Popsicle Finance’s Strategy to DEX Liquidity Supplier Yield Optimization Will Open Up DeFi to a New Set of Customers and Capital
CoinFund’s Funding Thesis for Popsicle Finance
Popsicle Finance is tackling a largely unmet want in yield optimization throughout DEXs, taking a multi-chain strategy that aligns with CoinFund’s thesis of a number of dominant layer 1s. Automated market makers (AMMs) catalyzed an explosion of innovation in DeFi by providing permissionless, peer-to-peer, decentralized token change, with improved liquidity unbounded by frictions of conventional order guide fashions. This was the turning level for DeFi, paving the best way for additional innovation together with lending protocols, governance tokens, yield farming, DEX aggregators, derivatives, and yield optimizers. These new primitives have created two main types of productive crypto belongings: the AMM DEX liquidity supplier (LP) positions that earn buying and selling charges from swaps, and the staked DeFi governance tokens which accrue protocol earnings. LP positions have emerged as an asset class of their very own, with $13.5B of TVL on simply Uniswap v2, Uniswap v3, Sushiswap, and Balancer on Ethereum, and billions extra on DEXs throughout Solana, Terra, Polygon, Fantom, BSC, and Avalanche. To successfully deploy capital, liquidity suppliers should weigh TVL in a pool vs. common buying and selling exercise (capital effectivity), governance token incentives by DEX, impermanent loss and hedging dynamics, and vary administration for concentrated liquidity provisioning. Popsicle Finance is constructing a multi-chain yield optimization community for DEX liquidity suppliers to eradicate a lot of this complexity, which we consider will enormously increase the addressable market and enhance returns for this asset class. The challenge has centered initially on two product choices, Sorbetto Fragola and Sorbetto Limone. These companies will allow liquidity provisioning to increase from a person base primarily made up of early and extremely technical crypto market members to a world mainstream viewers of yield looking for buyers.
Sorbetto Fragola is an automatic Uniswap V3 liquidity supervisor. Uniswap V3 concentrated liquidity provisioning was a significant innovation in AMM design, permitting customers to offer liquidity in particular value ranges versus throughout all the curve.² Nevertheless, it requires vital monitoring and could be cost-prohibitive for smaller LPs to actively handle. By using Popsicle, Sorbetto Fragola programmatically allocates liquidity to the optimum vary depending on value motion and by aggregating LP positions, it considerably reduces gasoline expenditures. Uniswap V3 is the #1 DEX by quantity on Ethereum and has $1.2B in each day quantity, $2.6B in TVL, and $2MM in charges generated each day for its liquidity suppliers.² Of that $2.6B in TVL, lower than 1% is at present directed by automated liquidity administration protocols.³
Sorbetto Limone is taking the Fragola device set and bringing it cross-DEX and multi-chain. Limone will optimize yield throughout liquidity swimming pools by shifting deposited belongings to the swimming pools with the very best yield. The salient function is that this works throughout a number of DEXs and blockchains, using bridges to shift capital to the very best yielding DEX pool on any supported blockchain. Limone will use customized oracles to think about capital effectivity, yield farming incentives, transaction prices, and several other different key traits to get prospects the perfect yield. Whereas different DeFi protocols equivalent to Yearn Finance have made main improvements in and attracted vital capital tackling yield optimization for lending protocols and stableswap DEXs, Popsicle is main innovation for yield optimization in AMM DEX LP positions.
The Popsicle staff is betting on a multi-chain future for the DeFi area. The community, along with its token, referred to as $ICE, is at present lively throughout Ethereum, Fantom, Avalanche, and BSC. Deployments on Arbitrum, Moonriver, Polygon, and Solana are additionally deliberate. Popsicle was one of many first tasks to implement cross-chain governance, with token holders on Ethereum, Fantom, and BSC all capable of vote on proposals. Furthermore, it can leverage composability to additional improve its product, utilizing the primitives developed by sister challenge Abracadabra ($SPELL) and its decentralized stablecoin $MIM. MIM is minted collateralized by yield bearing belongings, and sooner or later, Popsicle customers will have the ability to leverage their publicity to liquidity provisioning by minting MIM collateralized towards their Popsicle managed liquidity supplier positions.
Whereas the product and imaginative and prescient stand out, what actually units Popsicle aside is the staff and group. The staff, led by Daniele Sestagalli and Squirrel Crypto, has a long run imaginative and prescient and is working to construct merchandise not only for as we speak however for 1, 2, 5, and 10 years from now. They’re intensely iterative, grounded in person suggestions and their very own experiences as long-time DeFi builders and customers. Furthermore, they’re one of the prolific groups constructing in DeFi as we speak, creating not solely Popsicle Finance but in addition Abracadabra and Wonderland, every working collectively as puzzle items in direction of their long run DeFi imaginative and prescient. Additional, they’ve helped develop one of the distinctive, lively, and supportive communities in crypto. The Isvikingers (because the group is understood), are lively in pushing the challenge ahead, with excessive participation charges in governance, driving strategic discussions on Discord, and serving to to tell the product roadmap. This was by no means extra obvious than following the hack that occurred in August (Popsicle had accomplished two audits previous to the hack). Though a particular setback, it impressed the staff and group to dig deeper and construct larger. Sentiment by no means soured and a sturdy plan was accredited to compensate these affected.
As Popsicle prepares for the upcoming relaunch of its Sorbetto Fragola product, it has finalized two further audits, applied excessive profile bug bounty packages, and has introduced a key strategic relationship with Perpetual Protocol. Popsicle Finance’s strategy to yield optimization for the availability facet of capital to DEXs will open up the ecosystem to new efficiencies and onboard new customers. We couldn’t be extra excited by what’s to come back within the close to, medium, and long run and sit up for working as an lively supporter with the staff and the Isvikinger group to drive the challenge ahead!
uniswap.org/weblog/uniswap-v3/information.uniswap.org, information from Sep 23–30, 2021defillama.com
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Popsicle Finance’s Strategy to DEX Liquidity Supplier Yield Optimization Will Open Up DeFi to a New… was initially revealed in The CoinFund Weblog on Medium, the place persons are persevering with the dialog by highlighting and responding to this story.