WTF is @astroport_fi and why it's going to supercharge the @terra_money ecosystem.
My fundamental thesis on $ASTRO and what it brings to Terra, $LUNA & $UST 𧡠π
My fundamental thesis on $ASTRO and what it brings to Terra, $LUNA & $UST 𧡠π
To preface this thread, it is important that you understand what Automated Market Makers (AMM) are and why they're important in DeFi.
@HideNotSlide explains it very well for the layman to understand:
@HideNotSlide explains it very well for the layman to understand:
https://twitter.com/HideNotSlide/status/1386358389240958977
1 / So WTF is @astroport_fi?
Astroport is an automated decentralized exchange protocol building on the Terra blockchain, developed by a joint venture entity formed and governed by @Delphi_Digital, @ideocolab, @terra_money and Astroport builders.
Astroport is an automated decentralized exchange protocol building on the Terra blockchain, developed by a joint venture entity formed and governed by @Delphi_Digital, @ideocolab, @terra_money and Astroport builders.
"The design philosophy behind Astroport is simple: to enable decentralised, non-custodial liquidity and price discovery for any asset. To achieve this, Astroport prioritises flexibility above all else; combining various specialised pool types and routing seamlessly across them."
If you've actually read their litepaper (31 min read), you'll know that Astroport is going to be an ever-expanding blackhole for all liquidity on Terra and beyond.
Let me explain why.
astroport.medium.com/astroport-liteβ¦
Let me explain why.
astroport.medium.com/astroport-liteβ¦
To understand @astroport_fi, we first need to understand how it stands out from other AMMs.
3 key features we should know:
(A) Flexible Pool Types
(B) Dual Liquidity Mining
(C) $ASTRO Governance & Value Accrual
3 key features we should know:
(A) Flexible Pool Types
(B) Dual Liquidity Mining
(C) $ASTRO Governance & Value Accrual
A // Flexible Pool Types
I won't go very deep on this but here's essentially what you need to know.
Different AMMs use different algorithms to determine token prices based on the ratio of token pairs in a pool.
I won't go very deep on this but here's essentially what you need to know.
Different AMMs use different algorithms to determine token prices based on the ratio of token pairs in a pool.
As all tokens have different characteristics, various pool types were pioneered and created to suit different tokens for increased efficiency for both traders and liquidity providers.
The following pool type were pioneered by various protocols and are some of the most widely used across token markets:
(a) Constant Product Pools
(@Bancor & @Uniswap)
(b) Stableswap Invariant Pools
(@CurveFinance)
(c) Liquidity Bootstrapping (LBP) Pools
(@BalancerLabs)
(a) Constant Product Pools
(@Bancor & @Uniswap)
(b) Stableswap Invariant Pools
(@CurveFinance)
(c) Liquidity Bootstrapping (LBP) Pools
(@BalancerLabs)
So how does @astroport_fi raise bar?
The chads behind Astroport have taken this one step further by creating a flexible architecture to accommodate pool types of any kind, AND seamlessly create new pool types with only minimal changes to the core protocol code.
The chads behind Astroport have taken this one step further by creating a flexible architecture to accommodate pool types of any kind, AND seamlessly create new pool types with only minimal changes to the core protocol code.
The mad lads have essentially created an amalgamation of the best innovations from the pioneers of AMMs in DeFi: @Uniswap, @Bancor, @CurveFinance, @BalancerLabs
And we've just scratched the surface.
And we've just scratched the surface.
B // Dual Liquidity Mining
Gone are the days where liquidity providers need to face the dilemma of deciding where to focus their liquidity mining efforts because @astroport_fi's ASTRO Generators will allow liquidity providers to receive dual governance tokens.
Gone are the days where liquidity providers need to face the dilemma of deciding where to focus their liquidity mining efforts because @astroport_fi's ASTRO Generators will allow liquidity providers to receive dual governance tokens.
This enables simultaneous dual token farming of $ASTRO AND the third-party protocol tokens.
For example, when we deposit @anchor_protocol's ANC-UST LP pair into the @astroport_fi's ASTRO Generators, we will receive both $ANC and $ASTRO.
Capital efficiency at its finest.
For example, when we deposit @anchor_protocol's ANC-UST LP pair into the @astroport_fi's ASTRO Generators, we will receive both $ANC and $ASTRO.
Capital efficiency at its finest.
C // $ASTRO Governance & Value Accrual
Inspired by the gigachads at @SushiSwap for their $SUSHI & xSUSHI mechanics; @astroport_fi enables $ASTRO holders to stake their tokens in the xASTRO pool to receive more xASTRO, take part in governance, and accrue a share of trading fees.
Inspired by the gigachads at @SushiSwap for their $SUSHI & xSUSHI mechanics; @astroport_fi enables $ASTRO holders to stake their tokens in the xASTRO pool to receive more xASTRO, take part in governance, and accrue a share of trading fees.
As if that wasn't enough, the chads behind @astroport_fi (inspired by @CurveFinance's veCRV model) enables xASTRO to be locked in the vxASTRO pool to amplify their governance power, receive an additional share of trading fees, AND access to boosted liquidity mining rewards.
Not only do $ASTRO stakers earn a share of ALL trading fees, the vxASTRO model fosters a healthy governance system while fairly rewarding both short-term and long-term holders respectively.
If you've been paying attention, you start to notice something:
The chads behind @astroport_fi are creating a Frankenstein's monster of an AMM protocol, except that they're taking the best innovations of proven and battle-tested AMMs in the industry.
