Total Volume + Fees

As things get heated up between the SEC and one of crypto's biggest incumbents, trading volume has taken a hit as LPs anxiously await what the following weeks will bring. The dominance of stable pair trading volume says that the market is in a cautious mood, which could create favorable entry points right now.

SAFE/WETH was the only newcomer that surprised us in LP fees.

PoolFish has a summary of all the best LP positions.

Here's a good discussion about why Uniswap frontend and Etherscan sometimes don't display the same tokens in a transfer including fee costs.

jacob

@therealjfrantz

Why do @Uniswap and @etherscan disagree about how much I got in a single swap? Doesn't look to be explained by LP fees

8

1:01 AM • Apr 23, 2024

This week on the Docket 🔵🔵🔵🔵

• LPing on Bitcoin

• LVR paper by Atis E.

• CLAMM on DEGEN L3

• DefiPrime Incentives for Arbitrum

The new Bitcoin application layer hype is a bitcoin maximalist's dream come true.

Runes(Thorchain) has been consistently making the most noise and capturing the largest market share of transactions on bitcoin. Runes is a protocol developed by Bitcoin developer Casey Rodarmor, and Runes has captured most of the BTCfi mindshare for now.

For LP positions and keeping up with Runes on ThorChain, check out this page.

Cube.exchange is the Dexcreener/Dextools of the Runes/BRC20 world

https://www.cube.exchange

Rewards Overview | Cube Exchange

Join the Cube Loyalty Program and enjoy exclusive benefits. Earn points and redeem them for rewards.

Some good memecoins on Runes are SATOSHI NAKAMOTO & WANKOMANKO

Ordiswap is supporting Runes, and now with a CL protocol on the way, this could be a great opportunity for LPs to explore the BTC ecosystem.

Ordiswap

@OrdiswapLabs

Ordiswap V3 is edging closer

For our loyal community, a sneak peek into our liquidity provisioning module

Remember: Users will be able to permissionlessly add liquidity & create pools to earn fees from the trading volume, alongside potential rewards from incentives

550

1:42 AM • Apr 26, 2024

The DEGEN L3 is still a nascent project but within a small group of enthusiasts, the Degen chain has become the most used L3 EVM chain.

ProxySwap is a new decentralized exchange (DEX) that is built on top of the Uniswap v3 smart contracts. It utilizes the core Uniswap v3 protocol and functionality, which features concentrated liquidity.

Currently there aren't many tokens on the DEX, however their own token $PROXY has been doing well and a managed position could yield good results in the following weeks. There is a vibrant community on DEGEN and ProxySwap is very well received.

This new paper examines the mechanics of CEX/DEX arbitrage trading, particularly focusing on AMMs. It aims to demonstrate the relationships between block times, block base fees, and the different actors involved - liquidity providers (LPs), searchers, and block builders/proposers.

Essentially the EIP1559 is the best defense against LVR and the author tries to dispels the notion that shorter block times would be a worse case scenario for LPs. The impact on LPs depends on factors like liquidity, volatility, and the base fee level.

The paper dives into a lot of examples and give a good idea of of the LVR mechanics that stem DEX designs and is definitely worth a read.

The LTIPP protocol, which stands for the Long-Term Incentive Proposal Program, is a strategic initiative/proposal within the Arbitrum ecosystem aimed at providing long-term incentives to protocols to enhance liquidity depth.

Deltaprime has just been given 750,000 $ARB that they are going to offer to LPs who provide liquidity on Arbitrum.

Out of the 750.000 ARB, only 100.000 ARB will go to those who LP to DeltaPrime. The other 650.000 will go to those who LP to our partners.

On top of this, only borrowed funds will receive incentives.

DeltaPrime allows you to take upto 5x leverage for your positions.

DeltaPrime has a Volume $1B+ till date, Protocol owned Insurance fund reached $1.8M+ and 6000+ total Prime Accounts

For being eligible you would need a Prime account that allows leverage.
You can make one here

If your pool is part of the Prime Account, it is part of this program, and you can route your LP position directly through DeltaPrime.

According to PrimeDefi;

"You can borrow against this position and play with your price risk: If you only borrow stables, you go leveraged long If you only borrow volatile, you go leveraged short If you borrow exactly your underlying, you reduce price risk. How you borrow matters, but as long as you LP you provide extra value to the chain."

In the exotic pairs category for the ones feeling adventurous.

-- BASE --

WETH/ROCK -- Somehow the TradFi giant is also a giant meme into DeFi world

Base has taken a dip but it's nothing it hasn't ever recovered from and likewise the memecoins would follow.

-- ETHEREUM --

DAI/MKR This has been one of the best performing pools for DAI

--Arbitrum--

ETH/USDC

WBTC/ETH

Fear and Greed is now lower than last week and the sentiments seem bearish in the short term. It might be good to make your CL position a bit wider to cater to any price swings since the legal carnage between the SEC and crypto could get out of hand.

borovik.sol

@3orovik

Biden has launched a full scale attack on crypto

- This month the SEC announced it will sue Uniswap & MetaMask

- This month the IRS released a draft of form 1099-DA which will force exchanges, custodians, DeFi… (major pain for everyone)

- this month the DOJ shut down another…

4,800

11:34 PM • Apr 25, 2024

See you next week LPs!

Total Volume + Fees

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%

Oku Trade

@okutrade

Uniswap v3 is Live on @LineaBuild with $250k in Liquidity Incentives

Here’s what you need to know

30

10:23 PM • Apr 17, 2024

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.

Jesse Pollak (jesse.xyz) 🛡️

@jessepollak

read and mint the deck from my lightning talk on based memes today

i believe memes are an important part of the onchain economy and am excited to see more based memes proliferate to help bring the world onchain.

zora.co

based memes

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...

1,589

10:54 PM • Apr 20, 2024

-- Ethereum --

YGG/USDC and SYN/ETH on Ethereum

-- ETHEREUM --

TONCOIN/ETH

--Optimism--

ETH/OP

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!
🦦🦦🐡🐡

Total Volume + Fees

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!

Sponsored

Defi is a complex space and navigating it alone comes with a very steep learning curve.

Leaning about LPing and other opportunities in Defi comes with many mistakes made along the way. Newcomers are oblivious to rugpulls lurking around the corner which is why learning from professionals can save you from a lot of simple mistakes.

Prime Defi aims to onboard new users of Defi with coaching and mentoring, teaching them the fundamentals and guiding them through these difficult topics. Learn more about PrimeDefi here.

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 --

ETH/DEGEN & ETH/RISITA

--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. 🦦🦦🐡🐡

Total Volume + Fees

The market seems to be cooling off a bit, until you realize that the action on Ethereum is being migrated to L2 chains. Base, DegenChain, Polygon and even Dogechain along with others are attracting communities and traders while Uniswap LPs are also migrating/diversifying.

On Ethereum, this week we saw the 0.3% tier pools grew by 7 percent and the 1% shrunk reflecting lower fees. Seems like the market has picked it's meme coins for the season.

Oh and seems like Base season is here.

On the docket this week:

• Scroll past Scroll and Degen Chain

• Degen LP Party Update and profits from other pools

• DyDx LP Vaults

Scroll

Scroll has been consistently doing volume comparable to the total value locked on it.

The chain is roughly seeing 30-50 new LP positions everyday and maybe one of the L2s where in the future we do see some action.

However this may not be the most LP friendly chain. There are no memecoins and only utility tokens 🤮 like ETH,WBTC,USDC,USDT and and wstETH. Only a few retail LPs here with no opportunities for short term bets.

Degen L3

Just launched 2 days ago and already contesting Blast in TVL and Volume, this could be one of the best chains for LPs, only problem is the chain is rife scams and rugpulls. On the 31st of March, DegenChain saw it's block minted as a successful L3 chain built on the L2 Base. With already 10 million transactions, it might be the dream chain for memecoins.

But as aforementioned, the rate of rugs is too high. There are currently no tools for LPs on the Degen chain as well.

You can expect a through tutorial for LPing on DegenChain from us in the future with a complete toolset for you to make sure you're protecting yourself while picking risky assets.

We are now in our third week of our collective LP learning experience.
Since the last two weeks, the price of $Degen has more than doubled and then receded to now being $0.048 and our HODL metrics do not look very good. Indeed holding on to $DEGEN would have netted us more.

However we started of with 0.8ETH and are currently sitting at nearly 1.1 ETH including fees.

Coupled with our rewards from the LP incentive program, which stands at nearly 1 ETH ($3300), we are def looking good!

We went out of range on both of our positions when the price of Degen came down. And are constantly monitoring it's performance. Could we have done better with a wider range or maybe a position with more Degen at the start? Or maybe we should have made waaay more positions to cater to every possible price jump?

We're are answering these questions and more on the PoolFish Youtube channel where you can find content that revolves around being a responsible and profitable LP.

What we are sure of is that we made the right choice with LPing with Uniswap. While other Dexes do offer native rewards, Uniswap has become synonymous with crypto trading itself i.e The "Coke" of Cola

This is subjective to the project since some people are having success on Aerodome with other pairs.

Other L3s

The only comparison to Degen L3 is DMT chain, and it seems because of DEGEN, $DMT also got a boost ion price. DMT/WETH or DMT/USDC on Arbitrum could be a good choice for LPing aswell but careful of the downward swings!

And some LPs seem to be doing well, except the rise in DMT may be temporary since there is a L3 hype right now. But as of now it seems like Degen is the clear winner. There are LP opportunities there but we should wait for the infrastructure to be developed.

Similar to how there is fierce competition within L2s, we can expect for a similar chain v chain between L3s.

dYdX Chain is rolling out LP Vaults and an AMM engine in two phases to significantly improve liquidity on the platform. These LP Vaults will boost the overall functionality of the protocol

The first phase-- deposits only (experimental), then in the second phase-- full functionality with withdrawals and a user interface.

And LPs can expect to get compensated for entering into these Vaults.

We'll keep updating as the dydx releases more info on the topic.

dYdX

@dYdX

Vaults pass on any profits (and losses) to depositors, along with any maker fee rebates or trading rewards generated by the vault’s trades. This means that there are some risks for depositors and to be sustainable, vaults must offer market-competitive yields to depositors

6

7:15 PM • Apr 1, 2024

-- Base --

Since Base coins have being rocketing, here are some top picks. Most of them are currently very volatile but a cautious position with mostly ETH could yield some good results over a few weeks. All of these are seasonal memecoins so don't expect them to be lasting for months on end! ETH/doginme | ETH/BRIUN | ETH/PONCHO | ETH/FRAME

-- Arbitrum --

SPA/ETH on BASE in the exotic pairs category for the ones feeling adventurous.

-- Optimism --

-Ethereum-

ELON/ETH for those who are looking for safe bets that go to moon when anything SpaceX/Elon Musk happens.

