Cloned assets play a crucial role in expanding liquidity across non-native token markets.
But what exactly are cloned assets and how do they streamline liquidity?
Let’s find out!
CLONED ASSETS, WHAT ARE THEY?!
Cloned assets, as the name suggests, are replicated versions of existing assets on other blockchains.
They're unique digital assets created on Clone protocol to mirror the price movements of their non-native counterparts. They basically replicate existing on-chain assets from other blockchain ecosystems onto Solana network.
These clAssets serve as the foundation of Clone's ecosystem, enabling users to access a diverse range of markets within a single platform.
CLONE PROTOCOL - THE BRAIN
Clone Protocol is the DeFi platform built on Solana that enables the creation of cloned assets. They leverages the Comet Liquidity System, to streamline the process of onboarding non-native token liquidity to Solana.
Clone Protocol also provides users with access to a wide range of markets and trading opportunities within a single platform, allowing them to manage their crypto investment portfolios efficiently.
WHY CLONE PROTOCOL?
Clone Protocol offers a comprehensive solution for DeFi on Solana, comprising two primary interfaces:
● Clone Liquidity and
● Clone Markets.
Clone Liquidity introduces users to the Comet Liquidity System, ensuring efficient liquidity provision with minimal capital requirements.
On the other hand, Clone Markets provide a seamless trading experience, allowing users to buy and sell clAssets with instant settlement and zero counterparty risk.
WHAT IS THEIR VISION?!
The vision of Clone Protocol is to democratize finance and revolutionize liquidity solutions, driving mass adoption of Solana by introducing liquid markets for non-native assets.
At its core, Clone aims to create a scalable, efficient and universally accessible exchange that offers opportunities for everyone, regardless of their location or socioeconomic status, to engage with a broad array of on-chain assets.
Beyond technological innovation, Clone Protocol is driven by a mission to enhance financial accessibility and inclusivity while fostering vibrancy in solana DeFi ecosystem.
ELI5 - THE COMET LIQUIDITY SYSTEM
The Comet Liquidity System facilitates the efficient scaling of cloned assets to new non-native token markets on Solana. It draws inspiration from the concept of concentrated liquidity Market Makers (CLMM) introduced by Uniswap V3.
In this system, Liquidity Providers concentrate their liquidity within specific price ranges, creating "Comets" as liquidity positions backed by collateral. LPs deposit collateral and specify the amount of collateral and clAssets they wish to borrow and contribute within a Comet.
The efficiency of the Comet Liquidity System lies in LPs' ability to tailor liquidity provision strategies to specific price ranges, optimizing yield potential while managing risk. By concentrating liquidity within narrow price ranges, LPs potentially earn higher yields, albeit with increased risk.
This flexibility allows cloned assets to scale quickly to new non-native token markets on Solana. LPs can easily create Comets for various clAsset pools, providing liquidity in a targeted manner that aligns with market demand.
The cross-margin and single-sided nature of Comet liquidity positions enable LPs to support liquidity across multiple clAsset pools simultaneously, maximizing capital efficiency.
Read more on comet liquidity system: https://twitter.com/CloneProtocol/status/1745312602492985824?t=A-7m-1kEclu4prGUunTMDQ&s=19
HOW DO CLONED ASSETS STREAMLINE ONBOARDING NON-NATIVE TOKEN LIQUIDITY?
Clone's Comet Liquidity System plays a crucial role in streamlining the onboarding process for non-native token liquidity. This system operates by enabling the creation of highly liquid markets for clAssets with minimal capital requirements. Here's how it works:
Capital-Efficient Market Creation: Instead of requiring large amounts of liquidity upfront, the Comet Liquidity System utilizes a unique bonding mechanism. Users can stake their existing Solana (SOL) tokens to mint synthetic clAssets that track the price of the target non-native asset. This eliminates the need for large pools of the non-native token itself, making market creation more accessible and capital-efficient.
Dynamic Liquidity Adjustments: The system continuously monitors and adjusts the liquidity pools for each clAsset based on market activity. This ensures that sufficient liquidity is always available to meet user demand, even for less popular assets.
Fast Market Creation: By reducing the capital requirements and streamlining the liquidity provisioning process, the Comet Liquidity System enables Clone to add new markets for non-native tokens quickly and efficiently. This expands the trading opportunities available to users.
THE FUTURE OF CLONED ASSETS
Cloned assets represent a significant innovation in the DeFi space, offering a unique solution for onboarding non-native token liquidity and expanding trading opportunities. As the Clone platform continues to develop, we can expect to see even more use cases and benefits emerge for clAssets.
Congratulations if you made it here; this has been Drey’s pen. For those of us who would like to try out the Clone Protocol platform, I’d keep us updated because at the moment, Clone Protocol is still on a private mainnet, and only whitelisted users are allowed on the platform, but for the moment you can join their discord and also follow them on Twitter using the links below to stay updated.
Twitter: https://x.com/CloneProtocol?t=2Ns27Tlm0U6AF_ZxDr8H2Q&s=09
Discord: https://discord.gg/BXAeVWdmmD
➤ EXTRAS:
▶️ Staking on Solana, This guide aims to compare the intricacies of staking on Solana with several other notable PoS networks, including Ethereum, Cosmos, SUI and Avalanche: https://docs.google.com/document/d/1U6MoHTXSsCd0MJeSrN5L7tY-P9KagYcbdJSCiG_i_3U/edit?usp=drivesdk
▶️Token extensions on Solana, This article delves into the workings, potential and transformative impact of token extensions, exploring how they unlock possibilities beyond the reach of traditional financial instruments: https://medium.com/@Dreyville_Crypt/token-extensions-programmable-money-takes-flight-on-solana-cd345d21793f
