MrStiive 🦇🔊 Profile picture
Oct 19, 2021 22 tweets 14 min read Read on X
@warpfinance🧵1/20

A ~$4M micro-cap w *$13B* TAM

$WARP is about to release its v2 #BlackSmith, further innovating on lending for yield bearing assets

The #DeFi 2.0 narrative is strong, but the potential of the @element_fi ecosystem it will leverage is underappreciated =>THREAD Image
2/ $WARP was a pioneer in #DeFi summer by being the first to enable borrowing against Liquidity Positions (LP).

This innovation unlocked a $4.7B TAM beast, whilst the borrower continued to earn LP fees on their underlying assets 🔥

Other DeFi dApps have since copied this idea. Image
3/ This V1 is live today with $16.5M TVL
eg if you’re bullish on $WBTC / $ETH in Q4 and wanted to keep exposure, but also wanted $ to trade alts you could;

1. Add 50% of each as univ2 LP & earn ~2.5% APR
2. Borrow 75% LTV $USDC at 2.19% APR (-0.31% net)
3. Buy alts
4. Profit 💸 Image
4/But now $WARP are innovating again with the goal to freeing the potential of other illiquid yield generating assets.

Introducing Warp V2 #BlackSmith with initial focus on integrating @element_fi fixed yield assets ($163M TVL!)

$WARP will service & expand this TVL.

How?? Image
5/ First, what does @element_fi do? Well, it leverages yield generating pools like @CurveFinance and @iearnfinance, and splits it into;

Principal Token (PT) = the locked upfront capital. eg 100ETH

Yield Token (YT) = future yield expectation (eg 12 ETH), accruing value over time Image
6/ The innovation here is that the primary market maker can now sell this PT and just keep the YT.

e.g., if the primary sells the PT for 90 ETH to a secondary buyer;

- Primary has spent 10ETH for a YT worth 12ETH (20% APR)

- Secondary has spent 90ETH for a 100ETH PT (11% APR) Image
7/ That is element allows the primary to sell a PT at a fixed discount, which becomes the secondary’s fixed interest rate.

This is a great innovation! 👏

BUT, from the example, you can see that the secondary has much higher capital requirements (900%), and earns lower APR (-9%) Image
8/This means we see the market force the discount to be as high as possible, often resulting in the fixed APR exceeding the YT APY

This is not good for the primary, who would be at a loss to sell; thereby limiting TVL

This IMO is the main reason @element_fi *only* has $163M TVL Image
9/ Why do I say *only* $163M TVL?
Well, the potential of the ecosystem is MUCH bigger!

e.g., let's look at the TVL of the 3 $CRV assets supported on launch:

$triCrypto2 – $725M
$LUSD – $112M
$stETH – $4.8B

that is, *$5.7B* could find its way through @element_fi in these alone! Image
10/ Enter @warpfinance V2 #Blacksmith, which will provide a platform for borrowing stables using @element_fi assets as collateral

That is, instead of forcing the primary selling the PT at an unfavourable discount, they could instead borrow against it 🤯

warpfinance.medium.com/the-warp-v2-bl…
11/This drives a competing market force to selling the PT, and forces the market to reach a nash equilibrium to benefit both primary and secondary equally.

e.g. when annualised discount < borrowing interest rate, primary will sell at fixed rate. Else, they will borrow against it
12/ We saw that the fixed APR is greater than the YT APY for many assets. In this case, the primary APR is 0%!

Adding the option for the primary to instead borrow against this asset, forces the secondary to reduce their fixed rate to remain competitive.

I even did the maths 👇 Image
13/ That is, equilibrium should normalize about the threshold where 50% will sell at fixed discount, and 50% borrow against the asset

This is great for @element_fi, as a more balanced system will undoubtedly lead to more Curve/YFI assets locked ($13B potential!) for greater TVL! Image
14/ Further, both the primary and secondary participants can use $WARP to borrow against their PT, to buy even moar PT at discount!

This creates LEVERAGE in the ecosystem, creating further demand in the system for PT, thereby increasing the incentives for primary to mint more! Image
15/ How does leveraged APY work?

e.g. let’s assume a fixed/YT APY of 24%:

If the WARP lending rate is ½ that at 12%, the borrower now gets a 10x return on original APY = **240% APY**

As the WARP lending rate decreases (12% is high APY for stables), leverage tends towards 20x! Image
16/So, if both primary & secondary are using WARP, we could see up to 100% of the @element_fi TVL come through $WARP.

Whilst simultaneously making @element_fi PT/YT more attractive to significantly increase the size of the pie

That's why assuming just $163M TVL in $WARP is FUD.
17/ Why is this important? Well, you can lock your $WARP into veWARP to earn a share in the platform fees!

