Thread by @xpnp404

1/ 'Pulsar', #DotSama product you should keep an eye on from the collaboration @StellaSwap and @CryptoAlgebra

Pulsar will introduce Concentrated Liquidity :
• For traders low slippage
• For LPer more fee reward
• $STELLA to 0 token emission

Here things you should know 🦄

2/ Overview :

1. StellaSwap is a hybrid DEX built natively on @MoonBeamNetwork
2. Algebra is a concentrated liquidity protocol built on @0xPolygon, their innovative product can be integrated on DEXs (required the license)

3/ If you are in DeFi space for awhile, you may notice that most well-known DEXs which use UniSwap v2 model has started to switch to V3 model (e.g. Trader Joe) to reduce their token emission.

v2 token model is doomed to go to 0 due to its emission.

4/ Will you provide liquidity if everyone is doing the same thing?

Worst case, the reward token does not have any utilities or buyback periodically from team, it will just be a race game bc the token will consistently be dumped.

Who wants to hold? and join governance vote?

5/ With V3 model, $STELLA token emission will be heavily reduced.. Instead, rewards will be paid more in fees

Example :
ETH-DAI Pair 👉 Rewards paid in both ETH and DAI

Note: Providing Liquidity on V3 is not 50-50 all the time.

6/ Not only V3 model prevents token slowly going to 0, and reward paid in trading fee #RealYield but it also offers competitive trading with low slippage

as LPer use v3 to 'concentrate' their liquidity to a specific price range.

7/ In addition, while providing liquidity on StellaSwap v3, you also get ETH/DAI trading fee as rewards with stoploss and take profit options. 🤌

8/ Stoploss and Take Profit with reward
From the previous image:

• If $ETH price is below 1509.7, 100% of my pair will be ETH.
• If $ETH price trading between 1509-1954, I still have my pair providing liquidity.
• If $ETH price is above 1954, 100% of my pair will be DAI.

9/ But why V3 now?

Very likely the reason behind Stella V3 is to prepare StellaSwap for upcoming UniSwap integration on Moonbeam which might steal its market share and to be the first Concentrated Liquidity on Polkadot Ecosystem 💪

10/ Resource you can learn more about UniSwap V3 :
@guil_lambert has very good thread to simplify v3 model with useful tools.

https://twitter.com/guil_lambert/status/1564988757782265857?s=20&t=QQTKLCy29SPX-LUNM0YNiQ

That’s it for today.

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