CovDuk Profile picture
Mar 8 7 tweets 2 min read
#DeFi 101: Liquidity pools 🧵👇

Liquidity pools are pools of tokens locked in smart contracts. They allow for trading to happen by providing liquidity.
2. In Traditional Finance, market makers constantly buy and sell assets. This ensures that there is always a buyer and always a seller, allowing trading to happen.
3. In #DeFi, it’s not efficient or viable to have a market maker because every interaction costs gas and the number of transactions per second on #ETH is quite low.
4. Liquidity pools are #DeFi answer to this.

Liquidity pools usually hold two tokens. USDC and ETH is an example of an LP.

Providers are incentivized to provide equal amounts of each token. When the pool is created, the first LP is the one that sets the initial price.
5. If the initial price of the LP is different from that of market price, it creates an opportunity for arbitrage. If that happens, the LP supplier would lose capital. Those who want to add to the pool have to maintain the same ratio.
6. When liquidity is added, the LP receives special tokens called tokens equal to how much liquidity they supplied.

In the liquidity pool, for each token swap, the price is changed by a pricing algorithm through an automated market maker (AMM)
7. The pool will always be able to provide liquidity. As the demand for a token increases, the algorithm increases the price.

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More from @Cov_duk

Mar 10
#THORChain 101: the bridge between the multi chain universe ⛓️

Here is everything you need to know about THORchain and $RUNE, the cross chain AMM that is positioned to change world of crypto.

A thread 🧵👇
2. The entire ethos of the #crypto world rests upon decentralization and immutability. In the past few years, we’ve seen the rise of many chains. It’s become very clear, the future of crypto is multi chain.
3.Every chain has its pros and cons and the most optimized world is multi chain. We’ve seen this being built already with #COSMOS.

However, despite the strides we’ve taken towards decentralization, many crucial entities have remained centralized, like Coinbase and Binance.
Read 27 tweets
Mar 10
$METIS 101: The L2 that solves #ETH's problems

ETH is slow af, expensive af and cant scale

A layer 2 is a framework that helps the base layer (known as L1) scale. This is done by taking the transactions off the L1

🧵👇 ( A thread | 1/22) Image
2. The Scalability trilemma that all blockchains face is that they can only choose 2 out of 3: scalability, decentralization and security.

L2s are a solution that aims at making non scalable chains like #ETH scalable. Image
3. #METIS is building an easy-to-use, highly scalable, low-cost, and fully functional Layer 2 framework (Metis Rollup) to fully support the application and business migration from Web 2.0 to Web 3.0. Image
Read 23 tweets
Mar 9
DeFi Kingdoms 101: the #GameFi blockchain game that's on its way to being the king of #Blockchain games👑

Here's your everything guide to #DFK 🐂

A thread 🧵👇👑

#defikingdom
2. DeFi Kingdoms (DFK) is a cross chain #GAMEFI MMORPG .

It’s a game, a DEX, a liquidity pool opportunity, and a market of rare utility driven #NFTs.

GameFi is the intersection of DeFi, NFTs and the metaverse.
3. #DFK has complex mechanics and brings pixelated retro art to DeFI. It was originally built on the #HarmonyONE $ONE network, but has recently expanded to their own DFK chain powered by #AVAX.

Read 27 tweets
Mar 9
The future of crypto is multi chain. #ETH is great but has a lot of problems. It's scalability sucks and gas is super expensive.

There's a reason why ETH's #DeFi dominance is down 100%

Alt chains are fast, secure and cheap. There's room for more than just ETH. 🧵

#Blockchain
Yes, ETH 2.0 will solve some of the problems, but there's still time for it to come out.

In this super fast paced world that crypto is, a lot of players are already building and being very successful on other chains.
Besides, ETH 2.0 is not gonna make it the perfect chain.
Read 5 tweets
Mar 8
Harmony 101: the $ONE for all blockchain

Here's a thread all about #HarmonyONE, the fast, low cost #ETH VM compatible blockchain that's home to #DeFiKingdoms 🧵👇
2. We’ve talked about this many times before. #ETH sucks at scaling and gas is super expensive.

ETH has been losing market share, especially to fast, low cost chains like #Solana, #Terra and #BSC.
3. ETH’s #DeFi dominance is down 100% from 1 year ago. Alternative chains are well position to grow and eat more of ETH’s market share. The crypto world is going to become multi chain
Read 18 tweets
Mar 7
#NEAR 101: The chain that launched #ETH 2.0 before ETH

NEAR is a PoS next generation smart contract platform that aims at overcoming limitations of other chains (low throughput, low speeds, and poor cross-compatibility) and create an ideal environment for Dapps.

👇🧵(1/15)
2. It’s what ETH 2.0 wants to be, but launched years before it.

#ETH 1.0 has many limitations. It’s not scalable and struggles with large volumes. This became very apparent when cryptokitties clogged Eth’s network in 2017. Since then, gas prices on ETH have🚀 Image
3. Crypto has hardly been adopted by the world and yet ETH is struggling. In the long run, this is not sustainable. ETH 2.0 aims to solve this, but it taking a while.

$NEAR isn’t aiming to kill ETH. Instead, it aims at collaborating with ETH to reduce this bottleneck.
Read 16 tweets

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