Layer 2 season is one of the strongest crypto narratives, and I think it will be comparable to layer 1 season last bullrun
But each Layer 2 needs a flagship protocol for the ecosystem to thrive
A comparison of @optimismFND and @arbitrum flagship protocols and ecosystems
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But each Layer 2 needs a flagship protocol for the ecosystem to thrive
A comparison of @optimismFND and @arbitrum flagship protocols and ecosystems
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1/
There are plenty of threads explaining the technical differences, TVL comparisons, token incentives, wen airdrop, tx numbers etc etc but this thread is about ecosystems and synergies for the optimistic rollups
There are plenty of threads explaining the technical differences, TVL comparisons, token incentives, wen airdrop, tx numbers etc etc but this thread is about ecosystems and synergies for the optimistic rollups
2/
Short summary
โ ๏ธ $OP got token and delivering continous airdrop
โ ๏ธ $OP bedrock coming soon
โ ๏ธ $ARBI wen airdrop?
โ ๏ธ $ARBI nitro deployed
โ ๏ธ $ARBI got higher TVL $1bn vs $550m
โ ๏ธ $ARBI got more activity but very close
โ ๏ธ tx fees low on both
Short summary
โ ๏ธ $OP got token and delivering continous airdrop
โ ๏ธ $OP bedrock coming soon
โ ๏ธ $ARBI wen airdrop?
โ ๏ธ $ARBI nitro deployed
โ ๏ธ $ARBI got higher TVL $1bn vs $550m
โ ๏ธ $ARBI got more activity but very close
โ ๏ธ tx fees low on both
3/
But for a Layer 2 to thrive a chain-specific ecosystem needs to be built.
In this thread i will not look into mainnet eth protocols who deploy on layer 2s, but the native flagship protocols and the ecosystems built around them
But for a Layer 2 to thrive a chain-specific ecosystem needs to be built.
In this thread i will not look into mainnet eth protocols who deploy on layer 2s, but the native flagship protocols and the ecosystems built around them
4/
๐ดโจ Optimism
On Optimism the native flagship protocols are @synthetix_io $SNX and @VelodromeFi $VELO
๐ดโจ Optimism
On Optimism the native flagship protocols are @synthetix_io $SNX and @VelodromeFi $VELO
5/
Synthetix is a decentralized synthetic asset issuance protocol. Users can use $SNX to mint synthetic $sUSD $sETH $sBTC that traces the price of the assets via chainlink oracles
(Yes i know they started on mainnet, but they are all-in on Optimism now)
Synthetix is a decentralized synthetic asset issuance protocol. Users can use $SNX to mint synthetic $sUSD $sETH $sBTC that traces the price of the assets via chainlink oracles
(Yes i know they started on mainnet, but they are all-in on Optimism now)
6/
All protocols in the the $SNX ecosystem drives fees to $SNX stakers
Look out for..
Atomic Swaps v2
Synthetix v3
Perps v2
Teleporters
All protocols in the the $SNX ecosystem drives fees to $SNX stakers
Look out for..
Atomic Swaps v2
Synthetix v3
Perps v2
Teleporters
7/
The synthetix ecosystem has grown exponentially the last years and now consist of
@kwenta_io $KWENTA - on-chain perps
@lyrafinance $LYRA - on-chain options
@PolynomialFi - Options vaults
@aelinprotocol $AELIN - Fundraising and OTC deals
The synthetix ecosystem has grown exponentially the last years and now consist of
@kwenta_io $KWENTA - on-chain perps
@lyrafinance $LYRA - on-chain options
@PolynomialFi - Options vaults
@aelinprotocol $AELIN - Fundraising and OTC deals
8/
@thalesmarkets $THALES - Parimutuel Market
@overtimemarkets - Sports betting
@dhedgeorg - on-chain hedge funds and hedging of SNX debt
@credit to @mastermojo83 for the graphics
@thalesmarkets $THALES - Parimutuel Market
@overtimemarkets - Sports betting
@dhedgeorg - on-chain hedge funds and hedging of SNX debt
@credit to @mastermojo83 for the graphics
9/
@velodromefi $VELO is the first ve(3,3) dex solidly fork that have achieved success and enabling an actual flywheel.
