I finally found a new DEX that's worth a deep dive into its primitives.
On @InfPools, you can trade with UNLIMITED leverage on any asset, with no liquidation, no oracle.
This innovation will crush mediocre DEXes in space.
It's time to shed light on it + what you can do now.
🧵
On @InfPools, you can trade with UNLIMITED leverage on any asset, with no liquidation, no oracle.
This innovation will crush mediocre DEXes in space.
It's time to shed light on it + what you can do now.
🧵
I believe that understanding what types of projects you should look into is best done during a bear market.
As a result, I present you with InfinityPools.
Keep this on your radar, it has huge potential.
Enjoy Tindorr's ELI5 version ser!
As a result, I present you with InfinityPools.
Keep this on your radar, it has huge potential.
Enjoy Tindorr's ELI5 version ser!
This thread will discover and explain:
• Problem of Current Futures & Leveraged Trading
• Risk Profile Similarity = Best Friends
• Potential Usage of UniswapV3 LP
• InfPools Functionality
• My Bullish Take on This Primitive
• How to Participate Now
• Problem of Current Futures & Leveraged Trading
• Risk Profile Similarity = Best Friends
• Potential Usage of UniswapV3 LP
• InfPools Functionality
• My Bullish Take on This Primitive
• How to Participate Now
1. Problem of Current Futures & Leveraged Trading
"Leveraging traders always get rekt" - said everyone
This is because most of them use too much leverage, which causes liquidation before prices move in that direction.
They lost their cake before getting to eat a big chunk.
"Leveraging traders always get rekt" - said everyone
This is because most of them use too much leverage, which causes liquidation before prices move in that direction.
They lost their cake before getting to eat a big chunk.
"Liquidation = Give my fxxking money back"
This quote should be from the trading platform's and lenders' side.
They don't register to let traders take any of their money but only for create productivity on their assets i.e. yield
This quote should be from the trading platform's and lenders' side.
They don't register to let traders take any of their money but only for create productivity on their assets i.e. yield
The root cause of the problem is the mismatch between "Lenders" and "Traders"
• Lenders do not want any bad debt on their assets, hence they liquidate fast to secure capital
• Traders get rekt earlier than it should be + lose liquidation fee to liquidators
• Lenders do not want any bad debt on their assets, hence they liquidate fast to secure capital
• Traders get rekt earlier than it should be + lose liquidation fee to liquidators
2. Risk Profile Similarity = Best Friends
A risk profile is a risk that only one person can accept.
If the risk profiles of lenders = traders,
It will eliminate the "liquidation" feature from the system.
A risk profile is a risk that only one person can accept.
If the risk profiles of lenders = traders,
It will eliminate the "liquidation" feature from the system.
Now the risk profile of normal lenders is zero; they want 100% of their money back.
The system cannot change user behavior, but it can use the other innovation to adjust toward the lender's risk profile.
It's Uniswap V3 Concentrated Liquidity.
The system cannot change user behavior, but it can use the other innovation to adjust toward the lender's risk profile.
It's Uniswap V3 Concentrated Liquidity.
3. Potential Usage of UniswapV3 LP
InfPools capitalize on Uni V3 features to concentrate liquidity on the lenders' side into the trading pools which traders want to ape in.
The value of the LP will fluctuate in relation to trader's position.
The rest goes to InfPools features.
InfPools capitalize on Uni V3 features to concentrate liquidity on the lenders' side into the trading pools which traders want to ape in.
The value of the LP will fluctuate in relation to trader's position.
The rest goes to InfPools features.
4. InfPools Functionality
It enables traders to trade on the lender's LP without the need for liquidation or an oracle.
It also has permissionless which enhance scalability to the protocol, any tokens can join this platform.
Super innovative.
It enables traders to trade on the lender's LP without the need for liquidation or an oracle.
It also has permissionless which enhance scalability to the protocol, any tokens can join this platform.
Super innovative.