We might not get to Mars anytime soon though.

Uniswap does have a bright future in the coming months and a bullish strategy through the summers might be a good option. Another very viable pair is WETH /UNItoo since ETH is lagging behind BTC anyways.

UNI/USDC

-- BASE --

Since base has emerged as the memecoin central (and many rugs too--be careful), it only makes sense that LPs can capture so much fees from stables/ETH pairs. Degens are apeing in left and right and have pushed the fees for Base stable/ETH pairs incredibly higher ⬆ than other chains.

ETH/USDC

--ETHEREUM--

USDC/ETH & WBTH/ETH for whose looking for a safe bet

It seems like we are anchored at the previous all time high from the previous cycle and it seems so that BTC might be headed for a 100k by the end of the year. Memecoin frenzy is keeps getting crazier and L2s are being finally being utilized for more than airdrop farming.

We'll see you next week with an in-depth analysis of the L3 Degen chain and LP opportunities within it. Stay Safe! 🎣🎣

Total Volume + Fees

GM LPs. How are you holding up thus far in the bull run? LPs across chains are seeing some of the highest fees since we are seeing after ETH and BTC bounce back from a retracement the last two weeks.

From distasteful memecoins on Solana to Base season memecoins surprising everyone, LPs have never been so spoiled for choice making high stake bets. In the meantime, BTC and ETH with their stable pairs have been accruing lots of fees from panic sellers.

This week on the docket :

• Stable-coins/ETH pairs generate millions among volatility

• PoolFish DEGEN LP Party Update and PnL

• AirDAO loses 35 million to hack from their AMB/ETH Uniswap Pool

• Base > Arb for LPs

his week the WETH/USDT pool and WETH/USDC were the clear winners however with ETH being a more volatile than usual at this time, it might take sometime to catch up with the impermanent loss.

With the anticipation of an ETH ETF, this could be a buy the rumor point for ETH and entering ETH with a stable pair for LPing could be a good bet.

One pair that has done exceptionally well has been Maker DAO (WETH/MKR) as their price has been rising after their decision to review their lending rates, making the price surge more than 50%.

Maker DAO generated nearly half a million in fees from under 3000 trades in the past week. The 0.3% and 1% pools accumulated the most fees among the pools👇🏽

However, one look at both the pools on Poolfish, and we can see that this pool might not ideal for the average LP. Retail LPs are sparse and not much in profit. And since this is a bull market we are looking for above average returns.

Last week we embarked on a mission to LP in a memecoin in Base which has been exploding in popularity; DEGEN. We brought along many friends and made a party to collect funds and inject them into the 0.3% WETH/DEGEN pool position.

Since then, we have been optimizing for the best returns while remaining cautious about over buying DEGEN. Since we are dealing with a highly volatile memecoin, it made sense for us to divide our WETH/DEGEN into two different pools to support different ranges for DEGEN.

Our initial position which had very little $DEGEN got quickly traded out of DEGEN and we netted a loss of nearly $36 after collecting our fees of roughly $47. Our position had quickly become out of range since $DEGEN surged a lot and broke out of our concentrated position. We exited this position as we wanted to enter a fairly lax position now with more $DEGEN. The loss mainly comes from ETH going down in the meanwhile.

Currently we have two positions, this is to ensure that we don't miss out on earning fees if the the price of DEGEN deviates or goes higher where our second position will activate with a 100% ETH at this point but

Liquidity Mining for DEGEN

One important thing here is that our LP position is also accruing LP mining rewards from DEGEN LP rewards pool which have been shown to be excellent at bootstrapping liquidity into a project. We expect these rewards to cover any of our losses.

Gauntlet

@gauntlet_xyz

631% average increase in TVL and 37% average increase in market share for pools incentivized in our ongoing liquidity mining program for @Uniswap on @arbitrum. Promising results for Uniswap's airdropped ARB tokens

We continue to observe previously inactive pools react…

17

8:42 AM • Mar 18, 2024

At this point our current in range position is sitting at a roughly 600% APR. The best frame to see it would either ETH or USD. In USD our position has accumulated $250 in PnL. While in HODL or impermeant loss statistics we seem to be in a loss of ~$78.

And our initial deposit of $DEGEN has been reduced to ~1/3 of what we initially pooled in.

Are you tired of visiting hackernews and not finding a single post on crypto, web3, memecoins or LPing? Presenting--- KiwiStand 🥝! A p2p news client where users and contributors are passionate and engaging about all things blockchain.

You'll also come across articles related to Uniswap, LPing and a whole array of other topics. Their exclusive NFT-gated community votes on the submissions just like reddit leading to a highly curated news feed every single day!

Here is a few select articles from there that you'd definitely like:
Uniswap has lost the plot ; Goes into some critiques of Uniswap.

Introducing Gnosis 3.0 ; Goes in-depth explaining the architecture of Gnosis Safe 3.0

You'll not only find interesting articles here but also a really cool community that is connected to Farcaster. So go forth and explore KiwiStand!

It's a bull-market rife with scams and hacks in every corner. AirDAO's Uniswap pool got hacked on the 21st of March. And this time, this was social engineering attack that lead to an enormous loss of funds. There are numerous attack vectors in which a scam might come for your token. Whether it's liquidity rugs, white/blacklisting token swaps or a smart contract exploit or any other method, no amount of caution is too much.

While Arbitrum is the most use chain since they were the first L2 to become incredibly popular, Arb has been seeing steady decline in fees and trades. This week we see USDC and ETH pairs making good fees despite declining from the past week. The primary exchange on Arb, GMX and another important Defi rail, PENDLE finance, raked in ~100k fees each.

While WETH/USDC and USDC(bridged) made good fees ~$900k are

WETH/ARB 0.05% and WETH/GMX 0.3% are however, our main picks for the week to make a healthy amount of APY while also being a safe bet.

WETH/GMX 0.3 did nearly 2% fees/TVL while WETH/ARB 0.05% did nearly 1%. A long term cautious strategy for both pools could be a good choice since most people are bullish on ETH anyways.

In contrast BASE has been seeing much more action in terms of volume from memecoins and a slew of DEGEN traders looking for the next 100x. Moreover, Base is being widely adopted becasue of being such a high trust brand.
For LPs Base could very well be the best chain given the amount of project launches, their distribution and gas costs as compared Arb.

--POLYGON--

MATIC/BONSAI & ETH/BRETT in the exotic pairs category for the ones feeling adventurous.

BONSAI token spawned on Lens protocol clients when they finally realized they needed a memecoin. BONSAI is polygon, which might not be a mecca for memecoins for everyone, but it is for a passionte community on Lens.

--Optimism--

ETH/DAI and ETH/SNX on Optimism Chain

Synthetix Exchange on Optimism is one of the biggest projects on the chain and is the most high volume DEX for the chain. While the ETH/DAI pair is one of the highest Volume stable/ETH pair on the chain with 33,786 trades int he past 7 days.

--Ethereum--

USDC/USDT on ETH

This week we saw our LP fees holding up, we also saw a market correction that can make veteran LPs choke, so keep your risk profile in check and ask us any questions in the reply to this email!
See you fishes next week!

The markets have been swinging the past two weeks and Defi activity on Uniswap is now nearing the highs of the previous bull market. The Dencun update for Ethereum has been a smashing success with people enjoying sub 1 cent transfers, which leaves more on the table for LPs as now trading becomes less painful and in turn more frequent. The Optimism Superchain and other L2s built on it have seen the most decrease in gas fees, hence the trading volume on these have been substantially increasing.

LP fees are also rising with more and more LPs now entering positions as safety net since rumors are floating of correction/bull-run over with the Fear and Greed index hovering around ~90/100. How it plays from here is anyone's bet.

Uniswap's price has remained consistent despite the rejection of the protocol fee proposal. However it is still possible to see a lot of price action for UNI/WETH pools since anticipation of Uni V4 is at an all time high since Dencun, its precursor has been achieved. However, for the time being, trading volume has slowed down and LP fees for the past 7 days shrunk since we last covered it.

At the same time some new projects have been picking up on ETH L1. Most of the volume was catered to by ETH,BTC and stable coins, however a few standouts this week were:

WETH/GNUS Genius Token & NFT Collections - ~735,000 in LP fees

RBN/USDC Ribbon Finance generated nearly $490,000 in LP fees.

This week we also saw Maker DAO reach the LP leaderboard. MKR's creation, DAI is experiencing adoption on a massive scale as stable coin lending reaches record rates. WETH/MKR has generated LPs $563,333 with 2354 trades on L1 ETH this week. WETH/DAI pair is also doing good numbers with 3,906 trades and $132,928 in fees.

One cult classic that has spawned a culture of its own; $ZYN is also in our LP leaderboard.

With WETH/ZYN doing 1,853 and generating $43,264 in the 0.3% pool on Uniswap.

Auction-Managed AMM

Since the change to Uniswap Factory contracts was rejected in the proposal, partly because that could open the Uniswap team to litigation charges (for now), Uniswap Hooks remain the only method to radically change revenue model and higher fees for LPs.

Dan Robinson et al. released an Auction-Managed AMM research paper, which according to their hypothesis would perform better than fixed-fee AMMs. Their approach target both reducing losses to informed Orderflow (LVR), and maximizing revenue from uninformed Orderflow (MEV).

Their model suggests auctioning off special privileges to a temporary Pool Manager who can set the swap fee and have the special privilege to capture MEV before the toxic flows show up (or "noise trader fees"). The LPs get to make a fixed/determined fee and no MEV bots can scoop up the imbalances of the pool

They also go over drawbacks of this model that includes an increased risk from sandwich attacks from the auction winner who can effectively trade without worrying about fees and can front run the big trades but they also propose solutions that may be integrated in the next version of the paper.

Base Trading Volume and a DEGEN party

Base has quickly integrated itself inside the L2 sphere of conversation and is now at the cusp of becoming one of the fastest growing consumer chain backed by the giant Coinbase. LPs on L2s like Base are central to this and have been raking it in.

And L2s in general are good for everyone.

Base could very well become the hub for meme-coin circulation on the EVM but for LPs of course, with meme-coins comes a lot of risk for impermanent loss especially if degens start making good trades.

Base LP fees and Volume are on a climb since even before their fees got slashed to nothing and LPs couldn't be happier with nearly 1600 LP positions opened in the last 24 hours.

For example a new meme-coin pair WETH/NORMIE has the following LPs who are doing good especially the more concentrated ones.

Other than $NORMIE there's a whole lot of LP action going on Base. $DEGEN has been nearly a 3 month project now with one of the longest list of LPs out there. While most passive LPs are not in profit, some active ones and who were smart enough to choose an initial good range have more than doubled their money.

We hope to be one of these lucky LPs with our new project of providing LP to the WETH/DEGEN pool as collective party of many LPs. Over the weeks we will be distilling our insights and lessons about LPing.