It acts as the liquidity hub on Optimism and acts as the onboarding portal for new- and multichain projects as a gateway to optimism. Onboarded 30 protocols
@velodromefi $VELO is the first ve(3,3) dex solidly fork that have achieved success and enabling an actual flywheel.
It acts as the liquidity hub on Optimism and acts as the onboarding portal for new- and multichain projects as a gateway to optimism. Onboarded 30 protocols
10/
The team have done a killer job of Business Development getting protocols involved in the races of establishing sizeable veVELO positions and bribes to vote for emissions.
The team have done a killer job of Business Development getting protocols involved in the races of establishing sizeable veVELO positions and bribes to vote for emissions.
11/
Capital efficiency in attracting liquidity is extremely important for protocols establishing on a new chain.
This increases team runway and allows them to focus on the actual development
Capital efficiency in attracting liquidity is extremely important for protocols establishing on a new chain.
This increases team runway and allows them to focus on the actual development
12/
It has also started to appear Velo-native protocols who build their protocol and tokenomics based on velodrome bribes and liquidity incentives
It has also started to appear Velo-native protocols who build their protocol and tokenomics based on velodrome bribes and liquidity incentives
13/
@Sonnefinance $SONNE - Lending/borrowing protocol with real yield staking rewards based on POL on velodrome and large tokenomics allocation for Bribes
@openxswap $OPENX - Perpetual Bonds and liquid wrappers
@beefyfinance $BIFI - beVELO wrapper
@Sonnefinance $SONNE - Lending/borrowing protocol with real yield staking rewards based on POL on velodrome and large tokenomics allocation for Bribes
@openxswap $OPENX - Perpetual Bonds and liquid wrappers
@beefyfinance $BIFI - beVELO wrapper
14/
@TarotFinance $TAROT - leverage farming vaults
@bytemasons $OATH - $veVELO autocompounding vault
@TarotFinance $TAROT - leverage farming vaults
@bytemasons $OATH - $veVELO autocompounding vault
15/
Velodrome is an integral part of Optimism in general but is also important for Synthetix as it allows for deep liquidity for synthetic asset pairs used by atomic swaps
The majority of Synthetix ecosystem utilizes Velodrome for liquidity
Velodrome is an integral part of Optimism in general but is also important for Synthetix as it allows for deep liquidity for synthetic asset pairs used by atomic swaps
The majority of Synthetix ecosystem utilizes Velodrome for liquidity
16/
"But ser - people are only using Optimism for the $OP rewards"
This might be true, time will tell. But many users are only using arbitrum for the airdrop as well
"But ser - people are only using Optimism for the $OP rewards"
This might be true, time will tell. But many users are only using arbitrum for the airdrop as well
17/
All around i feel the Optimism ecosystem has a great variety of protocols and there are synergies all around. Greatly helped by the Optimism grants of $OP tokens, which make yields very good.
All around i feel the Optimism ecosystem has a great variety of protocols and there are synergies all around. Greatly helped by the Optimism grants of $OP tokens, which make yields very good.
18/
I don't understand why there aren't more farmers joining Optimism to sluuurp up the $OP rewards..
But oh well more for me
I don't understand why there aren't more farmers joining Optimism to sluuurp up the $OP rewards..
