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What's Cooking in the Contango Kitchen?
Contango, in its essence, is a decentralized protocol offering a unique derivative product known as cPerps (Contango perps). This platform has creatively harnessed the power of both spot and money markets to automate the process of looping, a method previously used manually in DeFi for leveraging exposure to assets.
The Magic of Minimal Price Impact
One of the most striking features of Contango is its ability to offer minimal price impact by aggregating over $20 billion in liquidity from spot and money markets. The protocol ensures deep liquidity, a boon for traders seeking to execute large orders without causing significant price ripples.
Funding Rate Stability: A Quiet Sea in the Stormy World of DeFi
In the volatile seas of DeFi, Contango stands out with its remarkably stable funding rates, often 20 times less volatile than those of its competitors like dYdX. The Net APR on Contango (which is equivalent to a funding fee) is determined by leverage and by the borrowing and lending rates of the chosen money market. Contango did a study and showed that Aave rates are less volatile than dydx funding fees on average (see the source
https://medium.com/contango-xyz/an-introduction-to-cperps-4dbb4a58b602
.
Taking the Leap: Going Multi-Chain
Expanding its horizons, Contango is embracing a multi-chain approach, promising a wide range of leverage by tapping into various money markets across different blockchain networks. This move not only diversifies its offering but also broadens its appeal to a more extensive user base.
For the Love of Rewards: Farm While You Trade
In a typical DeFi twist, Contango ensures that traders can earn rewards from the underlying money markets simply by trading on the platform. This innovative feature makes Contango an attractive proposition for yield farmers looking to maximize their returns.
Who Stands to Gain from Contango?
The platform caters to a diverse group of DeFi users, including traditional traders who value deep liquidity and lower fees, loopers (those engaged in recursive lending and borrowing), and farmers who are into reward accumulation through trading activities.
Use Cases: Speculation, Hedging, and Arbitrage
Contango serves multiple purposes in the DeFi space:
Speculation: Users can speculate on asset prices, either going long or short based on their market expectations.
Hedging: It offers a way to hedge investments against market fluctuations, balancing risks effectively.
Arbitrage: The platform presents unique arbitrage opportunities between the various APRs present on Contango, among the various markets and chains listed.
Navigating the Risks
Despite its innovative features, using Contango is not without risks. These include market risk, interest rate risk, and the inherent risks associated with smart contracts.
Tokenomics: The Future is Yet to Unfold
Currently, Contango does not have its own token, but plans are underway for a Token Generation Event (TGE) with a total supply of 1 billion tokens. This strategic move is expected to further integrate the protocol into the wider DeFi ecosystem
Venture Capital and Financial Backing
Contango has garnered significant attention and backing from a variety of venture capital firms and angel investors. Notable venture capitals supporting the platform include Parafi, Advanced Blockchain AG, Dlab, AngelDAO Ventures, Spartan, Coinbase Ventures, Jets Capital, Cogitent Ventures, and BBS Finance. Additionally, trading houses like Amber, GSR, Cumberland, and CMS have shown their interest and support for the platform. The diverse array of backers indicates strong industry faith in Contango's potential and innovative approach.
Angels in the Mix
The involvement of angel investors further strengthens the project's foundation. These include figures such as Alex from Debridge Finance, Andrew from MakerDAO, Brian from Solidity Ventures, Tunez from CryptoTunez, and many others. These individuals bring their unique insights and experiences from various sectors of the crypto and DeFi world, adding immense value to the Contango ecosystem.
The Brains Behind the Operation
At the helm of Contango is CEO Kamel Aouane, who co-founded the platform with Bruno Bonanno and Egill Hreinsson. Aouane, in particular, has been vocal about the platform's capabilities and future plans. He emphasizes Contango's native approach to leveraging assets on-chain and estimates that more than half of the volumes on lending markets are due to looping. Aouane also mentions plans for integrating with other money market protocols like Compound, Spark and Morpho, envisioning a significant expansion of the DeFi derivative market.
A Glimpse into the Future
Contango is not just another DeFi protocol; it's a blend of innovation, expert backing, and a team with a clear vision for the future of decentralized finance. As the platform continues to evolve and integrate with various protocols and expand its offerings, it stands as a testament to the dynamic and revolutionary nature of blockchain technology and DeFi.