Here is the position we have taken in WETH/DEGEN 0.3% pool.

The current price of DEGEN/WETH is

The ranges are calibrated so that we are entering with a majority stake in ETH which is a smart strategy considering volatility in DEGEN

• MIN -> 792,795.706 DEGEN WETH

• MAX -> 19,061,132.2 DEGEN WETH

  We may have to update these as time goes on and $DEGEN's price action makes it out of range for our position.

Note that the ref_value is USD and not HOLD

When we take a look at the HOLD value of our position in the 0.30% tier pool, we already have a healthy 263% fee_APR and since $DEGEN is now becoming a building block for other apps, we hope to still be in range for when it surges.

There is a ton on the way as we don't intend to leave this position in a passive manner and will be experimenting with in any way that the current Defi system allows. That includes automation of LP like Aperture Finance, providing loans and leverage to degens, leveraging it ourselves using YLDR and any other on-chain activity that comes under the ambit of LPing. So keep coming back to see how we are doing!

Top Pools Of The Week

High-Risk

--BASE--

DOGINME/ETH & ETH/BRETT in the exotic pairs category for the ones feeling adventurous.

ETH/BRETT has an astounding forecasted APY, and the volatility allows some LPs to make very healthy fees.

Low-Risk

--Ethereum--

PANDORA/ETH

has been consistently in the LP highlights for the past few weeks.

Ironically enough the top pair with the highest LP fees in our low-risk category is ETH/SOL, which of'course is a meme-coin and not the real deal. 🐧

Safe

--ETHEREUM--

WBTC/USDT & ETH/USDT for the safe paddlers

This is a point in the bull-run that many say it has topped, others say completely the opposite and any time put into figuring out which is correct is time that could be spent on LPing.

Remember to follow our DEGEN LP journey!
See you next week LPs 🙋🏻‍♀️

This week we saw the market experiencing a particularly impactful week and LP fees are seeing all time highs. While some altcoins have seen surges, the real appreciation has occurred in BTC & ETH. With a bottomless pit of money being pumped into bitcoin (ETFs) and an ETH ETF rumors picking up steam, sky is the limit.

WETH/BTC pools are among the top pools this week on most L2s

• Arbitrum

  With 37,602 trades and LP fees of $188,875.

• Optimism

With more than 8,900 trades and nearly ~ $35000 in LP fees

• Ethereum

With 8,650 trades over the past week, generating a total of $1,542,360 in LP fees

The total Volume on Uniswap for L2s has reached $200billion.

And the Base swappers on Uniswap have grown more than 600% in the past year from ~19700 to now ~142000, and the TVL reflects the same sort of growth.

(BASE) Degen on Farcaster just partnered with Aerodome, the AMM built on Base, to enhance liquidity for the Degen/WETH pool on Base.

Pandora pair(s) maintains its reigns achieving a daily DEX volume twice that of BAYC NFTs

Ordiswap LPing ($ORDS)

Surprisingly we are seeing ordinals once again making waves with ordiswap (an AMM based on btc) gaining 8000% in volume.

There are now meme coins activity in the ordinal space and the AMM is quickly becoming a strong contender in the ordinals space making LPs respectable fees reaching nearly $10k in the last 24hrs from a volume of $40k.

Here is an in depth guide on how to add liquidity in the ordinal space on Ordiswap, which is the "full-stack DeFi infra for Bitcoin L1".

Ordiswap

@OrdiswapLabs

How to Use Ordiswap 101 – a Tutorial Guide for Stage 1 Mainnet

Below, we've prepared a guide on how to use our fully-functioning Stage 1 AMM build, including how to Swap, Bridge, Add & Remove Liquidity & Create Pools on Ordiswap

Dive in 1/14

432

6:28 AM • Jan 28, 2024

Uniswap Fee Sharing

Atis E offered insights on the Uniswap fee switch, emphasizing its significance in the transition from v3 to v4, predicting that the latter will outshine and replace v3 due to architectural improvements and because v4 is expected to offer gas optimizations, LP-friendly innovations, and a reintegration of v2's broader liquidity positions.

Additionally, they delved into the debate around Uniswap potentially adopting a dedicated appchain or rollup, competition from other intent based Swapping models in comparison to Uniswap.

The proposed fee switch, designed to allocate protocol fees to UNI stakers and sparking worries over LP withdrawals and liquidity dips has been well-received by most DAO participants, with orgs like a16z backing the proposal. @atiselsts_eth argued that LPs are resilient against Defi protocol changes and that a modest 10-20% fee will result in fewer LPs but higher profits for them, thus Uniswap will stand more or less unfazed.

Uniswap is also releasing more features on their app aswell.

Uniswap recently announced Limit orders on their front-end.

They also introduced ENS domain names for the users of their mobile wallet.

There is always something novel coming out from the Uniswap Labs team, which keeps the interest in $UNI high by association.

And the UNI/WETH pool in the past 7 days did $161,854,115 in Volume, 3,589 trades, $493,686 in fees.

Another $UNI pair like UNI/USDC is also doing really well

Given the proposal for the fee goes through without a hitch, $UNI could be one the biggest asset this bull-run. With many more upgrades anticipated from the Uniswap teams, a Long ETH/UNI or even a stable UNI pair is a worthwhile strategy to consider.

Meme-Coins are soaring

Since the BTC is roughly at its ATH point, altcoins have started following in its steps. And likewise, the pools on Uniswap for these are also quite profitable for the total value locked in them. Currently SHIB/WETH is roughly 4% Fees/TVL for the 0.3% pool, in the last 7 days.

WETH/PORK is at a stunning Fee/TVL for both 0.3% and 1% fee tiers, making $26,622 in fees in the 0.3% tier and $395,951 in fees in the 1% tier on ETH L1in the last 7 days.

As the graph shows people are still bullish on PORK and meme-coins in general, since most of the meme-coins including SHIB,DOGE,PEPE are all up recently.

And we can see many retail LPs hedging a long strategy for PORK

Chainlink (LINK) pairs have also been doing well.

The LINK/USDT pool having a healthy volume and of $5.57M and fees of $16.72k. The LINK/USDT pool is currently the 5th best Fee/TVL ratio at 12.4%

Another newcomer in the LP leaderboards has been WETH/DZHV or DizzyHavoc (0x3419875b4d3bca7f3fdda2db7a476a79fd31b4fe) and did $53 Million in the last 7 days and doing half a million in LP fees. DZHV allows you to deploy multiple tokens on on multiple EVMs in a gas efficient manner, including mainnet ETH.

One LP in this pool has made over half of their taken LP position in less than 5 days

However the pool doesn't have many retail LPs. And the token is riding the 'new tek' wave that PANDORA has ridden the past few days.

Top Pools Of The Week

High-Risk

--ETHEREUM--

WLD/ETH & SAVM/ETH in the exotic pairs category for the ones feeling adventurous.

WLD has been consistently one of the most traded tokens on mainnet. Consequently WLD pairs for LPing have been popular.

SAVM was one of the most surprising token to emerge out of this bull run and has been one of the best pools for LPs looking for high stakes bets. Its popularity has waned from its ATH though.

Low-Risk

--ARBITRUM--

ETH/USDC 0.3 % pool

ETH/USDC generated nearly half a million in fees for LPs in the last 7 days for the unbridged one and nearly a quarter of a million for the bridged version.

LINK/USDC 0.3 % pool

Safe

--ETHEREUM--

WBTC/USDT & ETH/USDT for the safe paddlers

It is anticipated that the values of both BTC and ETH will continue to rise in the upcoming weeks and months. Entering into stable ETH/BTC pairs with a mid-to-long-term strategy appears to be a promising opportunity at this moment.

We hope that this PoolFish issue has given you a trove of insights, potentially guiding you towards your next investment destination for the week. See you on the next wave, next week! 🐠🐠🐟🐟

This week trading volume jumped significantly, ignited by a series of airdrops and revenue-sharing initiatives. In the past few days we saw a notable surge in volume for some newcomers and some established coins experiencing a surge.

WETH/STRK

StarkNet is ZK flavored roll-up and since its airdrop has seen significant trading generating $497,714 in the past 7 days.

WETH/UNI

Uniswap's latest proposal (yes just a proposal!) has skyrockted it's volume in the past 24 hours.

While the UNI pool generated $419,079.50 from just 3,143 trades.

WETH/WLD

WorldCoin is now synonymous with one of its founders Sam Altman. If he wins WLD goes up. Just wait till he raises 7 trillion. WLD pool did 3,697 trades in the past 7 days and generated $146,685

and WETH/PANDORA still reigns on top this week at $1,106,486 generated in LP fees.

Uniswap Fee Proposal & effects on LPs.

Uniswap Foundation just announced its most recent snapshot vote for a mighty significant change in the protocol for Uniswap V3. Just the submission of the snapshot proposal sent the UNI price up by > 70%, a 4 Billion dollar pump! Not just that but nearly all large Defi protocols/apps are significantly up after the announcement of this proposal.

If the proposal and the subsequent DAO vote pass; the Uniswap protocol is set to activate the highly anticipated "fee switch" for UNI token holders who stake and delegate their tokens (on Uniswap V3)

We did see a lot of insiders pulling their WETH/UNI liquidity and buying $UNI before the submission of the proposal.

$UNI holders and investors are thrilled, but the impact on liquidity providers (LPs) remains uncertain. Although the proposal claims the protocol fee is vital for success, LPs may be displeased with reduced fees.

However, AMMs where LPs share fees with token holders are already in use by many DEXes. Furthermore, revenue sharing with token holders in the current hostile environment is being appreciated.

There are some questions regarding whether all of this is also...legal

Some critics are arguing that "you can now value $UNI on earnings instead of 'hopium' limitless future potential".

We doubt that would be the case since the governance tokens fees would be realistically a fraction (about 1/10th) of the total fees and many crypto natives are looking for fees better than that, the fees are just a cherry on top.

Wajahat Mughal

@0xMughal

Agree, it’ll more likely be something like 1/10th of LP fees so despite that still being over $100m annualised. The APR would be sub 5%

I’m sure some boomer stocks have a higher dividend income than this

2

2:26 AM • Feb 24, 2024

The 10% statistic is derived from a Gauntlet research project conducted in January, which examined the impact of a uniform 10% fee on Liquidity Providers (LPs) regarding governance token fees. Their findings were bullish in favor of the fee, and the resulting loss in volume was a loss of mostly toxic flow, but that comes along with a ~10% loss in liquidity for pools aswell.

The DAO is scheduled to cast their votes on March 7th, contingent upon the outcome of the preliminary snapshot vote and other prerequisites. This may cause significant developments for the UNI token soon.