The chads behind @astroport_fi are creating a Frankenstein's monster of an AMM protocol, except that they're taking the best innovations of proven and battle-tested AMMs in the industry.
2 / @astroport_fi will host a best-in-class UI/UX in any AMM in DeFi.
Having the best UI/UX among dApps has always been a key feature of @terra_money protocols, but Astroport completely changes the game.
Having the best UI/UX among dApps has always been a key feature of @terra_money protocols, but Astroport completely changes the game.
Not only will @astroport_fi provide traders with a great user experience, but now liquidity providers will actually know how much money they are making through Astroport's personalized user dashboards.
Being able to have an overview of all your liquidity pools, know how much impermanent loss you're incurring, and knowing your profit or loss of each individual pool AT A GLANCE is basically a DeFi superpower.
You can read more about it in @astroport_fi's thread:
3 / @astroport_fi will be one of the biggest TVL black holes in Terra (and perhaps beyond π).
If you've used Terra's current offering of DEXes and AMMs, you'll know that they're decent and get the job done, but they could be doing so much more (no dramas, only innovation).
If you've used Terra's current offering of DEXes and AMMs, you'll know that they're decent and get the job done, but they could be doing so much more (no dramas, only innovation).
@terraswap_io and @loop_finance combined make up for $1.34 billion TVL in the Terra ecosystem. That's really decent for a growing chain, and Terraswap doesn't even have a governance token!
However, let's look at the other layer 1 blockchains. Excluding Ethereum for obvious reasons but let's look at alt chains which have similar TVL to Terra.
Just looking at @solana, the combined TVL of $RAY, $SRM, $SBR and $ORCA absolutely dwarfs Terra's $1.34 billion TVL.
Just looking at @solana, the combined TVL of $RAY, $SRM, $SBR and $ORCA absolutely dwarfs Terra's $1.34 billion TVL.
When looking at @avalancheavax's native AMMs, the combined TVL of $JOE, $QI and $PNG is already $3.86 billion.
Without diving too deep into the numbers, you can see that the @terra_money ecosystem has some catching up to do in the AMM department.
@astroport_fi fixes this.
Without diving too deep into the numbers, you can see that the @terra_money ecosystem has some catching up to do in the AMM department.
@astroport_fi fixes this.
By adopting a flexible architecture for liquidity pools, @astroport_fi greatly expands its Total Addressable Market by effectively catering to token pairs of any kind.
Essentially combining the use cases of multiple dApps into one.
Essentially combining the use cases of multiple dApps into one.
Lastly, with the implementation of @wormholecrypto's Wormhole V2 in the Terra ecosystem, this opens limitless opportunities for cross-chain capability, allowing users operating on other chains to seamlessly interact with @astroport_fi.
Literally a cross-chain space station.
Literally a cross-chain space station.
4 / So why does this matter to @terra_money, $LUNA and $UST?
An AMM is the most important primitive and is the core building block of any DeFi ecosystem.
Allowing assets to freely flow in a trustless and capital efficient manner is paramount in a decentralized economy.
An AMM is the most important primitive and is the core building block of any DeFi ecosystem.
Allowing assets to freely flow in a trustless and capital efficient manner is paramount in a decentralized economy.
@astroport_fi coupled with Columbus-5 and Wormhole V2 will open Terra's floodgates to liquidity from across the metaverse, while enabling $UST pairs for all assets beyond the Terra blockchain.
This further increases the ease of access for capital to settle in Terra, amplifying the adoption of Terra stablecoins and ultimately accruing value back to the apex asset $LUNA.
TLDR: Numba go up, DYOR, NFA.
TLDR: Numba go up, DYOR, NFA.
5 / DISCLAIMER
I am in no way related or working with the @astroport_fi team and I have no vested interest in the project and $ASTRO.
I am merely interested in the project. However, I am invested in the $LUNA and other projects in the Terra ecosystem.
I am in no way related or working with the @astroport_fi team and I have no vested interest in the project and $ASTRO.
I am merely interested in the project. However, I am invested in the $LUNA and other projects in the Terra ecosystem.
Information written here is purely educational and is my own opinion. Nothing I say should be constituted as financial advice, do your own research, and please consult with a professional before making a particular investment.
6 / REFERENCES
Some good reads from members of the community that inspired this thread.
@TheMoonMidas's "Venice of the Stars":
Some good reads from members of the community that inspired this thread.
@TheMoonMidas's "Venice of the Stars":
https://twitter.com/TheMoonMidas/status/1452097568062722048
@DeFi_Maestro's Astroport Litepaper TLDR:
https://twitter.com/Defi_Maestro/status/1436584140699176961
Thanks for reading! I would love to hear your thoughts as well.
Tagging some gigabrains whose tweets and threads have guided me along my crypto and #TerraLuna journey:
@stablekwon @sjpark_TFL @NicolasFlamelX @AlphaSeeker21 @larry0x @TerraBitesPod @darrenlautf @lejimmy @WestieCapital @Speicherx @danku_r @Josephliow @terranaut3
@stablekwon @sjpark_TFL @NicolasFlamelX @AlphaSeeker21 @larry0x @TerraBitesPod @darrenlautf @lejimmy @WestieCapital @Speicherx @danku_r @Josephliow @terranaut3
@TheRyanLion @ErnestasDob @delphiintern @ysihyeok @cptn3m0x @Delphi_Digital @wolf_of_defi @LunaCpt @CryptoWizardd @FynnToTheMoon
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