But oh well more for me
20/
@GMX_IO is a decentralized leverage trading protocol which uses $GLP Liquidity Pool token of stables, ETH and BTC for facilitating no slippage leverage trading
Look out for release of synthetic assets on $GMX which will open up for a lot more variety of trading pairs
@GMX_IO is a decentralized leverage trading protocol which uses $GLP Liquidity Pool token of stables, ETH and BTC for facilitating no slippage leverage trading
Look out for release of synthetic assets on $GMX which will open up for a lot more variety of trading pairs
21/
Protocol fees from trading fees and taking the oposite side of trades from leverage degens have led to extremely high yields. 28% APR currently with $400m TVL
Protocol fees from trading fees and taking the oposite side of trades from leverage degens have led to extremely high yields. 28% APR currently with $400m TVL
22/
GMX is one of the reasons for the real yield narrative, and led the way with 100% revenue share to stakers and LPs
The composability of the $GLP token is one of the main building blocks for many defi protocols on arbitrum, and the GMX ecosystem consist of:
GMX is one of the reasons for the real yield narrative, and led the way with 100% revenue share to stakers and LPs
The composability of the $GLP token is one of the main building blocks for many defi protocols on arbitrum, and the GMX ecosystem consist of:
23/
@umamifinance $UMAMI - Delta-neutral yield vaults based on GLP
@GMDprotocol $GMD - Delta-neutral yield vaults based on GLP
@rage_trade $RAGE - risk on/risk off Delta-neutral yield vaults based on GLP and lending
@KostrenFinance $KTN - POL yield aggregator incl GLP
@umamifinance $UMAMI - Delta-neutral yield vaults based on GLP
@GMDprotocol $GMD - Delta-neutral yield vaults based on GLP
@rage_trade $RAGE - risk on/risk off Delta-neutral yield vaults based on GLP and lending
@KostrenFinance $KTN - POL yield aggregator incl GLP
24/
@DAOJonesOptions $JONES - jGLP Liquidation-proof smart leverage on GLP
@dopex_io $DPX - GMX option based liquidation protection
@vestafinance $VSTA - Stablecoin with yield bearing $GLP backing
@plutusdao $PLS - plsGLP yield bearing GLP wrapper
And probably many many more..
@DAOJonesOptions $JONES - jGLP Liquidation-proof smart leverage on GLP
@dopex_io $DPX - GMX option based liquidation protection
@vestafinance $VSTA - Stablecoin with yield bearing $GLP backing
@plutusdao $PLS - plsGLP yield bearing GLP wrapper
And probably many many more..
25/
@dopex_io is a on-chain decentralized options protocol that uses an AMM to price options
They are building extremely innovative and capital efficient solutions with their Atlantic Options suite where they can borrow and use the collateral of an open Option position
@dopex_io is a on-chain decentralized options protocol that uses an AMM to price options
They are building extremely innovative and capital efficient solutions with their Atlantic Options suite where they can borrow and use the collateral of an open Option position
26/
Look out for :
$rDPX v2 with stablecoin $dpxUSD and other synthetic assets
More Atlantic Products
GMX liquidation protection
Diamond pepes
Look out for :
$rDPX v2 with stablecoin $dpxUSD and other synthetic assets
More Atlantic Products
GMX liquidation protection
Diamond pepes
27/
Protocols are building strategies and wrappers around Dopex vaults building out an ecosystem
@DAOjonesoptions $JONES - Options strategies and yield bearing vaults as liquid wrappers
@plutusdao $PLS - veDPX liquid wrapper
Diamond Pepes - strong Nft community
Protocols are building strategies and wrappers around Dopex vaults building out an ecosystem
@DAOjonesoptions $JONES - Options strategies and yield bearing vaults as liquid wrappers
@plutusdao $PLS - veDPX liquid wrapper
Diamond Pepes - strong Nft community
28/
@dsquaredfinance $DSQ - Quant Vaults built on DPX, trades options on DPX and hedges on GMX
@dsquaredfinance $DSQ - Quant Vaults built on DPX, trades options on DPX and hedges on GMX
29/
As we can see the high volume for perp dexes are really the major driver in the Armitrum ecosystem. Allowing protocols to build on top of others, connecting the defi legos and serving users real yield
Arbitrum is full of yield bearing wrappers and it all relies on GMX.
As we can see the high volume for perp dexes are really the major driver in the Armitrum ecosystem. Allowing protocols to build on top of others, connecting the defi legos and serving users real yield
Arbitrum is full of yield bearing wrappers and it all relies on GMX.
30/
Arbitrum does not have a token yet we can assume that many of the users are there snooping for an airdrop.
Lets hope they open their eyes for the emerging real yield ecosystem and stick around.
Arbitrum does not have a token yet we can assume that many of the users are there snooping for an airdrop.
Lets hope they open their eyes for the emerging real yield ecosystem and stick around.