The fate of LPs, half of whom are reportedly already at a loss, will be decided at this juncture. Yet, with the introduction of V4, the narrative around governance fees shifts dramatically, offering LPs greater influence over fee structures. Even considering the governance fee for UNI holders, LPing with V4 could be a much better offering for LPs.
In-fact, this might be the catalyst that convinces LPs to migrate liquidity to V4 since optimally;

V4 LP profits - Governance fees > V3 LP profits - Governance fees.

Top Pools of the Week

High-Risk

PNDC/ETH in the high risk pairs category for the ones feeling adventurous.

PNDC is an exchange that rewards it's users with fees. Given that the Defi ecosystem is gaining massive traction in any company that adds a points or dividend system, PNDC seems like a bullish LP bet.

Low-Risk

PANDORA/ETH & MUBI/ETH

At its current rate PANDORA will keep the TVL(Volume) throne for a while and is a good candidate to LP in.

Safe

WBTC/USDT & WBTC/ETH for the safe paddlers.

Its rough waters out there right now. There are massive wins and equally big losses too. Safe bets with BTC, stable coins and a long term strategy even in the middle this bull run would be good choice for the masses.

Equally important are pools such as $UNI and other DEFI protocols that may end up employing a similar strategy in order to appreciate the market value of their tokens.

That's all for this week.

Happy fee farming!

Let us know in the reply to this email if you think the Uniswap protocol fee is a revolutionary new era for Defi,DAOs and revenue sharing or is it a cash grab by whales and VCs?

The launch of Uniswap v4 is tentatively set for Q3 2024! The momentum for v4 has been building robustly and there are bound to be some excellent LP opportunities. The Uniswap team is currently working on core code, optimizing for those precious gas savings, boosting security, and polishing the final touches.

This week, Ethereum, in particular, has seen its value skyrocket, surpassing previous records since the last bull market nearing the $3000 mark as each day passes.

Likewise, the Solana ecosystem, along with its native token, is witnessing a significant surge in trading volume.

You may have noticed that the Arbitrum, Polygon and Optimism calculators on Poolfish have been down for some time. This has been very unfortunate and we thank you for your patience!

We depend on Uniswap's public subgraph data to make our calculations and the issue is due to this subgraph being down. We are still waiting for Uniswap to get the subgraphs back up and running and hopefully they get things fixed soon!

In the meantime, we do have backup data for Arbitrum now so you should be able to start using it smoothly again! We are still waiting for the other ones. Thank you for your patience!

Arbitrum continues to surprise us. Stable coin volume on Arb continues to be the highest among all other ETH chains. The volume on the chain has grown 4x since last year!

Uniswap Labs 🦄

@Uniswap

Arbitrum swap volume has grown more than 4x since this time last year

105

8:00 PM • Feb 16, 2024

Solana LP Action

On Orca there are now a total of 20,755 active LPs, up nearly 20% since about 3 weeks ago. Similarly there are about 55,000 positions up from 47,825 positions 3 weeks ago. More and more LPs are dabbling into Solana ecosystem especially since protocols like Raydium are also providing incentive tokens on top of trading fees for LPs.

Staking Protocols on Solana are also on the rise and staked pairs are some of the most popular pairs for LPs.

DEXs like ORCA offer VERY high APY for concentrated LP on big coins like $WIF $BONK. The WIF/BONK pool on Orca has a total of $48 million volume while the pool $143.9k in total fees and only ~550 LPs.

Stable pairs on Orca's AMM are also doing well and are great for LPs who believe in the long term future of SOL and want a delta neutral strategy for their assets. Orca's SOL-USDC 5bps Pool has now a total volume of $8.3 Billion and a total of $4,039,779 in trading fees with about 2000 current LPs.

Apart from Solana, there are many new protocols in the last few weeks and they often provide really good incentives for bootstrapping liquidity. Here is a user of Hawksight.co, which is a Concentrated Liquidity Yield Optimizer for Active LPs on Solana.

baller_basket

@baller_basket_

Hardly 12 hours in and I've already made over 4k from just yield. I don't understand how people can fade @HawksightCo??

35

1:08 AM • Feb 15, 2024

Currently Hawksight has many lucrative offers for Solana LPs

They also Auto-compound your fees and manage your position for you. Since gas fees on Solana are next to nothing, onchain activity is not hindered by gas costs.

Raydium is also known for providing incentives on top of trading fees. Here are just some of the best pool on Raydium with really good fee rates.

COWSWAP Anti-MEV AMM model

CoW DAO | MEV Blocker & CoW Swap

@CoWSwap

The dirty secret of AMMs is that many of their pools are leaking.

In fact, liquidity providers lose 5-7% of their profits to MEV every year, making *most liquidity pools* unprofitable.

That's why CoW DAO is building the first MEV-capturing AMM.

We call it CoW AMM.

546

8:08 PM • Feb 14, 2024

The CoW DAO has introduced an innovative automated market maker called CoW AMM, specifically designed to address and capture MEV for the benefit of LPs. This new AMM model is a response to the significant issue of Loss-Versus-Rebalancing (LVR), which traditionally results in over $500 million in annual losses for LPs.

When there's a chance for arbitrage, solvers enter a bidding war to rebalance the pool. The highest bidder, who adds the most value back to the pool, gets to make the move.

Ethereum Pool(s) Analysis

We saw many new tokens on the LP fee leaderboard this week. Last week we took a look at $PANDORA and $PORK. This week the 1% fee tier saw many new pools raking in 6 figures of fees.

Heroes Of Mavia in the 0.3% fee tier, with their token "MAVIA" generated $134,866 for LPs with 9,133 trades. The game has been gaining popularity and now has more than 300,000 players. The token is key to in-game mechanics and has attracted many passive LP with short term strategies

ONDO Finance which has raised from a number of influential funds and is attracting LPs and is poised to be a good LP opportunity with $5K in fees in the last 7 days from 228 trades.

Ondo Finance

@OndoFinance

Read @packyM’s deep dive on Clear Street, the prime broker for our tokenized funds. Learn how Clear Street is modernizing capital markets infrastructure, and how, together with Ondo Finance, the “connective tissue” between TradFi and crypto is formed.

notboring.co/p/clear-street…

Packy McCormick

@packyM

Read the full deep dive on Clear Street at Not Boring:

notboring.co/p/clear-street…

177

6:13 AM • Feb 16, 2024

Top Pools of the Week

High-Risk

wTAO/USDC & GROK/ETH in the exotic pairs category for the ones feeling adventurous.

As well as ETH/AERO on BASE chain

Low-Risk

If you are looking for low-risk bets, the ETH L1 chain is your best bet.

GNO/ETH and LCX/ETH

Safe

Since both ETH and BTC are in up-ward price discovery, being an LP for the two assets can be very valuable.

WBTC/ETH and USDC/USDT

Predicting the current phase of the bull run is hard, with opinions divided: some maintain a bullish outlook, forecasting Ethereum to climb to five-figure valuations, while others adopt a more cautious stance.

Amidst the flurry of fresh token debuts and a general market upswing this week, the coming weeks could very well become a prosperous period for LPs.

See you LPs next week! 🐠🐡

GM LPs! This week's market dip created a lot of trading volume and we are seeing spiking trading activity on Uniswap.

In a sea of nearly 20,000 Uniswap pools, this week one WETH pair has taken everyone by surprise generating more fees than any other pool - by far. WETH/SAVM, which has recently been the bane of meme-coin critics has generated $4.3 Million in the last 7 days with ~$3,753,000 currently in liquidity, nearly 4 times as much as the next most profitable pool.

This week on the docket:

• Uniswap V2 model still makes sense

• Farcasters LPing on Degen

• Uni V4 Liquidity Locking Hook

Uni V2

The continued perseverance of Uni V2 has surprised everyone despite V3 theoretically being a better offering. In fact Uni V2's volume has risen over the last year, now having a TVL of nearly $1.6 Billion.

Recently we saw a research paper on Uniswap V2 by @atiselts, where he makes the case for why Uni V2 is still a good option.

The paper looks at WETH/USDC pool from multiple perspectives and concluded that despite toxic flow trades, MEV bots, LVR and impermanent loss, the pool remained profitable for LPs and popular choice due to it's lower risk profile.

This is signal that despite CLAMMs being used for most of the volume on Uniswap, V2 full range pools are still the choice for a lot of LPs looking to make safe bets and a Uniswap V4 hook based on this model, could be even more successful.

Degens on Farcaster

Meme-coins have a lot hidden impermanent loss inherent to them. While risky, we will be taking a look at another meme-coin spawning from a community known as the ETH maxi's Mensa, farcaster. More specifically we'll be looking at WETH/DEGEN pool on base and try to extract lessons from LPs.

Gwart

@GwartyGwart

Farcaster is Mensa for Ethereum people. You will know if someone is on Farcaster because they will tell you they are on Farcaster

352

12:21 AM • Jan 5, 2024

$degen is a community meme-coin originating from farcaster, a sufficiently decentralized network. Launched on Base L2, it quickly grew to one of the top meme-coins on the chain. It was the starting point for many people in their LP journey.

As of now the the 100 bps WETH/DEGEN pool has a TVL of ~$426,000. And it seems like most people are bullish on $degen or deploying full range LP positions.

A quick look at the positions tells us that LPing in degen is a short to medium term game, with most positions past 3 days in -ve PnL. The LPs are providing liquidity in hopes that the mining rewards offsets any of their losses. And most of the discussions are around mitigating IL while also staying in range for the rewards, which is why many opted for a full range position.

Below 👇🏻 is the one of the most integral team members of Base Chain's team fishing for LP tips!

Farcaster

Jesse Pollak 🔵 on Warpcast

what's the easiest way to deploy liquidity on base in univ3 in a way that minimizes risk of impermanent loss?

⬆ fees = narrow range = ⬆ IL

⬇ IL = broad range = ⬇ fees

Still there are LPs who are making 3 digit APYs at narrow positions.

We went ahead and made an in-depth video tutorial for using PoolFish to add liquidity to the 0.3% pool.

There are plenty of small scale LPs who are trying out LPing for the first time with amounts less than < $500. And the tutorial above can take you through all the steps in minting your first LP position while also supporting a budding community. However, it should be considered as a high risk investment and you may want to keep watch over it.

Uni V4 Liquidity Locking Hook

We are a mere few months away from Uniswap Protocol's newest update to Version 4 which gives us the power of Hooks. Today we take a look at a hook from @BrokkrFinance

Bootstrapping liquidity is hard for new protocols and customers require locked liquidity for confidence. Thus, there is a need for a transparent method to lock in liquidity and to attract traders while sustaining a deep pool depth. At the same time it can be a method to award LPs for locking in liquidity.

"This hook lets pool deployers reward liquidity providers who lock their liquidity with additional token rewards by minting new ERC20 tokens."