4.1 How it really works:
Lender's LP is used as the main variable in the equation, in order to calculate
• Max. leverage
• Interest rate
• Collateral needed
Lender's LP is used as the main variable in the equation, in order to calculate
• Max. leverage
• Interest rate
• Collateral needed
4.2 Example (given 1 ETH = 1,000 USDC)
A liquidity provider deposits $1,000 USDC into ETH/USDC UniV3 pool (range $900-$1,000)
• I want to go long 1 ETH
• I borrow LP token from InfPool ($1,000 value)
• Redeem to USDC and swap to get 1 ETH
Let's see how this protects capital
A liquidity provider deposits $1,000 USDC into ETH/USDC UniV3 pool (range $900-$1,000)
• I want to go long 1 ETH
• I borrow LP token from InfPool ($1,000 value)
• Redeem to USDC and swap to get 1 ETH
Let's see how this protects capital
Case 1: 1 $ETH > $1,000 USDC
Should have no concern, traders get profit and have collateral back to lender
Should have no concern, traders get profit and have collateral back to lender
Case 2: 900 $USDC < 1 $ETH < 1,000 $USDC
Given now 1 $ETH = 901 USDC which is the amount trader holds
To repay the lender, that trader will need to pay 99 USD in collateral.
(I excluded IL and different portion of assets to ensure understanding, it has its own equation.)
Given now 1 $ETH = 901 USDC which is the amount trader holds
To repay the lender, that trader will need to pay 99 USD in collateral.
(I excluded IL and different portion of assets to ensure understanding, it has its own equation.)
Case 3: 1 $ETH < 900 $USDC
The LP expects traders to give them "1.11 ETH" back.
Remember the risk profile?
When LPer selected a range 900-1000 USDC/ETH, it means they accept the fact that:
If ETH goes below $900, its LP will be out of range and UniV3 will convert to ETH.
The LP expects traders to give them "1.11 ETH" back.
Remember the risk profile?
When LPer selected a range 900-1000 USDC/ETH, it means they accept the fact that:
If ETH goes below $900, its LP will be out of range and UniV3 will convert to ETH.
The trader requires an additional 0.11 ETH and tops up with its leveraged position (1 ETH) in order to return 1.11 ETH to lender.
He needs to use $99 of collateral to convert to 0.11 ETH (at price $900/ETH)
He needs to use $99 of collateral to convert to 0.11 ETH (at price $900/ETH)
You can see that the max. collateral needed is $99 USDC.
Because if price goes lower, he would need less to buy 0.11 ETH back to lender.
And InfPool will calculate for trader since the beginning
Because if price goes lower, he would need less to buy 0.11 ETH back to lender.
And InfPool will calculate for trader since the beginning
As you can see, the closer the range chosen by LPer, the more leverage a trader can enjoy.
I.e. select range 999-1000 USDC, hence trader can use only $1 and go x1000
Because when price is at <999 USDC, lender expects to get 1.00xx ETH which trader can use $1 to buy the residue.
I.e. select range 999-1000 USDC, hence trader can use only $1 and go x1000
Because when price is at <999 USDC, lender expects to get 1.00xx ETH which trader can use $1 to buy the residue.
5. My Bullish Take on This Primitive
This is new and innovative.
I expect some adoption in the future as it'll be open market and permissionless,
The best thing is it's positive-sum game for all parties.
This is new and innovative.
I expect some adoption in the future as it'll be open market and permissionless,
The best thing is it's positive-sum game for all parties.
6. How to Participate Now
Luckily, we're early enough to be the first group of early adopters.
No token yet, testnet coming in late Feb/early March
• Follow its Twitter and Discord
• Keep this project on your radar, trust me it's worth it.
• I'll help inform any updates
Luckily, we're early enough to be the first group of early adopters.
No token yet, testnet coming in late Feb/early March
• Follow its Twitter and Discord
• Keep this project on your radar, trust me it's worth it.
• I'll help inform any updates
This is only the basic concept of how InfPools works in a nutshell.
If you wanna go hard, read this thread and its whitepaper.
drive.google.com
If you wanna go hard, read this thread and its whitepaper.
drive.google.com
TL;DR:
• This primitive is very new and innovative.
• Use UniV3 LP's risk profile to match with trader's risk profile.
• Traders will no longer get liquidated.
• Keep this on your radar. We're still early 👀
• This primitive is very new and innovative.
• Use UniV3 LP's risk profile to match with trader's risk profile.
• Traders will no longer get liquidated.
• Keep this on your radar. We're still early 👀
If you have any defi projects in mind, let's connect. I'm always happy to answer or discuss.
Feel free to share this thread with peers, and follow to be the first to learn about my next gems.
Feel free to share this thread with peers, and follow to be the first to learn about my next gems.
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