The fees generated will be able to be used to market buy WARP🚀

Further, veWARP can be used as collateral for borrowing against LP and PT positions
warpfinance.medium.com/warp-introduce…
18/Another innovation is that each lending pair on @warpfinance is isolated to that pair, and each carries its own risk/reward

WARP will also release #Chisel, which will enable users to add lending to multiple pools in 1-click, to create a weighted fund of varying APR and risk🤯
19/ And there’s so much more… The WARP team has BIG plans. Some more milestones planned 4 next months;

- Custom pairs (borrow ag ANY fungible token)
- Uniswap v3 LP (borrow ag NFT)
- Free bridged L2 capital

The aim of WARP is to pioneer unlocking capital efficiency.

#DeFi2.0
20/ Also worth mentioning that the circ. supply on CG/CMC is wrong. Admins in TG says ~15k

From my est. circ supply should be closer to 17k, which would put the market cap at ~$3.7M, *NOT* ~$6M.

FDV is like $30M, well below the expected minimum TVL from @element_fi integration Image
21/ So in short, V2 will instantly join the @element_fi ecosystem with $163M TVL.

Then, the market balancing and leverage capabilities of $WARP could quickly bolster that TVL to absorb more of the $13B+ TAM

Collected fees will be distributed to veWARP stakers.

WARP is <$4M MC
I’ll leave with some links:

@Jos12Olson (GOAT) thread for more background:

CG: coingecko.com/en/coins/warp-…

Dextools: dextools.io/app/ether/pair…

Website: warp.finance

Live Roadmap for launch + features; warp-gosling-4a2.notion.site/ef06655db2834b…

I smell launch soon

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with MrStiive 🦇🔊

MrStiive 🦇🔊 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @MStiive

Jan 5, 2023
$BTRFLY, a project which could;
- deliver a top #10 stablecoin with TRIPLE #RealYield
- while becoming the central bank of the internet
- while solving Ethereum's EOF/MEV challenges

Let's do a pre-wp speculative dive into @redactedcartel's upcoming $DINERO

A dirty thread🧵👇
This will be a nerdy tech speculation of some concepts that COULD be in the upcoming $DINERO whitepaper [e.g. if I was designing it]

If you are not familiar with $BTRFLY, this is a good primer;



To do this, we need to touch on LSD's, stablecoins and MEV
Liquid Staking Derivatives, LSD;

Staked $ETH positions are currently locked, creating the need for liquid derivatives

But this will soon change with the Shanghai fork (~March), which will allow staked ETH to be withdrawn

This will ease the burden of keeping derivatives liquid
Read 44 tweets
Jan 3, 2022
Just realised how stupid i've been by promoting $XFT... 🤦‍♂️

....PLEASE do **NOT** buy $XFT....

The below "marketcap of" pic is *NOT* accurate...
(infact, it's off by a couple million %!)

So, why do I want you to sell so badly? Let me explain.
A quick 🧵
The way that the $XFT tokenomics work is that 100% of the future demand for privacy has to fit within the circulating supply market cap of $XFT.

Currently the marketcap is ~$40M (~$10 per $XFT), so someone could burn the entire supply to mint $40M worth of privacy assets.... Image
but this is not rlly valid, as its unlikely that demand for privacy is just a one time event.... the price of $XFT should increase gradually over time as the demand for privacy slowly gains adoption...

Price appreciation is a function of adoption.

What does this mean for $XFT?
Read 15 tweets
Aug 26, 2021
/1 $ZORA @zoracles MICRO-CAP thread.

#UNIBOND LAUNCH IMMINENT IN *COMING WEEKS*

A suite of privacy technologies, which are about to culminate into the future leading NFT marketplace by volume… NFTs not of JPEGs, but tokenised yield bearing ASSETS!

The future of NFT = ASSETS Image
2/ INTRO; The beauty and curse of DLT blockchain is that it is a PUBLIC ledger.

This transparency allows it to be immutable and secured by anyone with a node, however, the downside is that your activity and balances are broadcast publicly.

Your entire $ETH history is public. Image
3/ Zora uses “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge”.
Zk-SNARKS, are math proofs to prove you know something without declaring the actual data.

They effectively work like encryption for blockchain data, by making public data unreadable without the key.
Read 28 tweets
Mar 28, 2021
1/ Microcap megathread; Offshift $XFT.

@OffshiftXFT is a cross-chain privacy-as-a-service by use of zero knowledge synthetic assets (zkAssets) on $ETH and $DOT/ $KSM (via moonbeam) networks.

zkAssets will be the first to allow for privacy in DeFi = #PriFi.

This will be huge! Image
2/
Through 1:1 value exchange of $XFT, any synthetic asset with a $LINK price feed can be minted as a zkAsset.

For example, mint zkBTC, zkXAU (gold), zkUSD, etc.

The value and type of the asset is then encrypted and private. You are now free to trade/invest this asset privately Image
3/
To mint zkAssets, 100% collateral of $XFT is burned.

On reverse, zkAsset is burned and equivalent $XFT is minted at the new value ratio.

Therefore $XFT supply is elastic to the net value of assets being minted/burned.

No lending interest %, no margin calls, no liquidations Image
Read 13 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

:(