This means locking liquidity, governance and mining rewards are done on-chain rather than trusting a third party to make those for you. LPs who lock their positions earn more points on them and receive them when they withdraw the LP. This also comes with a penalty to withdrawing your LP early on.

All of these are new paradigms that can be manifested in a number of ways to attract LPs and traders and ultimately grow a protocol.

The Uni V4 update is scheduled to arrive post-Ethereum upgrade in March. And we can't wait to see what it brings to the world of LPing!

Top Pools of the Week (Multiple Chains)

High-Risk

ETH/MOCHI & ETH/TOSHI on BASE in the exotic pairs category for the ones feeling adventurous.

Low-Risk

CELO/cUSD on CELO chain & ETH/WAVAX on AVALANCHE chain for the balanced swimmers.

Safe (PancakeSwap)

ETH/USDT for whose looking for a safe bet

That's a wrap for this week's LP news. Make sure you fiddle around on PoolFish to optimize your WETH/DEGEN LP strategy. And join us on the /degen farcaster channel to connect with like minded LPs!

The L2s are heating up! Uniswap just announced that more than 2 million people have used Uniswap on Eth L2 chains. And the markets seem to be cooling off for a bit.

However trading volume But LP profits are still stable with the newly launched WETH/SatoshiVM pool garnering > $2.1 million in fees...with a lot of LPs making 5 figure APYs.

In other news @chef describes their tale of loosing $30k by depositing to an empty BONK/GECKO liquidity pool on Meteora (SOL) and getting arbitraged (rekt) by an MEV bot. It's a good cautionary tale to people looking to LP using two memecoins and not double checking everything you are doing.

chef 🍝

@positiveplayer9

I lost 1.7B $BONK on @MeteoraAG the other day

Here’s what happened, my takeaways, and what you can do to avoid being in a similar situation

319

1:39 AM • Jan 15, 2024

YLDR

Are you looking for more yield on your Uniswap V3 position but short on capital? Maybe your V3 position has been performing well and you want to double down on it? Or maybe you want to use your Uniswap position as collateral for loans?

Introducing: YLDR, a fast growing ecosystem for LP derivative markets, focusing on Uniswap V3 LP positions.

• Leverage your LP Positions

• Supply assets

• Borrow assets using LP positions as collateral

Amplify Your LP Returns

With YLDR, you can now leverage your Uniswap V3 positions to amplify your returns and even make money arbitraging on market conditions based on which asset you borrow.

YLDR is a recently launched two-sided marketplace that is quickly gaining traction, already attracting over $260k in supplied assets collectively on ETH and Arbitrum.

YLDR's intuitive platform makes it easy for LPs to borrow particular assets in accordance to their concentrated Uniswap V3 position.

Arbitrum's low fees has made lending and borrowing appealing, with half of the supply on Arb already borrowed.

This allows you to deposit into relatively safe pools of stable pairs and leverage even more capital towards generating fees. Or place hedges against volatile assets to multiply the gains from the price difference.

YLDR determines a borrow and lending APY based on market demand and fluctuates based on availability of a particular asset.

For example at the time of writing, USDC fetches a very good APY for lenders but for borrowing, it is too expensive.

On the other hand, ETH offers a good borrow APY and is a good choice if you want to leverage for the ETH and Stable pairs pool.

With any market offering leverage, liquidation is important to keep in mind. It's important to limit and control exposure to not lose your position.

When you are about to take a leveraged positioned, YLDR gives a clear breakdown of your liquidation threshold as well as your borrow APY.

The APY on your borrowed assets is a key consideration, as an excessively high rate can erode profits and potentially even cause the position to lose money over time. So it's a good idea to keep a reasonable margin in your LTV and liquidity threshold while at the same time keeping an eye for the fee for borrowing an asset.

One think to consider here is that there is also an opportunity here to arbitrage your CL position based on the split of your provided liquidity, earning multiple times the fees & the price difference appreciation.

Strategies for Bullish or Bearish Outlooks

Let's say you are bullish on ETH and you want to leverage your ETH/USDC position.

If you think ETH will go up ⬆, and you have a position with 40% and 60% USDC, then you will slowly accumulate more ETH. And you also have leveraged your position 3x using YLDR borrowing only USDC.

Now when ETH goes up you make 3 times the rate for both fees and the underlying asset appreciation. And, remember here you borrowed only USDC from YLDR, which means that your borrowed asset has not appreciated

And if you think ETH will go down, you can hedge against ETH, by borrowing only in ETH on YLDR. Since the borrowed asset is down in USDC value, you can exit your position profitably.

Borrow and Supply assets

What's more is that YLDR also allows you to put your Uniswap V3 positions as collateral to borrow any standalone asset like USDT or ETH.

In addition to that, you can also be a supplier of an asset that provides the necessary funds to LPs for their leveraged positions. Depending on some factors, it could be a healthy APY.

Here is an example of the supplying and borrowing rates on YLDR. These can vary by a lot given market demand and supply.

There are quite a few factor when considering leveraging your Uniswap positions. And in certain cases where the market moves in your favor, leveraging your LP can be incredibly profitable. Head on over to their app and see which positions you can leverage and maybe even supply some of your assets to other LPs!

disclaimer: We would like to thank YLDR for this sponsorship with Poolfish.

Poolfish Launches on Thena & Kinetix

In an ever evolving quest to provide the most diverse set of tools in the LP sphere, Poolfish now supports Thena and Kinetix LP calculators on our website.

Thena is a AMM based Dex focused on the Binance Smart Chain with a TVL of $28 Million. Thena.fi offers single sided LP positions to minimize IL and make the process of LPing easier through their 'vaults', where they manage your deposited tokens and try to maintain it's percentage at a high share in the position (65-95%).

And Thena is seeing a spike in their generated fees. For new LPs this could be a great way to break into DeFi.

And Kinetix Finance is a platform that offers different financial services like a trading exchange and derivative markets. It's also working on developing new solutions for banking and capital markets using data, AI, and interoperability (Automated Liquidity Management). Kinetix has a TVL of $15.98 Million

Both the chains are picking up steam in this bull run and you can check out all their liquidity pools on Poolfish:

Thena

Kinetix

Top Pools of the Week

High-Risk

MATIC/USDC & ETH/ARB in the exotic pairs category for the ones feeling adventurous.

ETH/ARB is one of the supported pairs on YLDR

Low-Risk

XEN/ETH & MAGIC/ETH for the balanced swimmers.

Safe

cif/ETH AND VXV/ETH in the 5bps category for the cautious paddlers.

That's all for this week LPs. See you in the next Poolfish edition!

The tides are turning as now ETF money is running through the markets. Volume through Dexs has also seen a notable increase since crypto apps and especially Defi has been garnering a lot of attention. Speculations on the ETH ETF is also on the rise since BlackRock's Larry Fink "See Value in Having an Ethereum ETF".

Undoubtedly, the ETF has been likened to a trojan horse. . What we are looking for is Wall street actually using Bitcoin.

Pools like PNDC have seen record volume and fees on Ethereum ~ 262k in 7 days

with a TVL of $2.64 M just on the 1% tier

And the TVL for the POND dex itself has skyrocketed

However most of this is the massive surge in price for ETH this week.

You can check out PNDC pool here 👈🏻 with now a better and improved !!!pool exploration experience!!! (but more on that later)

you'll find some really profitable positions for the PNDC/ETH pool.

Especially if you sort by 'SHORT' strategy and sort by ascending Fee APR

And while there are much more fees generated by Ethereum than on Arbitrum, Arbitrum is leading the way in number of LP positions created as per a 24 hour basis at nearly 5 : 1.

While stable pairs are now generating well into 7 figures on a weekly basis.

On the docket 🔵🔵 this week:

• Poolfish Pool explorer gets Supercharged

• revert launches collaterizing Uni V3 positions.

• Gauntlet's research on automated liquidity management

A more powerful 🔶 Pool Explorer

You can expect all the PoolFish to be getting a major revamp in the coming weeks

And we are starting with an enhanced Pool Explorer tool that now includes advanced search capabilities, allowing users to filter liquidity pools by blockchain network, DEX and fee tier, from just ONE central point enabling you to seamlessly sift through liquidity pools

There are so many knobs to turn here that you can surely explore a ton of new pools and chains since it's all in one place. The design is geared towards making discovering pools a lot more faster than other solutions and you can expect it to get even better in the coming weeks.

Revert Lend

Revert Finance just launched a specialized lending protocol tailored for liquidity providers on Uniswap v3 to use their positions to secure loans.

You can collateralize your Uniswap LP tokens in automated smart contracts called Vaults. The Vaults let you borrow other tokens, almost like taking out a decentralized loan with your LP tokens as collateral.

The interest rates are set automatically based on supply and demand - no need to negotiate rates individually. And the protocol is designed to be non-upgradable, meaning no changes can be made after launch, so users can feel confident locking in their assets.

Under the hood, the protocol uses ERC-4626 Vault architecture.

And flexible "position transformers" give more control over managing your collateral over time.

So basically liquidity providers get the most out of their positions - collateralizing them to secure loans, while continuing to earn fees and having access to professional liquidity management.

Which Automated liquidity management is the best?

Gauntlet has taken deep dive into liquidity management protocols in order to figure out how their performance comparisons across investment themes.

The study revolved around Arrakis, Mellow and Gamma Strategies.

They divided the liquidity pools by constituent asset types - stablecoins, BTC, ETH, and other exotic pairings. Their method was calculating historical yields using both price-neutral changes as well as USD returns.

In conclusion their study showed that different protocols are effective in different asset types

They also split the analysis into:

Range-Based Strategies

These involve optimally spreading liquidity across different price intervals and dynamically shifting funds based on market price movements or other trigger logic.

Capital Efficiency Strategies

These involve concentrating capital in specific fee tiers or very narrow ranges to maximize returns on active liquidity.

Their results concluded that no two liquidity management protocols were same and were doing well in different tiers of investments, with each specializing in distinct investment niches and catering to varying risk-reward profiles.

Arrakis

Gauntlet evaluated Arrakis's core v1 and v2 architectures, highlighting v1's usage of permissionless single-position vault strategies and a distinct emphasis on stablecoin exposure. They noted extremely profitable grandfathered leveraged stablecoin positions, though opportunities for new exposure remain limited. The grandfathered positions are just old users who haven't closed their positions and now catering to 90 percent of the TVL has massive fees on V1 Arrakis.

Arrakis mainly employs two strategies for Liquidity management:

Cross fee and Multiple positions. Both are self explanatory and mean to diversify your investments in order to optimize it.

To wrap up Arrakis seems to be less volatile in terms of profits and is great for stable pairs management.

It is also important to remember that incentives and staking derivatives also come into play to make LPs even more profitable from Arrakis.

