/1 @traderjoe_xyz just launched the whitepaper of their brand new AMM!

The AMM is called "Liquity Book", and aims to solve the problems encountered by Uniswap V3.

Here's everything you need to know about it🧵👇
/2 Liquidity Book

The whitepaper is a little too technical, but I'll try to simplify it and present the essential parts of their new AMM.

Liquidity Book(LB) arranges the liquidity of an asset pair into price bins.
/3 When swaps are performed, the funds available in a liquidity bin are exchanged at a constant price.

If a swap requires more liquidity than is available in the current bin, it will move to the next bin.

LPs can concentrate liquidity around a price range delimited by 2 bins.
/4 Impermanent Loss

One of the most critical issues of Uniswap V3 is that impermanent loss often exceeds swap fees.

A study effectuated by the @Bancor team showed that 50% of Uniswap V3 LPs lose money.

Liquidity Book solves this problem by introducing variable swap fees.
/5 Swap fees will have 2 components:
-base fee
-variable fee

The variable fee will depend on the volatility of the assets in each pair.

It is designed to compensate LPs for instantaneous volatility, encouraging them to manage their liquidity around the moving price.
/6 Market Depth

As you might already know, a larger amount of liquidity deposited to a pair results in lower slippage for trades.

Market Depth measures how much of an asset can be traded for another asset at a given price level.

A higher market depth -> lower slippage
/7 By incentivizing LPs to actively manage the price range of their liquidity through variable swap fees, LB market depth is likely to increase.

As shown below, the market depth of Liquidity Book is within 1% of Uniswap V3 for positions that span up to 60% of the price range.
/8 Other things that are worth mentioning

∘ Trade Routing - swaps will be routed through legacy AMM pairs when better pricing is found(this shouldn't happen often though)

∘ Protocol fees - a portion of swap fees will be retained for the protocol
/9 The whitepaper shows that the Liquidity Book AMM will solve 2 main problems:

-Impermanent loss (unless there's a massive change in price, the swap fees will exceed impermanent loss)

-slippage (due to the arrangement of liquidity in price bins)
/10 That's it!

I'm excited to see that #Avalanche projects are starting to innovate again.

If you found this thread helpful, please leave a like and retweet the 1st tweet. 🤝
/11 Follow them more alpha about Trader Joe and Avalanche Ecosystem:

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More from @TheDeFinvestor

Aug 22
/1 Ribbon Finance is bringing options to the masses!

The protocol vaults earn yield by running weekly automated options strategies.

Here's what you need to know about @ribbonfinance🧵👇 Image
/2 Ribbon Finance is a protocol that helps users access crypto structured products.

Ribbon Vaults are yield-focused strategies accessible to everyone.

The vaults are running a weekly automated options selling strategy in order to earn yield using Opyn options protocol.
/3 Ribbon's vaults currently use 2 different strategies:

- Covered Call - The vault writes out of the money calls

- Put selling - The vault writes out of the money puts

I'll explain how each strategy works down below 👇
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Aug 21
/1 non-liquidatable perps, borrowing liquidation protection...

@dopex_io will make all of these possible!

Imagine opening a leveraged position on your favorite DEX without worrying about liquidation price🤩

A 🧵 on Atlantic Options👇
/2 Firstly, you have to understand how Dopex options work.

Atlantic Options are European options(they are cash settled and can't be settled before expiration).

If you bought an $ETH call option and you're in profit, you still can't take profits before the expiration.
/3 If you don't know what is the difference between Call and Put options and how options work, check this 🧵 first:

Now let's get back to Dopex options.
Read 16 tweets
Aug 20
/1 The Synthetix Ecosystem is taking off🚀

Which are the protocols that leverage the power of Synths?

A 🧵 on the most innovative projects built on top of Synthetix👇
/2 Why would a protocol use Synths rather than the original assets?

By using oracle price feeds to establish the price of assets for swaps, @synthetix_io offers trades with little to no slippage between Synths.

This significantly enhances the UX, especially for large trades.
/3 If you didn't hear about Synthetix until now, I recommend you to read this 🧵 first:
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Aug 19
/1 @TeamKujira
, a former Terra project, is one of the most hyped projects in the DeFi space right now.

So today I'll take a look at their L1 platform and see if the fanfare around it is well-deserved.

A 🧵 on the projects that are being built on Kujira chain👇
/2 Kujira is defined as a Cosmos Layer 1 platform for community-selected projects that create true value.

In this 🧵 I'll focus only on the Kujira Ecosystem, but if you want to learn more about the project, check this one first:
/3 FIN Exchange

FIN Exchange, the first app built on top of Kujira L1, was developed by the Kujira team themselves.

It is essentially an order book-style token exchange, aiming to offer a superior trading experience without requiring $KUJI inflationary incentives.
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Aug 18
/1 Options... Why would anyone use them?

How can you make money by leveraging their power?

A 🧵 on how options work👇
/2 Options are contracts that give the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price(called the strike price) at or before the contract expires.

This might sound a little tricky, but I'll try to make it easy to understand.
/3 Before speaking about call and put options, you have to know that there are 2 types of options:

- European Options - may exercise only at expiration

- American Options - can be exercised at any time before the expiration date

What does this mean?
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Aug 17
/1 Are you bullish on options protocols?🤔

@PlutusDAO_io is the biggest governance aggregator for Dopex and Jones DAO.

If you think that these 2 protocols will become successful, you should pay attention to Plutus👀

A 🧵 about Plutus DAO👇
/2 Plutus can be considered the Convex of Dopex and Jones DAO.

The project mission is to accumulate as many veDPX and veJONES as possible.

Recently the team announced that the protocol will also start to acquire esGMX through Plutus Vaults. (more about this later👀).
/3 $PLS stakers will be able to control the veAssets voting power and get bribes in exchange for their votes.

Those who convert their $DPX or $JONES to $plsDPX / $plsJONES on Plutus and stake them receive high rewards mainly paid in $PLS.

$PLS-Plutus governance token
Read 11 tweets

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