Thread by @bizyugo

Why I invest in @rage_trade. we'll go through the overview of the protocol and why it's awesome and I'll tell you my reason by the end of the thread.

So buckle up and let's get into it 🧵🐂 (1/19)

‼️ Disclaimer.

This is not financial advice. Crypto is a very high-risk investment vehicle. This thread is intended for educational purposes. Take everything you read here with a grain of salt. Note this project is not released on Mainnet yet.

DYOR!

2/ @rage_trade, I know it sounds negative but trusts me it’s not. Rage Trade is a perpetual trading platform where you can use up to 5x leverage.

Another perp protocol bizyugo? Really? This one is very interesting and free knowledge is always good, right?

3/ @rage_trade goal is to be as capital efficient and as liquid as possible.

They are hoping to achieve this combination of some unique designs — vAMM, omni-chain recycled liquidity, and 80-20 vaults.

Let’s break them down one by one.

4/ Virtual Automated Market Maker is a design by @perpprotocol where the pool holds virtual tokens (i.e., vETH) — synthetic representations of underlying tokens in the spot market ($ETH).

Think $WETH but instead of using it in other chains, it’s for perp #trading.

5/ Obviously, you still need to deposit real assets, either in form of LP shares from other protocols or with $USDC but when you’re placing the order (trading), you’re using the aforementioned virtual tokens.

Why not just trade with real assets?

6/ One of the main issue of on-chain perp trading protocol is the lack of liquidity, what’s @rage_trade solution?

Bridging LP shares across chains and unifying them as their own liquidity.

They call this ‘Omnchain Recycled Liquidity’. Neat isn’t it.

7/ Let’s circle back to tweet 5.

With omnichain liquidity, you can deposit LP share from any other chain as long as it is compatible with @LayerZero_Labs.

Check out the list below, though only @CurveFinance’s Tri-Crypto is accepted now (again the protocol is still on testnet).

8/ The last piece of the puzzle. 80-20 Vault.

Deposited yield generating assets (LPs share from other protocols) will be divided 80% to earn yields on external protocols and 20% for providing liquidity on @rage_trade while also generating yields on external protocols.

9/ Why 80-20? This isolates the risk of the 80% of TVL, accruing value by simultaneously generating extra yield and not solely relying on @rage_trade generated trading fees.

https://twitter.com/0xAthanase/status/1549787089432023040

10/ This vault design also combines @Uniswap v2’s LPs payout and v3’s concentrated liquidity. Traders can enjoy the deep liquidity and LPs can enjoy more yield.

Everybody like juicy yield －deposit LPs and got yield on top of your yield.

11/ Since this is a perp trading platform. We gotta talk about Funding Rates. They have three methods to determine it 👇🏻.

If everything is running smoothly, option 1 will be the default, but if CEX’s and @rage_trade’s funding rates diverge, they can switch between methods.

12/ For the price, they also utilize @chainlink oracle to fetch spot TWAP price.

If the spot price and perp price diverge >5%, the spot price will be used to check for liquidation. If there is no price divergent, perp price will be used.

13/ Combine all those puzzles and help from @LayerZero_Labs to send messages between chains and @StargateFinance to bridge the assets between chains.

You get a composable and liquid perpetual trading protocol.

14/ You can try paper trading on their protocol now. They have also integrated a faucet.

To get a feel of the protocol and give feedback to help them improve the protocol. testnet.rage.trade

15/ Nothing is without risk:
- Code risk like any other protocol
- If @arbitrum (chain or sequencer) is down, #RageTrade will be affected
- Dependency on @LayerZero_Labs and @StargateFinance

16/ For fun, this is the inspiration behind @rage_trade.

A riddle from @haydenzadams, #Uniswap inventor and the answer by @scott_lew_is

Check it out, giga brain type thing here.

https://twitter.com/haydenzadams/status/1419715588323217412

17/ A lot of VCs, hedge funds, and respectable CT anon backing this project.

Check them out listed by @crypto_noodles 👇🏻

https://twitter.com/crypto_noodles/status/1545052356043165697

18/ Now, the reasons why I invest in this protocol:
- The combination of designs and mechanisms I discussed above
- This perp might onboard a lot of users with the reward prospect
- With backers listed by @crypto_noodles, with their track record, this may be a sound investment

19/ Shoutout to the team working tirelessly building this protocol:
@0xCrema
@0xDosa
@0xAthanase
@0xVertex
@crypto_noodles

That's basically it for @rage_trade. Check them out and wait for their launch on mainnet. This could be a game-changer.

Show some love and maybe a retweet if you like this thread. Follow me @bizyugo for more educational posts like this. Bizyugo out.