Gamma

Gamma offers support for the most number of chains and pairs out of the three and employs two methods of managing liquidity positions:

Dynamic Range Strategy: Automated rebalancing of liquidity ranges based on price triggers, with user customization of range width to balance impermanent loss vs fee generation.

Stables Strategy: Historically-based stablecoin liquidity ranges, not dynamically adjusted, offering reduced price volatility exposure.

While Gamma was very profitable it was partly in due to it's generous incentive structure;

"When we broke down Gamma’s returns to isolate the external components of APY, we saw that external incentives made up about half of the pool APY on average. "

Mellow

Mellow is the most sophisticated one of the three and employs multiple creative methods to balance and deploy your LP positions.

Fearless Gearbox Strategy:

Leveraged Curve/Convex stablecoin LP positions to amplify yield through composability.

Uni V3 Boosted Strategy:

Concentrates Uniswap v3 liquidity in narrow ranges, reallocating remaining capital to yield protocols and minimizing inactive funds.

Pulse Strategies:

Rebalances volatile Uniswap v3 ranges upon price movement triggers to limit impermanent loss while integrating 1inch to reduce trading costs.

Tamper Strategy:

Utilizes multiple Uniswap v3 vaults with liquidity shifts between them based on price positioning, also hedging oracle risk via data aggregation.

Mellow offers automated liquidity management vaults with varying strategy performance and transparent reporting that shows some vaults generate compelling yields from trading activity alone, without relying on external incentives, but then again also has a lot of volatility.

Conclusion

Mellow stands out in it's BTC vaults and stands out as the most competent among the three ALMs using the most LP strategies but keep in mind that entering and exiting LP positions multiple times can 'realize' impermanent loss.

As for Arrakis and Gamma, their incentive structure and lack of public data made it hard for the study to give concrete results but with incentives both have proved to be quite profitable.

ALMs are revolutionary ibn the LP world and in the future there could be a lot merging of V4 hooks with present day liquidity management protocols.

Top Pools of the Week

High-Risk

CPOOL/USDC & PNDC/ETH in the exotic pairs category for the ones feeling adventurous.

Low-Risk

MMX/USDT & PYR/ETH for the balanced swimmers.

Safe

DAI/ETH AND ETH/USDT in the 5bps category for the cautious paddlers.

That's all for this week. Let us know how you like the new format of our Pool Explorer tool. We love feedback!

It's a good day to be an LP on Arbitrum.

Arbitrum L2 has etched its name in DeFi history since it became the first L2 to eclipse ETH L1 in volume on the 4th of January while also becoming the first L2 to achieve over $1 billion in volume on Uniswap.

Being an LP on an Arb Dex is great. That is unless you were affected by the Gamma Strategies (Arb based) hack which lost roughly $6 million of LP deposits. And this isn't even the biggest hack of 2024. One day before this Radiant Capital Hack lost $4.5 million and Orbit Bridge got hacked for a staggering $81.5 million.

Furthermore, the crypto markets are in grips of BTC ETF rumors.

Thinking of hedging your bets on the ETF news ?

⬅ here's an idea

This week on the docket:

• Why Arbitrum is ripe for LPs

• Gamma Strategies Hack

• Dynamic fee paper by atiselsts.eth

Arbitrum leads the L2 Market Share

Arbitrum's airdrop might have sparked initial interest, but its impressive near 50% market share in Eth L2s is a testament to its sustained, independent growth. This week we saw Arb take over Eth L1 as the most used chain. L2 volume overtaking L1 Eth was anticipated for a long time but was still a moment of triumph and vindication, marking a pivotal chapter in the scaling saga of Ethereum.

While Uniswap holds a prominent position on Arbitrum, GMX ($227.57M pool size) has emerged as an alternative raking in nearly $340,322 in fees in the last 24 hours. GMX allows for leveraged trades and has been a popular choice for traders, while LPs make money from from providing liquidity, swap fees and also from liquidations and funding the leveraged trades.

Camelot is also a popular DEX choice, becoming one of the most popular exchanges on ARB.

LPs seem to be gravitating towards ARB, with nearly 3000 positions opened in the last 24 hours. Apart from stable pairs and Arb pairs, consumer apps are also rising on Arb with XPET, BPET(fren.pet clones) with a 24 hour volume of $5.69 million. XPET and BPET achieved nearly 53,000 thousands trades with nearly $200,000 generated in fees

Meme tokens also present ample opportunities for LPs, with NOLA and SMOL pairs among the most popular pools on Arbitrum.

With low median transaction fees of around 30 cents, Arbitrum offers an on-ramp for new liquidity providers just discovering DeFi.

Some LP pools on Arbitrum that you can discover right from the Poolfish tool are:

MCB, a token by mux.network; a leveraged trading protocol.

Pendle Finance lets you trade future yields

Check out some other pools on Arb here

Gamma Strategies Hack

Gamma Strategies is DEX based on Arbitrum, recently got exploited for nearly $6M million on the 4th of Jan. The attack vector was a vulnerability that was identified in vaults that allow users to trigger deposits while using liquidity ranges based on the current price of assets.

By manipulating liquidity, triggering a deposit, and swapping at inflated prices, the attacker siphoned reserves from the vault.

Consequently Gamma Strategies' Volume fell by more than 50%

In response to the $6 million exploit, Gamma has committed to fully reimbursing the 253 affected accounts. They are also attempting to engage the hacker to potentially recover some portion of the stolen funds.

Gamma's handling of the incident has been professional - with a transparent claims process for victims to dispute losses if needed. And the team seems focused on enhancing the protocol's security to prevent future attacks.

Dynamic Fee Study

atiselsts.eth has conducted a study that provides a framework for thinking about dynamic fees in relation to curb the problem of toxic flows.

Toxic flow are LVR/arbitrage trades which ends up hurting LPs by causing sudden price swings against DEX pools. This increases impermanent loss for LPs and eats at LP profits.

Their core goal was to improve LP profits by correctly pricing volatility risk in pools with fixed fees like in Uniswap V3

The study analyzes metrics like depth and volatility to showcase scenarios where preset fixed fees underperform, and evaluates different types of dynamic fee approaches in addressing these issues which are ultimately a "lose/lose for DeFi."

Some techniques to study a dynamic fee was:

• Volatility-based - Tie fees to historical volatility data

• Lookback method - Set fees based on profitability of external pools over lookback period

• Price oracle - Increase fees if trades diverge from oracle price

• Price momentum - If recent pricing already moved in a direction, charge more to trade further in that direction

A dynamic fee hook has been one of the most anticipated feature in the upcoming Uniswap V4. And this study proves that LP profits can be increased and LVR hunters can be discouraged.

They also do however, acknowledge that implementing a dynamic fee could also hurt LPs especially if they implement a fee based on historical data. Their findings also suggest that lower fee tiers for volatile assets may not be desirable with especially toxic flow. It's important to note that this study was based on volatile pairs and stable pairs. Stable pairs might fair much better with dynamic fees.

It seems we will only figure out well dynamic fee structures perform against fixed fees when Uniswap V4 launches.

Top Pools of the Week (On Uniswap ETH)

High-Risk

FLC/ETH & COMP/ETH in the exotic pairs category for the ones feeling adventurous.

Low-Risk

1CAT/ETH & ELON/ETH for the balanced swimmers.

Safe

USDC/ETH in the 5bps category for the cautious paddlers.

While Arbitrum has the lead on Uniswap, lots of L2s are seeing action. For novice LPs, this boom presents an easier on-ramp and with Uniswap V4 on the horizon, the possibilities seem endless.

L2s are gearing up in this bull cycle and are being widely adopted. If you want to search for profitable pools, Poolfish Pools explorer has all major L2s listed.

Till next week. Happy LPing!

Defi has been central to the surge in crypto in the past 2 months and it seems like the trend is likely to go on. Prospects for LPs seem better than ever with L2s now picking up steam while ETH L1 is now classified as a B2C business. Solana and ETH battle it out, with both equally getting attention of web3 builders. LPs should get ready for 2024 as they are going to be an intrinsic value to every part of Defi which is going to get a whole lot more complex.

In-fact ETH seems to be roughly half of the entire DEX share

while Uniswap seems to have the lion's share.

On the Docket this week:

• Arbitrum gets 1 million LP Positions

Arbitrum (One) Million LP positions

Arbitrum just crossed 1 million LP positions on Uniswap, the first L2 chain to do so. (Polygon has more than 1 million too to but it's a side-chain!). Arb started out out in 2021 and is based on optimistic roll-ups. This year it really took off amid their airdrops and a controversy of dipping their hands in the treasury despite a DAO vote against it, Arb has persevered and become the most used L2 chain. You can see for yourself how Arb blows every other L2 out of the park

There are a lot pools to be discovered on Arbitrum through our tool. Check out them out here

Until now nearly ~2500 ETH has been used as gas on ARB on the Uniswap Router, this was nearly half two months ago, which tells us how much the chain is in demand.

In terms of TVL, Arb is multiple times bigger than other L2s:

Arbitrum: $262.06M

Optimism TVL: $42.5M

Polygon TVL: $67.45M

While the majority of the pool activity seems to be in stable coins and the Arb token itself, there are a plethora of coins in Arbitrum pools like LINK, GMX, MAGIC etc with thousands of of trades with MAGIC-WETH 30bps pool making ~$90,000, GMX-WETH 100bps making ~$56,000 in the last 7 days.

L2s still have a long way to go before capturing the volume of L1 ETH. However, their low gas fees make them ideal for onboarding new retail liquidity providers, and Arb is leading the charge.

Uniswap V4 and the coming wave in 2024

@boredGenius on twitter perfectly encapsulates the upcoming excitement around V4 of Uniswap which introduces custom hooks
"Hooks turn Uniswap from a single DEX to a universe of DEXes: instead of having to reinvent the wheel, devs like me get to build our own DEXes on top of Uniswap’s established infrastructure and unparalleled non-toxic order flow."

@boredGenius is building a DEX called Bunny v2, and they are trying to address some pain points of the current Uniswap experience. Their concepts of tailored liquidity and shifting liquidity give you more control over your liquidity provisioning strategy. You can fine-tune your liquidity curve and automatically adjust your position based on market conditions. This can help you maximize your fee income, minimize your impermanent loss, and reduce the amount of time you spend managing your liquidity position.

zefram.eth

@boredGenius

Uniswap v4 is going to change everything, and you’re not prepared.

You probably have heard of Uni v4 and its “hooks”. To the untrained eye, Uni v4 is only an incremental update like a new iPhone.

To devs like me, however, Uni v4 signals a revolution in the largest market…

363

1:30 AM • Dec 22, 2023

Bunny is just one of the innovative DEXs being offered, and paves way for a future where DEXs are more than just a Uniswap clone/fork. Offchain data allows for even more functionalities. 2024 will be a different world with many more options LPs.