What's Cooking in the Contango Kitchen?
Contango, in its essence, is a decentralized protocol offering a unique derivative product known as cPerps (Contango perps). This platform has creatively harnessed the power of both spot and money markets to automate the process of looping, a method previously used manually in DeFi for leveraging exposure to assets.
The Magic of Minimal Price Impact
One of the most striking features of Contango is its ability to offer minimal price impact by aggregating over $20 billion in liquidity from spot and money markets. The protocol ensures deep liquidity, a boon for traders seeking to execute large orders without causing significant price ripples.
Funding Rate Stability: A Quiet Sea in the Stormy World of DeFi
In the volatile seas of DeFi, Contango stands out with its remarkably stable funding rates, often 20 times less volatile than those of its competitors like dYdX. The Net APR on Contango (which is equivalent to a funding fee) is determined by leverage and by the borrowing and lending rates of the chosen money market. Contango did a study and showed that Aave rates are less volatile than dydx funding fees on average (see the source
https://medium.com/contango-xyz/an-introduction-to-cperps-4dbb4a58b602
.
Taking the Leap: Going Multi-Chain
Expanding its horizons, Contango is embracing a multi-chain approach, promising a wide range of leverage by tapping into various money markets across different blockchain networks. This move not only diversifies its offering but also broadens its appeal to a more extensive user base.
For the Love of Rewards: Farm While You Trade
In a typical DeFi twist, Contango ensures that traders can earn rewards from the underlying money markets simply by trading on the platform. This innovative feature makes Contango an attractive proposition for yield farmers looking to maximize their returns.
Who Stands to Gain from Contango?
The platform caters to a diverse group of DeFi users, including traditional traders who value deep liquidity and lower fees, loopers (those engaged in recursive lending and borrowing), and farmers who are into reward accumulation through trading activities.
Use Cases: Speculation, Hedging, and Arbitrage
Contango serves multiple purposes in the DeFi space:
Speculation: Users can speculate on asset prices, either going long or short based on their market expectations.
Hedging: It offers a way to hedge investments against market fluctuations, balancing risks effectively.
Arbitrage: The platform presents unique arbitrage opportunities between the various APRs present on Contango, among the various markets and chains listed.
Navigating the Risks
Despite its innovative features, using Contango is not without risks. These include market risk, interest rate risk, and the inherent risks associated with smart contracts.
Tokenomics: The Future is Yet to Unfold
Currently, Contango does not have its own token, but plans are underway for a Token Generation Event (TGE) with a total supply of 1 billion tokens. This strategic move is expected to further integrate the protocol into the wider DeFi ecosystem
Venture Capital and Financial Backing
Contango has garnered significant attention and backing from a variety of venture capital firms and angel investors. Notable venture capitals supporting the platform include Parafi, Advanced Blockchain AG, Dlab, AngelDAO Ventures, Spartan, Coinbase Ventures, Jets Capital, Cogitent Ventures, and BBS Finance. Additionally, trading houses like Amber, GSR, Cumberland, and CMS have shown their interest and support for the platform. The diverse array of backers indicates strong industry faith in Contango's potential and innovative approach.
Angels in the Mix
The involvement of angel investors further strengthens the project's foundation. These include figures such as Alex from Debridge Finance, Andrew from MakerDAO, Brian from Solidity Ventures, Tunez from CryptoTunez, and many others. These individuals bring their unique insights and experiences from various sectors of the crypto and DeFi world, adding immense value to the Contango ecosystem.
The Brains Behind the Operation
At the helm of Contango is CEO Kamel Aouane, who co-founded the platform with Bruno Bonanno and Egill Hreinsson. Aouane, in particular, has been vocal about the platform's capabilities and future plans. He emphasizes Contango's native approach to leveraging assets on-chain and estimates that more than half of the volumes on lending markets are due to looping. Aouane also mentions plans for integrating with other money market protocols like Compound, Spark and Morpho, envisioning a significant expansion of the DeFi derivative market.
A Glimpse into the Future
Contango is not just another DeFi protocol; it's a blend of innovation, expert backing, and a team with a clear vision for the future of decentralized finance. As the platform continues to evolve and integrate with various protocols and expand its offerings, it stands as a testament to the dynamic and revolutionary nature of blockchain technology and DeFi.
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