@arbitrum is full of gems with
1. @GMX_IO -king of Perps with crypto
2. @GainsNetwork_io -king of Perps with forex and stocks
3. @lyrafinance - king of options for $btc/$eth
4. @dopex_io - king of option vaults
And soon @GammaSwapLabs king of Perps for LP's
1. @GMX_IO -king of Perps with crypto
2. @GainsNetwork_io -king of Perps with forex and stocks
3. @lyrafinance - king of options for $btc/$eth
4. @dopex_io - king of option vaults
And soon @GammaSwapLabs king of Perps for LP's
Being an LP on a dex like uniswap is basically the same as getting paid to hold a short straddle position.
It doesnt take long to realize this can be a big problem especially when one of the assets rips to the downside or upside leaving the liquidity provider with a bag of Worthless tokens..... (think the DEFI food farms)
Enter Gamma-swap, This protocol is seeking to create a market place around LP's that allows traders to be long or short LP volatility.
Lets say for example I think the uni-eth pair will be extremely volatile, I can open a position on gammaswap by borrowing the LP assets using $eth, $uni or both assets as collateral
After I borrow the tokens, I now have a balance priced in the LP tokens. To execute the short position I can withdraw the assets from the LP.
As you can see here if
$uni went from 5$ to 10$ and $eth stayed at 1k
I would have a value of 1500$ if I just held or a value of $1414 if I provided liquidity
$uni went from 5$ to 10$ and $eth stayed at 1k
I would have a value of 1500$ if I just held or a value of $1414 if I provided liquidity
So effectively I can buy back the Lp token with less money and pocket the difference minus borrow and LP fees.
$85.79 - swap fees- loan interest
$85.79 - swap fees- loan interest
I can also create customize the strategy and create more directionality if Im more bullish eth over uni by providing more eth as collateral and selling the uni for eth from the LP that I borrow.
If I was short volatility (this is what a uniswap Lp position is), I can boost my yield by using gamma swap by getting uniswap LP fees as well as interest from those that are long gamma (volatility)
Dont worry if this seems like too much to place a strategy, there will be 1 click vaults that deploy these strategies. This is just whats happening on the back end
In summary IMO this will create a win win situation for everyone by allowing
1. LP's to earn more to help compensate with IL
2. Allow LP's to hedge position
3. Allow traders to profit from volatility
1. LP's to earn more to help compensate with IL
2. Allow LP's to hedge position
3. Allow traders to profit from volatility
Be sure to give it a test, who knows there may be an airdrop
tagging some Degens
@ipor_intern
@thedefiedge
@Dynamo_Patrick
@crypto_condom
@CryptoKaduna
@DAdvisoor
@rektdiomedes
@ThorHartvigsen
@milesdeutscher
@LouisCooper_
@Curious__J
@DeFi_Cheetah
tagging some Degens
@ipor_intern
@thedefiedge
@Dynamo_Patrick
@crypto_condom
@CryptoKaduna
@DAdvisoor
@rektdiomedes
@ThorHartvigsen
@milesdeutscher
@LouisCooper_
@Curious__J
@DeFi_Cheetah
@Slappjakke makes a killer thread here
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