• 

  Artemis

  @artemis__xyz

  

  Stablecoin liquidity has risen by $6 billion over Q4 2024.
  
  It remains down by over $19 billion for the year.
  
  Where do you see stablecoin liquidity in 2024

  

  12

  8:00 PM • Dec 28, 2023

Aperture's new Recurring Rebalancing tool

Aperture is launching their new Recurring Rebalancing tool.

With the Recurring Rebalancing tool, you can create your own Uniswap V3 strategies that will automatically rebalance themselves based on your preset parameters. This means you can set it and forget it, and your liquidity position will always be optimized for the current market conditions.

With the Recurring Rebalancing tool, you can:

• Create custom liquidity curves that match your specific needs.

• Automatically rebalance your liquidity position based on price, volume, volatility, and other market conditions.

• Minimize your impermanent loss and maximize your fee income.

• Save time and effort by automating your liquidity provision strategy.

Here's a short demo by @phtevenstrong

Stephen TCG | DeFi Dojo

@phtevenstrong

This is nuts.

@ApertureFinance created a Recurring Rebalancing tool that allows you to create your own Uni V3 strategies that will rebalance in perpetuity according to your preset (but editable) parameters.

This tool should be publicly available in a couple weeks.

130

9:57 PM • Dec 28, 2023

Don't discount Solana

Solana may not have a Uniswap V4 equivalent but it certainly is doing amazing numbers in Volume. Here we see Solana based Raydium doing impressive numbers in volume everyday.

Solana stable coins are on the rise aswell. This growth is further fueled by Solana's status as a favorite among venture capitalists, the recent surge in meme coin popularity and due to speculations around airdrops.

This trend of Sol's rise may continue in 2024, potentially leading to wider adoption of Solana stablecoins among global users with gas prices as low as Solana offers ~$0.01.

Artemis

@artemis__xyz

Over the past week, the volume of Solana's stablecoin has experienced a significant increase, surpassing $88.49 billion in transfer volume.

This has positioned @solana as the chain with the largest market share of stablecoin transfer volume.

6

7:00 PM • Dec 25, 2023

While all the DEXs are experiencing massive spikes. "Wif Hat" coins have taken over twitter and people are making multiple SOL wallets and spreading small amounts of Sol throughout DEXs in hopes to get multiple airdrops.

Top Pools of the Week

High-Risk

Bonk/ETH in the exotic pairs category for the ones feeling adventurous.

Low-Risk

MUBI/ETH for the balanced swimmers.

Safe

ETH/USDT in the 5bps category for the cautious paddlers.

PS: Don't forget to check out PoolFish's new tool and leave your feedback to a reply on this email.

That's it LPs. See you next week in 2024!

Greetings LPs! This has been one of the more exciting weeks for crypto.

There has been an exhilarating surge of memecoins on Solana and Ethereum, with a myriad of exciting opportunities for liquidity providers to participate in the ecosystem. We are having a lot of fun with memecoins in this phase of the bull market.

The good news is that the consensus this time around is that 'degens' are considered revolutionaries, champions of innovation, pushing the boundaries of what's possible in finance and technology.

atiselsts.eth

@atiselsts_eth

Crazy thing about crypto is that "serious" uses like enterprise blockchain, 99 times out 100, are boring BS.

While stupid shit like memecoin trading or inscriptions actually poses interesting & important challenges, and helps to move the technology forward.

4

8:50 PM • Dec 19, 2023

On the docket 🔵🔵 this week:

• Solana's meteoric rise 🐱‍🏍🐱‍🏍

• LPs bearing cost of smart contract events 🙋🏻‍♂️

• Decentralized socials launching meme-coins 🧙🏻

Solana ecosystem goes berserk!

The rapid growth of meme tokens such as $bonk, $wif, and $coq on Solana has created a fervent trading frenzy. In-fact when looking at token launches on Solana, it seems quite unbelievable.

Take a look for yourself

Ajay Kashyap

@EverythingAjay

5,000 New #Solana tokens launched today alone

Shitcoins season is on

47

6:58 PM • Dec 22, 2023

Here are the LPs entering the world of AMMs with ORCA:

You may have noticed it is directionally proportional to launch of recent new pools on ORCA. And there are now over 40,000 positions open on Orca/Whirlpool.

Here is the number of new positions opened daily:

And just take a look at the number of listings

Solana has emerged as a contender to Ethereum L2s and is the host to the meme-coin frenzy this bull-run and across 380 top pools aggregated by DefiLlama LPs are making an average of ~540% APY, which is about 10 times more than Uniswap V3. If you are an LP, this is indeed an enticing number.

Among the beef of Solana Mobile with Marques Brownlee on twitter and launches like JITO, Raydium etc this season, Solana has been the best performing ecosystem in the crypto space.

Here are some of our handpicked pools:

Back to our bread and butter, Ethereum and Uniswap;

Memecoin frenzy has taken over all EVM chains aswell. There is no shorted of uniswap pools coming in at 18,500 for just Uniswap V3

You want an assortment of meme-coins on Solana broken down by market cap, fees and volume?

Poolfish has you covered: https://dune.com/cryptokoryo/solana-shitcoins

Cost of emitting events for Uniswap is costing LPs:

@0x94305 wrote about the cost implications of events emitted by Uniswap, shedding light on how LPs are the ones bearing this cost.

While arbitrageurs cover some of the costs, this post reveal that a substantial portion of the extra cost is shouldered by LPs, which in turn diminishes the volumes and fees earned by LPs.

"I think it's simple: Uniswap shouldn't emit swap or ERC-1155 events since their cost will largely borne by LPs. (It might still be ok to emit events on cheaper chains and L2s.) "

We also saw Uniswap recap this week. It's clear that the Uniswap brand is strong and many people are using Uniswap mobile app for their LP needs. As the UX for LPs become easier, we can expect the marketplace for LPs to become more easy to enter overtime:

DO YOU WANT A FREE FARCASTER ACCOUNT!?!?!!

👇🏻 Then check out how to get it at the very bottom!

Decentralized Socials, 6-figure LP positions and new token launch pads.

Last week we talked about how a token launch on a decentralized social became one of the hottest meme-coins. Let's take a look at different token launches and the LP positions for these.
1) $POINTS

Hailed as the Bitcoin of the Farcaster network, POINTS was a hastily developed project that raised nearly $700,000 while the developer was asleep. Since then the devs have opened a full range position on the WETH/POINTS pool worth > $200,000. Here is what this position looks like in Poolfish's new position explorer:

Here is the moment the dev went to sleep and then woke up to $500k in the smart contract address

This was the impetus needed for a group of people to go full 'degen' and start aping into projects. It also skyrocket engagement for the community and was one the biggest moments when Farcaster went viral on twitter.

2) $SPAM

Considered one of the most interesting projects to emerge from Farcaster. The intent is to have $SPAM claimable by anyone who writes "$SPAM" to the protocol. It is getting a lot of attention because it's attempting to incorporate indexing and inscriptions on top of the Farcaster protocol:

The pre-mint raised ~ $125,000 and from those funds there is now a position worth ~$50,000 for the WETH/SPAM pool on Base L2 chain.

This really goes to show L2 chains are really proliferating and the advent of meme-coins deployed on ETH L2s is a result of the high fees and congestion on Ethereum's L1. L2s like base and Optimism make it worth while to create use cases like reading reading a an open protocol and allowing users to claim the token based on how many times they spread the word about it. Truly a novel idea.

$SPAM currently has ~$50,000 in the WETH/SPAM pool

Here is how the LP announcement went on Farcaster

3) $wowow

What started as an inside joke within the community, eventually turned into a meme-coin also deployed Base. Here is the link. The WETH/wowow pool currently has three full range positions open:

Farcaster seems to have taken a liking for Base, possibly because the network has a lot of the dev community from Base there already.

But it's clear that Farcaster is home to a legion of builders who are willing to experiment with different ideas and LPs like us can benefit from being there early on and providing liquidity to the people wanting to ape into these.

Why you should care as a retail LP

Well along with the massive full range LPs from the contract deployers, there are a few retail LPs in the pools too. As an example here is a an out of range LP position with still 63% APY.

Farcaster is still nascent, and for people finding opportunity to LP, it may be a non-competitive environment where they can keep track of project launches and provide much needed LP to the 'degens'.

Top Pools of the Week

High-Risk

DOVA/ETH & GROK/ETH in the exotic pairs category for the ones feeling adventurous.

Low-Risk

MUBI/ETH for the balanced swimmers.

Safe

USDC/ETH in the 5bps category for the cautious paddlers.

PS: Don't forget to check out PoolFish's new tool and leave your feedback to a reply on this email.

So how to get that free farcaster account?!?!
It's easy, just use our tools at poolfish.xyz and give us an honest feedback either in reply to this email or just send a separte email at poolfish@newsletter.paragraph.xyz. We'll evaluate the best responses and send the best 2 responses a free farcaster account and pay for your first year.

That's it for this week LPs. Have a great Christmas, we'll see you next week!

Welcome back to another week of LP bemusement and a little bit of chaos in the wider crypto realm. We are seeing LPs making consistent fees and a steadily rising TVL. Our brand-new position explorer peels back the curtain and helps you discover where the the pros are allocating their funds. We also look into apeing into a meme token from Farcaster and the LP opportunities arising from new tokens launched from new social networks.

On the docket this week:

• PoolFish's position explorer hits the scene

• Why people still use Uniswap v2

• $Points - LP on a farcaster native meme-coin

• Ledger exploit almost gets Uniswap app

PoolFish Position Explorer

If you are an active LP, our new intuitive tool gives you deeper insights into the activities of top LPs in the game. One of the most important feature could be sorting by position age to figure out which tokens have recently captured the attention of seasoned LPs. The tools filters out negative PnL positions and shows real-time data broken down by ROI, Fee APY, age of position; of pooled assets along with the concentrated range used by the LPs.

This tool is expanding its reach to embrace more chains and DEXs in the coming days-so keep an eye out!

The suite of tools coming from PoolFish is only going to get better from now on. And you can leave your feedback here.

Uniswap v2 VS Uniswap v3

There has been lively debate going on over at twitter initiated by Dan Robinson over which Uniswap version reigns supreme? and the trade-offs as compared to one another.

Dan Robinson

@danrobinson

Why do people still launch tokens on Uniswap v2 rather than creating full-range positions on Uniswap v3?

287

4:47 AM • Dec 14, 2023

This is an important question given that v4 Uniswap is just around the corner. The tweet received a lot of attention although many answered converged on one point: simplicity.