31/
Liquidity is quite fragmented on Arbitrum with large pockets of liquidity on SUSHI, UNISWAP, CURVE and BALANCER
No native arbitrum dex has emerged as a clear winner like we normally see on L1s
Lets see who wins the battle of becoming the dominant dex
Liquidity is quite fragmented on Arbitrum with large pockets of liquidity on SUSHI, UNISWAP, CURVE and BALANCER
No native arbitrum dex has emerged as a clear winner like we normally see on L1s
Lets see who wins the battle of becoming the dominant dex
32/
To summarize we se a more diverse ecosystem on Optimism built around the flagship protocols, but there is still not an abundance of wrapped wrappers wrapping wrappers like we see on Arbitrum.
To summarize we se a more diverse ecosystem on Optimism built around the flagship protocols, but there is still not an abundance of wrapped wrappers wrapping wrappers like we see on Arbitrum.
33/
Volumes are a lot lower on Optimism so the real yield narrative is not living in the same life as on Arbitrum. But the dependence of GMX and GLP on Arbitrum is something we might have to worry about.
Volumes are a lot lower on Optimism so the real yield narrative is not living in the same life as on Arbitrum. But the dependence of GMX and GLP on Arbitrum is something we might have to worry about.
34/
What if the doomsday predictions of Avi abusing and draining GLP comes true, or volume moves elsewhere? Not all perp solutions are as composable as GMX
What if the doomsday predictions of Avi abusing and draining GLP comes true, or volume moves elsewhere? Not all perp solutions are as composable as GMX
35/
I migrated to Layer 2 about 6 months ago and have no reason to leave soon. I'm practically split 50/50 between Arbitrum and Optimism now
I migrated to Layer 2 about 6 months ago and have no reason to leave soon. I'm practically split 50/50 between Arbitrum and Optimism now
36/
In layer1 season all we saw was forks of ethereum defi protocols, with minor changes in tokenomics. Now we get to see real innovation built on top of the flagship protocols. Things that aren't easily forked.
You can fork GMX but you cant fork the GLP yield..
In layer1 season all we saw was forks of ethereum defi protocols, with minor changes in tokenomics. Now we get to see real innovation built on top of the flagship protocols. Things that aren't easily forked.
You can fork GMX but you cant fork the GLP yield..
37/
I'm actually excited for the zero knowledge layer 2s to come alive, to see which protocols becomes the flagships there and how the ecosystem evolves
Layer 2 season is only just beginning, and if you are reading this you are here for it!
I'm actually excited for the zero knowledge layer 2s to come alive, to see which protocols becomes the flagships there and how the ecosystem evolves
Layer 2 season is only just beginning, and if you are reading this you are here for it!
38/
Tagging some layer2 enjoyooors and defi gigabrains I use as inspiration
@DeFi_Dumbledore
@LouisCooper_
@rektdiomedes
@andrewsaunders
@BarryFried1
@TheDeFinvestor
@crypto_linn
@WinterSoldierxz
@defi_mochi
@napgener
@0x_____________
@wagmialex
@completedegen
Tagging some layer2 enjoyooors and defi gigabrains I use as inspiration
@DeFi_Dumbledore
@LouisCooper_
@rektdiomedes
@andrewsaunders
@BarryFried1
@TheDeFinvestor
@crypto_linn
@WinterSoldierxz
@defi_mochi
@napgener
@0x_____________
@wagmialex
@completedegen
39/
Some more layer2 enjoyooors and defi gigabrains
@adamscochran
@RiddlerDeFi
@xpnp404
@crypto_condom
@FroyoFren
@ChadCaff
@jack_anorack
@Dynamo_Patrick
@MattLosquadro
Some more layer2 enjoyooors and defi gigabrains
@adamscochran
@RiddlerDeFi
@xpnp404
@crypto_condom
@FroyoFren
@ChadCaff
@jack_anorack
@Dynamo_Patrick
@MattLosquadro
40/
If you like this thread, follow me @Slappjakke for more alpha and deep dives into the Layer 2 world
Like/Retweet the first tweet below if you can:
If you like this thread, follow me @Slappjakke for more alpha and deep dives into the Layer 2 world
Like/Retweet the first tweet below if you can:
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