narratives play extremely well and imo will resonate with a wider audience faster than many seem to think.

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More from @haydenzadams

Hayden Adams 🦄 Profile picture
16 Apr
1/
Providing liquidity entirely above or below the market price in @Uniswap v3 can be used for both profit-taking and limit orders, while still earning trading fees in the process.

How does this work?
2/
If ETH is at $2500 and you want to take profits as it rises to $3000 simply deposit your ETH to the range of $2500-$3000 on an ETH/DAI (or USDC, etc) pair

At $2500 your position be 100% ETH and convert to DAI as it rises in value until it is fully converted at $3000.
3/
How much fees will be earned?

Depends on how much trading occurs in that price range. But it will provide liquidity with more than 22x the efficiency of a traditional v2 position between 0 and infinity

See this thread for more insight:

Read 7 tweets
Hayden Adams 🦄 Profile picture
8 Apr
1/
🔥 I don't think the insane efficiency of @Uniswap v3 has sunk in yet. Just how efficient is it?

The equation for calculating the efficiency of a concentrated v3 position relative to providing to the entire v2 curve:

1/(1 - (a/b)^(1/4))

where a and b are your price bounds
2/
Over the past 3 months (Jan8-present) the price of ETH/BTC has ranged from 0.0295 to 0.0454

Plugging into the formula, we find it is 9.8x more efficient than v2

So what does this actually mean?
3/
Today, the Uniswap v2 WBTC/ETH pair has $318m in it.

If WBTC/ETH LPs instead provided to the range of 0.0295 and 0.0454 on v3 they could create the same amount of liquidity, and take on the same amount of impermanent loss with just

318/9.8 = $32m
Read 6 tweets
Hayden Adams 🦄 Profile picture
24 Mar
1/
Uniswap v3 provides the only possible "solution" to impermanent loss and price impact

It also lets you reduce total price risk while increasing your impermanent loss (relative to v2) with concentrated liquidity

This might need a blogpost but I'll try a long thread first
2/
"Impermanent loss" (IL) refers to the fact that if you sell a token before it rises in value it would have been better to hold it and sell more at the higher price

Similarly, if you buy a token and it drops in value it would also have been better to hold
3/
The "impermanent" part refers to the fact that if you sell a token and it rises in value you, but buy it back as it falls in value you are back to where you started

IL is only "impermanent" if prices eventually revert to where they started. Then all fees are pure profit
Read 19 tweets
Hayden Adams 🦄 Profile picture
23 Mar
1/
A surreal moment, I can't believe it's finally ready.

🧠 Uniswap v3 was born out of @danrobinson's research into ways of improving AMM efficiency which began 18 months ago

Without him, v3 would not exist
2/
It also would not exist without @sendmoodz and @NoahZinsmeister - who have been working on implementing v3 since the launch of v2

3/
Developers like to call difficult tasks "non-trivial"

But to describe what they pulled off as "non-trivial" would be an absurd understatement

Implementing v3 efficiently in solidity is an incredibly difficult task.

Seriously, just look at the code:
github.com/Uniswap/uniswa…
Read 5 tweets
Hayden Adams 🦄 Profile picture
27 Dec 20
UP003 - a proposal to establish a UNI grants program is the first @UniswapProtocol governance proposal to meet quorum and pass!

And it wasn't even close, exceeding the approval threshold by more than 20M votes:

✅ YES - 60,088,813 (99.99%)
❌ NO - 9,300 (0.01%)
Thrilled that this is the first proposal to pass.

A resounding message from the Uniswap community in favor of funding developers and contributors.

Which reminds me - everyone complaining about slow governance is either concern trolling or missing the point.
On-chain governance is not a panacea. It opens up new risks and trust assumptions that do not exist in immutable, automated systems.

This is why Uniswap is highly automated and governance-minimized.

It's no coincidence the biggest project on Ethereum follows this ethos.
Read 4 tweets
Hayden Adams 🦄 Profile picture
2 Dec 20
1/
Mind-blowing results from @_charlienoyes @danrobinson @dave_white_ and @MartinTassy

TLDR: super bullish for AMMs/Uniswap

Will share some of the interesting results and some thoughts below
2/
Result 1:
"If the volatility of an asset is high enough relative to its average rate of return, LPs on Uniswap will do better than HODLers over time, even when the only incoming trades are arbs."

TLDR: LPing can be good without "retail" volume and arb is not bad for LPs
3/

Result 2:
In a zero latency, zero network fee, arbitrage-only (no "retail") world, the profit-optimizing LP fee approaches (but never touches) 0.

This was one of the more shocking results

TLDR: Lower fees = more profitable arb trades = more total fee revenue Image
Read 7 tweets

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