Thread by @Crypto8Fi

Let us talk about $Vader Protocol.

A protocol which will gain more and more attention as it has combined revolutionary DeFi concepts together.

The focus in this will be on breaking the key concepts down simply for your understanding.

/MEGA THREAD

Firstly,

What is Vader Protocol,

It is a liquidity protocol that combines stablecoin-anchored automated market maker(AMM) , impermanent loss protection and synthetics with protocol owned liquidity.

We will explore this in further detail...

/1

#Vader Protocol aims to combine the principles of:

-Terra “USD” stablecoin burn/mint mechainsms
-THORChain’s continuous liquidity pools
-Olympus Pro’s bonds.

Stay with me anon,

This is where it truly gets interesting.

/2

Let's define possible concerns to us as investors.

-ERC-20. This means the gas fees are extremely high which can present unnecessary costs to us retail investors.

-The identity of the team, founders and partners have not yet come to fruition.

More on this later.

/3

Vader Protocol aims to solve the problem of liquidity and sensing the correct purchasing power of assets at all times.

What does this actually mean?

Let's briefly understand stablecoins first:

- Commodity backed
- Off chain collateral
- On chain collateral....

/4

For the purpose of this thread, we only need to talk about Algorithmic Stablecoins.

Algorithmic stablecoins do not use fiat or cryptocurrency as collateral.

Price stability results from algorithms and smart contracts that manage the supply of tokens in circulation.

/5

An algorithmic system will reduce tokens in circulation when market price falls below the price of the fiat currency it tracks.

If the price of the token exceeds the price of the fiat currency it tracks, new tokens enter circulation to adjust the stablecoin value downward.

/6

We've covered algostables,

But what problem does Vader actually solve?

The problem lies in #DeFi .

It aims for high stability and capital efficiency in the presence of regulators interests growing in overcollateralized and overcentralised stablecoins.

Cough Tether.

/7

Vader by design is a liquidity protocol.

It is unique. This is key.

It uses its own liquidity and asset purchasing power to support its collateralized stablecoin $USDV.

We will talk more about how it does this later.

/8

$Vader as a solution.

Using a decentralised algostable, it aims to be able to hold value even when depgging occurs such as during a flash crash.

The arbitrage mechanism uses its liquidity as collateral.

This is taken from reserves and is termed protocol controlled value.

/9

The key features of #VaderProtocol:

-Stablecoin asset
- Same mint/burn mechanism as UST in its' contract
- Impermanent loss protection for liqudity providers
- Continuous LP incentives
- Minting synthetic assets such as VETH from pool liquidity

Continued...

/10

- Liquidity incentives that fund protocol owned liquidity, reducing rent seeking costs over time.
- Minimal governance with the exception of tweaking system parameters, although can remove governance if self sustainable.

Let's talk about AMM...

/11

The automated market maker.

Think written code that keeps everything in balance.

It uses $USDV as the asset which drives demand and liquidity.

Then the fees taken fund reserve to provide impermanent loss protection and synthetic asset mining.

Therefore as these occur...

/12

$USDV becomes more collateralized over time as protocol expands treasury from bond sales and fees.

I've mentioned it enough.

What is protocol owned liquidity.

Pioneered by Olympus Dao, it was the best way to defend itself against a bank run.

/13

Owning their own liquidity rather than relying on farmers who will dump if it is in their interests.

This led to invention of liquidity bonds.

Taking control over liquidity doesn’t mean their centralized anon.

Quite the opposite. Community owns that liquidity.

/14

Anyone wanting to use it, can.

Especially when an ecosystem similar to Luna develops.

Currently the use cases of Vader are limited

It has not deployed its native AMM.

You can buy the Vader token and participate in staking for benefits such as governance in the DAO.

/15

However, there is such a thing as being early.

5000 more wallets holding $vader since early December.

Back to the thread,

#DAO is a decentralized autonomous organisation.

Think community owned protocol.

Hence the staking to participate.

/16

In all of my material, I will stray from speculating.

As an investor, it is important we compare it to its' competitors…

Arguable the hottest decentralized stablecoin is #UST .

It doesn’t seek to compete with Terra in its’ main aims.

/17

#Terra started with a focus on real world adoption and payments using a decentralised stablecoin.

#Vader focuses on adding programmable leverage to ETH DeFi.

Truly, only fundamentals and time can tell if they will co-exist or compete.

/18

However lets note that features such as:

-Impermanent loss protection with a stablecoin and better fees is an attractive AMM and if successful can drive major adoption from yield farmers.

/19

Moving onto the tokenomics,

This is the allocation of 25bn tokens. Familiarise yourself with it, anon.

Always important to understand who owns what and when the unlock periods are to avoid a potential dump.

/20

As discussed prior, #VADER is minted when #VETH is burnt.

$VADER is issued 10,000:1 for holders of Vether (VETH)

This is distributed via a fair process of Proof-of-Value.

VADER can be staked for xVADER or burnt to mint $USDV.

/21

So NFA, but if you are interested where it is listed:

-Gate.io
-ZT
-BKEX
-MEXC
-Uniswap V3

/22

Let's look at $Vader roadmap.

Is there anything that will drive value in the short/medium term- think Q1/Q2 as an investor.

All partnerships are ecosystem bonuses.

A greater ecosystem (think Col-5 in Luna) is likely to drive greater growth.

/23

Q1 2022
• USDV partnership integrations
• Collateral Debt Leveraged Positions
• Crosschain Deployments
• DAO transition
• Expansion of Asset Pools

Q2 2022
• Treasury Partnerships
• Sponsored Liquidity Partnerships/IDOs
• Sponsored Bond Sales Partnerships

/24

Moving onto price history,

Since early December, we have seen a steady positive rise in the price value of Vader.

It climbed from $0.018 to $0.1034 and is now arguably retesting previous all-time highs at a price of $0.097.

/25

Let's briefly discuss $Vader team.

It is important to note:

Trust is built on elements including benevolence, competency, and reliability.

It is useful to understand the team, partners and founders as well as their relevant experiences when evaluating a project.

/26

Not knowing the team has nothing to do with the success/failure of a project.

It merely is another piece of information to help you solve the puzzle.

Think Bitcoin, anon.

It is more to do with the community/ developers/ partners and tech that we holistically evaluate.

/27

But as always, the decision is yours anon.

My thesis.

Glad you made it this far,

Vader is a project to keep an eye on because it has the potential to be a top contender network as a self serving liquidity protocol within DeFi.

The team is delivering to their promises.

/28

This is a very good sign since they are only becoming more well-known.

Based on the current market cap and the multiple use cases and industries it can disrupt, Vader has great upside potential if they keep the momentum and keep delivering reliably...

/29

Furthermore, the current market conditions seem favorable for projects like Vader due to the DeFi revolution and hype we are currently experiencing.

That's it for my thesis.

If you want to know more into $Vader I recommend reading this:

medium.com/@crypto8fi/vad…

If you liked this thread I would love it if you could share it with your friends by retweeting the first tweet:

https://twitter.com/Crypto8Fi/status/1478453204421591042?s=20

An update on the Devs:

https://twitter.com/WGMIApe/status/1478611266776096768?t=WaPzFuweigyQ5EKzjD4lig&s=19