Thread by @josefabregab

Investors want the yield, but not the commitment

The recent "dip" made crystal clear what type of stablecoin yield alternatives will take over during this cycle

A 🧵

2/ When the market starts getting rowdy, whales tend to exit high-risk positions and look for safer alternatives in order to protect their funds

What do you think becomes the most attractive alternative?

Bingo!

Stablecoins💲🎯

Stablecoin farming, staking, and lending.

3/ Stablecoin farming tends to be the most attractive alternative, since it usually yields higher APYs

Nevertheless, it carries more risk than the latter alternatives. Users might have to swap to get a 50-50 allocation (exposure to fees, maybe slippage, & impermanent loss risk)

4/ "How would they be exposed to Impermanent Loss? Stables don't move"

False.

They don't move *that much*, but when talking about millions/billions of dollars, a $0.001 change in one of the stables can change the pool's composition & ur token's too, creating exposure to IL risk

5/ Luckily, platforms like @Platypusdefi and @hummusdefi came in and COMPLETELY changed the game

What are they?

Single sided AMMs: they provide single-sided liquidity provision features, allowing LPs to provide liquidity with zero IL and traders to swap with minimum slippage

6/ Historically, LP tokens represent your share of a pool with 2 or more tokens in it, meaning that the composition of your LP tokens might change between deposit and withdrawal (not gud)

In the new model, each LP token represents your share of a single token in the pool (No IL)

7/ Now, the big question:

Are APYs higher than those of traditional stable LP farms?

Well, they can be😏

Both platforms have governance tokens that can be staked to generate veTokens

The more veTokens you have, the higher yield you get on your stables🤤

BUT!.. There's a but

8/ If you unstake ANY amount of staked governance tokens, your whole veToken stack gets slashed (its gone)

This token stack wasn't really worth any money, but your "higher" or "boosted" yield its gone.

You went back the "starting yield" & the cycle starts again

9/ This is a great incentive to get users to lock their governance tokens for longer and don't ever think about unstaking them.

Although, it certainly is a hassle for those who do want to be able to move their funds freely

Other protocols know this as well

10/ This leads to 2 potential outcomes:

🔹Secondary protocol steps in (the "Convex") and stakes #PTP or #HUM forever, offering users to stake stables in the secondary protocol & enjoy the boosted yield, since its a higher APY than they'd get by themselves

🔹Full on Curve Wars

11/ @Platypusdefi already resulted on the first outcome: The Convex

@vector_fi was exlusively created to acquire Platypus TVL & yields

It offers single sided stable LPing, and #PTP staking

@vector_fi then stakes #PTP for #vePTP and offer users boosted APY for their stables

12/ Since @vector_fi has a way bigger stack of #vePTP, they encourage users to stake stables and earn Vector's boosted yield without the commitment

Users can get the high stable yield w/o having or locking #PTP

Investors love it!

They get the yield, but not the commitment😎🤝

13/ How do I know investors love it?

Here's some data regarding @avalancheavax

1. Only major chain in green all across the board
2. TVL didn't move during the dip even tho most of its major protocols were in red
3. ALL the TVL went to @Platypusdefi & @vector_fi during the dip

14/ Besides, if we look closely, @vector_fi literally captured over 1/3rd of @Platypusdefi's TVL already

15/ This Platypus & Hummus model is pretty sweet, since it:

🔹Provides whales an exit from volatility w/o withdrawing their funds from the network
🔹Allows traders to swap stables with close to 0-slippage
🔹Maximizes Capital Efficiency

Funds would flow IN during volatile dips!

16/ @hummusdefi & Platypus have very similar models, but Hummus adds one key additional feature:

Builder Mining Rewards🛠️📈

The BMR could allow @hummusdefi to not only offer a higher yield, but offer a MULTI-TOKEN yield🤯

It'd be INSANE to earn #METIS by providing stable liq🥶

17/ @hummusdefi will be launching Tuesday, so there's no "Convex" yet. This sets the stage for Full On Hunger Game type of Curve Wars

No LP pairs. No Impermanent Loss

@MetisDAO would benefit hugely from this new model.

Whales, users, dApps: the whole ecosystem🌎

19/ To sum it up:

🔹Stablecoin high yield alternatives are KEY for any chain's sustainability
🔹Stablecoin high yield alternatives w/ no locking period will drive adoption
🔹Single-sided stable LP will be the new standard
🔹Investors want the high yield, but not the commitment

20/ If you enjoyed the thread or found it informative, don't forget to hit me with a follow and Like/RT🤝

As always, any additional that could complement or challenge any of the mentioned claims is more than welcome. The end goal is being well-informed:)