Uniswap has surpassed 2 trillion in Volume! LPs have much to look forward to in the following months. Volume has been increasing
Everyday there are new projects that are making LPs a healthy amount on short terms LP hedges. These memecoins do volume many times the available liquidity leading to LPs eating a significant profits from degens.
This week doing a surprising > $1 million in LP fees is Ethena with 19,334 trades in the past 7 days with $250 Million in Volume. Ethena claims to be building a 'synthetic dollar' which is backed by ETH and...ETH short positions; essentially an upfront FTX/Almeida. Ethena has received much backlash for offering high amount of yields much like Terra Lab's Luna ecosystem. They did make 4 million shorting ETH a few days ago and that goes into the treasury. Luckily for LPs, this kind of attention can attract many more traders leading to good fees.
This week on the Docket
A51 Finance And Autonomous LPing
Learn Defi and LPing from PrimeDefi
Zenon Dex Rugpull
Base memecoins; LP making fees
Degen LP party update
While IL cannot be entirely eliminated, A51 Finance offers a solution to help LPs minimize this risk. Much like Aperture.Finance, A51 is another tool at LPs disposal that can remove a lot of stress and the need to monitor your postion.
"CAMMs require constant intervention by the LPs and can be extremely hard to execute automated strategies. On the other hand, ALMs provide only a handful of strategies to choose from and provide no control to the LPs."
LPs can adapt to markets with flexible strategies: bull🐂, bear🐻, sideways🦀, or static. They also craft rebalancing, liquidity, and exit plans to optimize returns.
A51 supports strategies like:
Bull Mode: rebasing to capture upside
Rebase Preference: Liquidity needs rebalancing
Exit Strategies: either selling high on low on volatile asset
Distribute Liquidity: Deploy LP positions on a spectrum
Moreover you can create strategies and share them, and the LPs whos strategy yield the most fees get a cut!
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Today, we saw one of the most ruthless scams that we have seen lately. Zenon Finance on Warpcast raised a presale of 8 million Degen tokens ~$300,000 on the DegenChain. They launched a token few hours later with the entire raised money and then pulled the liquidity for > 5.5 million $degens (~$200,000). And in the meanwhile there was dev wallet from the team dumping tokens on folks.
Some retail LPs also lost a bunch of money due to now a useless token. A good reminder that the bull market is inundated with scams and people looking to take your money.
It seems like every week Base seems to have a hit memecoin that takes over the conversation and makes LPs a lot of fees. Much like this person who has been making hundreds of thousands off a coin called $higher.
Infact LPing with memecoins seems like the best way to particpate in them and a carefully monitored strategy could serve as much better than delta neutral.
Currently WETH/Brett and WETH/DEGEN are offering more than 1000% APR. Both are one of the biggest tokens and communities on Base and LPs have been consistently leveraging the largest volume across both of these.
We are now at the end of week 4 of our LP experiment with Degen/WETH pools.
This week we saw $degen climb down in price after shooting up the week prior. This means our Impermanent loss in also down 👍👍 and we are up against reference metrics for HODL. However since ETH has been also moving up and down our position now contains Degens that had to be bought after exiting our last position. Thus we are down a tiny bit in ref to ETH and about $300 -ve PnL in Dollar terms.
At this point when the volatility for one token is high, makes it a great opportunities for LPs to cash in the rise in trading volume.
in the exotic pairs category for the ones feeling adventurous.
-- Polygon --
GNUS/ETH and MATIC/BONSAI
-- Ethereum --
PNDC/ETH and ETH/GFI on Ethereum
-- BASE --
--Polygon--
ETH/USDT & ETH/GMX for whose looking for a safe bet
With hacks, new projects and tons of memecoins, LP vaults/mining rewards launching, this week was another high volume, fee generating frenzy. Here's to hoping that the ETH ETF becomes a reality which could usher in a ton of new volume and tokens launching on ETH and L2s. Till then we must make the best of our fees. Let us know which pools are you LPing in and what kind of difficulties are you facing.
Till next week. Gn LPs. 🐡🐡
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The Poolfish
