The Poolfish
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GM LPs. It seems the last two weeks knocked the market down a peg and seen a dump in major alt-coins, while BTC still hovering around the $65k mark. The trading volume also spiked since people were looking to de-risk their entire portfolios. Stable-Eth pairs have done markedly better than others in terms of fees.
This week on the Docket
LPing on Linea and incentive program
Are the 5bps pool on Uniswap obsolete
DEGEN LP Party update
New L2s need LPs and Linea is looking to bootstrap their liquidity into their ecosystem using an incentives program using merkle.xyz
Currently the USDC-WETH 0.05% pool has an APY of ~140%
People seem to have jumped at the opportunity. Linea is backed by Consensys, one of the strongest forces behind Ethereum's development.
With now growing at a fast pace and a healthy ecosystem of apps behind it, it can be a contender in the L2 space. It might be a good idea to LP atleast till the incentives run out.
$250,000 in $UNI incentives will be distributed over the next three months.
$125,000 will be allocated to the wETH/USDC 0.05% pool.
$75,000 will be allocated to the wETH/WBTC 0.05% pool.
$50,000 will be allocated to the USDC/USDT 0.01% pool.
Amid an ensuing battle between Uniswap and the SEC, Uniswap has decided to raise its frontend fee to 0.25% on all pairs. This could be to bootstrap liquidity for the looming regulatory battle. This also means that LPs would have a bad time using the Uniswap front end for managing positions. However third party tools are incredible help here.
One of these is Oku that has absolutely no fees on their front-end for LPing or trading. It's also a much better/advanced experience than the traditional Uniswap UI.
For traders who want a simplistic UI like Uniswap but not the fees, can use aggregators like 1inch
Since Uniswap thinks their own app deserves a 25bps take on every txn, surely the LPs deserve better than the 0.05% pools even for stables. It seems like LPs are only ever incentivized when bootstrapping liquidity and then they are left to fight IL, MEV bots and other risks.
One argument is that 0.05% is a competitive and fair compensation for people who are willing to take it. Then again if it weren't the norm to have a 5bps pool, the current scenario wouldn't be a race to the bottom for LPs. Hopefully Uni V4 would do something about this and we can find the middle-ground between traders gaining access to sufficient depth in liquidity and LPs getting fairly compensated for safe Eth*/stable pairs.
The price of $UNI has taken a tumble since being at the top a few weeks back.
And the WETH/UNI pool did $84.45k in fees in the last 7 days, while having a volume of $28.15M.
We are now at the end of week 6 of our LP experiment with Degen/WETH pools.
It seems like we have been in the game long enough that we have majorly caught up to impermanent loss from both directions. however, since the markets overall have slid a bit, we have a -ve PnL since; ETH falling significantly the past few days.
However in both to regards to ETH and HODL, we are up significantly!
This coupled with our Degen rewards ~100k $degen, we have definitely more than doubled our initial investments.
Moreover, we have not touched the position since launching it 2 weeks ago on 1st April. With now sitting at ~$680 in fees, and a range that caters to a soft climb for $degen we can expect this to last a few more days before we have to change anything. After all, Degen is now popular enough to be classified a Low-Risk on Base; as opposed to other meme-coins.
Although we might not capture the upside if there is an massive spike
One of the best performing LP pools on Ethereum L1 this week was Ethena/WETH
People in crypto seem to love leverage so much that there is now a whole synthetic dollar based on top of it. They are essentially playing both sides of the market, hedging long term with staked ETH and then also shorting ETH to make profits for their "Insurance fund".
Ethena made one of the the highest fees this week - $245,358.12
For LPs, this could be a good play since ENA does big volumes everyday:
Checkout ETH / ENA on Poolfish.
In the exotic pairs category for the ones feeling adventurous.
-- BASE --
WETH/TOBI -- TOBI is another memecoin on the Base chain, !high risk!
Base has seemed to embrace memecoins and could become the go to chain for L2 LPs.
the deck from a talk I gave at the variant meme hackathon in NYC on 420. i think memes are an important part of the onchain economy and am excited to see more based memes proliferate to help bring...
-- Ethereum --
YGG/USDC and SYN/ETH on Ethereum
-- ETHEREUM --
--Optimism--
This is one of the most important pools since major L2s including Base settle on Optimism, even though $OP is just for governance. Similar to $ARB, $OP boasts a good daily volume.
While this was a tumultuous week for crypto, it feels like it may get even rockier going forward. Gravitating towards relatively safe projects , even on memecoins should be a priority. Most of the top fee earners pools are on the upward trajectory in Volume as ETH recovers, so this might be a good time to make a bullish position.
See you next week!
🐡🐡
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