Thread by @MapleLeafCap

(0) Only a matter of time before [long-spot / short-futures] trade to capture risk-free yield gets tokenized – v. hard previously given only CEX’s had perps. W/ new gen of DEX for derivatives as enabling Lego blocks, this product is now a reality via @USDL on ETH by @LemmaFinance

https://twitter.com/LemmaFinance/status/1466127877074657281

(1) This basis trade yield had historically hovered around 3-5% to as high as 40-50% depending on how boolish traders are. One’d argue that aside from the Aave / Compound USDC yield, this is the only other true “risk-free” rate in the market.

(2) It’s neat in 3 ways – 1 is that Lemma can eventually move assets across various protocols to capture the best basis spread + deposit into AAVE/COMP equivalents when basis is negative, so assuming low gas the strat should be strictly superior vs. manual.

(3) 2 is that the hard work put into integrating w/ all the deriv platforms gives Lemma a big leg up to eventually (a) become a deriv aggregator and (b) offer cross-margins within 1 platform. In that sense, the $USDL product is just a starting point.

(4) 3 is that $USDL token being a collateral can not only be folded and levered but also should naturally drive meaningful baseload derivative DEX volumes when at scale. Could see Lemma + DEX partners offering decent token incentives supercharging growth here.

(5) Frankly it’s just much easier for ape a product like this vs. manually putting on the trade w/ slippage. Could also see Lemma getting some sweet airdrops from DEX partners + really enjoying economies of scale (gas, fees, crossing, etc) along w/ add’l kick on token rewards.

(6) My guess is the fee structure could eventually look similar to $LDO and $YFI where a small take-rate on yield accruing to $LEMMA treasury (post gas & commissions). It’d get real fancy when 1 day LEMMA can plug directly to (a) other chains and (b) CEX’s directly.

(7) So w/ derivative DEX’s catching depth w/ adoption + appropriate token incentives + integrating w/ the $CRV’s of the world, could personally see $USDL catching meaningful TVL as a new key DeFi lego block. @FoliusVentures is glad to be involved =)