More users pointed out the difference being the nature of the LP tokens between the two protocols. While Uniswap v3 staking applications are compatible with traditional fungible v2 LP tokens used for reward pooling and liquidity locking, they aren't specifically optimized for v3's NFT-based LP tokens.

adamscochran argues that Uniswap v2 and v3 aren't simply upgrades of each other, but rather distinct products with different goals. While v2 catered to developers seeking a web3 liquidity layer, v3 prioritizes the needs of market makers (LPs) with features like concentrated liquidity and NFT-based LP tokens. This point was emphasized again by this tweet illustrating why v2 and v3 differ in some core aspects from each other:

TradingStrategy.ai

@TradingProtocol

Uniswap v2 and v3 have two different use cases

Uniswap v2
- Illiquid
- Token launch
- Simplicity
- Low IQ devs
- Memecoins
- Pump and dumps, token taxes
- No CEX tokens

Uniswap v3
- Top pairs
- On-chain CEX competition
- Sophisticated LPs
- A lot of infra needed

Dan Robinson

@danrobinson

Why do people still launch tokens on Uniswap v2 rather than creating full-range positions on Uniswap v3?

9

1:15 PM • Dec 14, 2023

Moreover, v2 Uniswap provides a simplistic infrastructure for launching full range liquidity tokens/positions. Meaning you set it and forget it, while for v3 it means having to constantly monitor and rebalancing positions.

@facesOfEth makes the case that meme-coins use a tax using v2 that discourages bots, and v3 only allows a tax upto 1% which is not enough.

Hayden Adams also re-iterated some of these points when trying to answer why v2 is still used instead of v3.

hayden.eth 🦄

@haydenzadams

I gave up on this a while ago lol

Numbers show it’s fee on transfer tokens + some tools for things like liquidity locking and staking rewards that only support v2

New goal: make v4 full range better than v2

32

8:07 PM • Dec 14, 2023

There seems to be a demand for dynamic fees to be a part of a lot of pools so LPs are appropriately compensated for their positions even when activity is low. Uniswap V4, geared to launch in Q1 2024 would address this problem as well. V4 is also aiming to solve for the fragmentation of liquidity by introducing a singleton architecture where all the liquidity would reside and custom logic hooks would leverage this single source of liquidity.

Uniswap v4 boasts flexible hooks that adapt to user needs. It can mimic the simplicity of v2 or the complexity of standalone AMMs, including v3's intricacies.

$Points Taken - Analyzing the birth of $Points and its LPs

Recently, $Points token got a launchpad from Farcaster.xyz where @iammatthias launched a meme-token with little knowledge to how far it would go in the subsequent hours.

For us LPs, Points offers a live masterclass in meme-coin evolution: from small community to Twitter spark to viral sensation and explosive volume growth. In a matter of hours this small cap alt-coin snowballed into a ~$3 million market cap coin. This was of-course fueled by a small but strong community supporting the liquidity and spreading the word.

However as is the fate with all meme-coins, this is after it reached a high of $15 million. Meaning there are a lot of whales looking to dump their coins as well.

$Points has been launched at this address: 0xd7c1eb0fe4a30d3b2a846c04aa6300888f087a5f

and we can see that LPs made a staggering $58,000 in the past 24 hours:

but we can see that many LPs have sky-high ROIs on their positions, with narrow positions making most of the profits here:

For identifying meme coins worth LPing into, it might be beneficial to try out social apps other than twitter, even though twitter remains the breeding ground for a larger audience.

$Points breathed its first on farcaster: so for the future it may be worth your while joining it. It was wasn't long after its discovery for more seasoned LPs to enter the arena.

This tells us that meme-coins has two sides. Apeing into one hoping to make outsized returns from the asset growing. At the same time, getting in early and providing liquidity can be a relatively low-risk way to profit from the hype.

The future of $Points in uncertain as with all meme coins, the possible price at any given time is anywhere from 0 to infinity. So tread carefully LPs.

Ledger Hack

Ledger Connect Kit is a dev tool used in an array of Dapps. Recently one of their team members got phished and had their keys stolen. The keys were used to update the ledger Connect package forcing developers to integrate them in their apps.

This resulted a period of roughly 2 hours where nearly ~$500,000 of funds were stolen from user accounts. The problem has since been fixed.

Ledger

@Ledger

FINAL TIMELINE AND UPDATE TO CUSTOMERS:

4:49pm CET:

Ledger Connect Kit genuine version 1.1.8 is being propagated now automatically. We recommend waiting 24 hours until using the Ledger Connect Kit again.

The investigation continues, here is the timeline of what we know about…

6,671

8:49 PM • Dec 14, 2023

This is a jarring reminder that even established companies fall victim to exploits and in the realm of crypto, and there are new attack vectors being discovered everyday. It pays to be vigilant and keep up with the news as to identify threats early on as a user/LP. There are still ways to go before crypto becomes safe enough for the average user to trust it blindly.

Uniswap front-end almost fell victim to the attack when a malicious user tried to inject their app with this exploit. This was avoided due to the Uniswap team being extra vigilant on who contributes what to their application.

hayden.eth 🦄

@haydenzadams

Uniswap Labs devs live and breathe user security

In september, we received a community PR to support ledger connect, and @jordanfrankfurt decided not to approve it because of the package distribution model

jfrankfurt.eth

@jordanfrankfurt

I love community PRs because it's nostalgic for me. Before I joined labs I would spend my bored time fixing and adding small features to the @Uniswap interface. (@ianlapham was my goto frontend reviewer.)

But sometimes it's spooky! You never know if contributor ==

512

1:06 AM • Dec 15, 2023

Top Pools of the Week

High-Risk

PRIME/ETH in the exotic pairs category for the ones feeling adventurous.

Low-Risk

WBTC/ETH for the balanced swimmers.

Safe

USDC/ETH in the 5bps category for the cautious paddlers.

PS: Don't forget to check out PoolFish's new tool and leave your feedback to a reply on this email.

That is a wrap folks. Reply to this email and let us know what you're thinking about LPing on meme-coins or otherwise. Till next week!

Welcome back LPs, especially the ones who are dreading the meteoric rise in the past few days given their IL. If you are Hodling, then you might just want to stick with BTC and ETH. However, if you're here for the explosive potential of LPing, then buckle up, because we're about to take off!

We take a look at some historical data to ascertain the prospects of being an LP in Defi, which protocols to diversify in, why Solana may not be an ETH killer but a completely different beast on its own and why you should keep an eye out for PoolFish's new arsenal of tools.

On the docket this week:

• State of the LP in 3 numbers and why you should get excited

• SOL DEXs go through the roof!

• Major PoolFish Updates

• KyberSwap saga

Defi in 3 numbers

TVL - It's climbing!

As Dogetoshi among others states, that akin to Uniswap's airdrop in 2021, that ignited the Defi Summer, which saw TVL soaring in a span of weeks and carried the bull market, the recent announcement of JITOsol Liquid Staking token has done the same this winter.

This time around, we have established and much used L2s like Arbitrum and Base on Uniswap. Arb on Uniswap is ranking at number 4 of all the Dexs' trading volume, currently sitting at $2.346 billion. If we were to jump back to this time last year, the TVL was merely half of today. This signals, that Defi protocols are cool once again. Only this bull market is not a by product of trillions of dollars being injected into the economy though stimulus checks, but rather new innovations being launched.

As a whole the TVL for Defi protocols sits at around $50 billion; less than 1/3 of all time high during the 2021 bull market. This tells us how much more room there is to grow for these protocols.

The growth potential of DeFi extends beyond attracting new speculators. Instead, it is fueled by innovative, real-world use cases like DeSci, as outlined by Alex Wacy. These applications encompass diverse fields like longevity, data, and biology, while also offering unique opportunities for liquidity providers to share in the rewards of research breakthroughs.

Crypto and DeFi have evolved at an unprecedented pace since the last bull run, unlocking global participation in DeFi protocols. The middle layer facilitating this liquidity and token exchange is powered by LPs like us, motivated by earning fees.

LP Fees

In a world where Blast L2 now has > $800 million in TVL, the demand for Uniswap and other AMMs like Orca have not slowed down and LPs are continuing to be profitable

The LP landscape is evolving rapidly, and one of the most notable trends is the increasing demand for liquidity from institutions rather than individual investors.

Recently Uniswap announced a partnership with an investing firm called Talos, letting them use their APIs to access liquidity which in some cases fares better than CEXs. What this means is that the demand for liquidity will keep on rising and DEX liquidity will be in demand from more sophisticated and volume consuming Tradfi institutions.

Trading Volume

Just within the Ethereum ecosystem there have been significantly more activity within Dapps built on EVM chains. Everything from bridging and swapping generates fees for LPs and signals that the ecosystem is alive and people are engaging with it. In just the last 7 days, DEXs have had a weekly volume of ~$25.8 billion, which is a rise of ~37% week over week!

If that doesn't tell you that the market is ecstatic right now, then here is some more signal:

This chart by sixdegrees on the right suggests that the number of transaction on DEXs is growing at a steady pace and if crypto adoption continues throughout the next few years, it might be exponential.

While this one on the left shows that the number of new adopters remains steady, meaning more and more people are now interacting with blockchain apps.

Recently we are seeing novel cases such as Multibit (MUBI), known for its bridging capabilities between ERC20s(ETH) and BRC20s(BTC) has been one one of the most widely traded asset pairs (WETH/USDC) with a trading volume of $68.28 Million just in the last 7 days. And it has raked in more than $680,000 for LPs in the last 7 days as well.

And we haven't even talked about Solana

JITOsol, a liquid staking platform just made their airdrop available causing a surge in the whole market. JITO already has > 6M Sol staked and has given the Solana ecosystem a new life.

JITOsol has become one of the most widely staked protocols in Defi and JITOsol is already one of the most popular pools on Orca, while at the same time taking the trading volume to all-time-highs. This caused the price of Solana to balloon up to $73. Just to give perspective, this a 15% increase in a single day! While the JITO token, intended for the governance of the protocol has also fared incredibly well.

Peer into Pool Profits with PoolFish Position Explorer

Let's say you'd like to see which of the top positions are opened in a pool. And maybe you'd like to see a big picture of where the liquidity is concentrated within the pool WETH/USDC along with. Well, you would love what PoolFish has in store for you in the coming days.

You'll be able to see all of the best performing positions. We're starting out with Uniswap Mainnet and then adding other chians. You'll be able to explore how people are performing with all necessary information like the age of their position, their APY, and PnL. It's not quite ready yet but stay tuned!

KyberSwap

The KyberSwap exploiter has gone rogue. This fishy villain has a complete disregard for people's money and is not willing to settle for anything less than a complete take over the KyberSwap AMM.

In one of the most bizarre on-chain messages in history, but admittedly in a sophisticated fashion, the Kyber Exploiter was willing to compensate the company, its stakeholders and employees their losses as well as...severance packages... Then in the same breath promises LPs only half of their assets, telling them its more than they deserve.

This is a reminder that interacting with any Dapp without understanding the smart contract is essentially a form clicking 'accept' on terms and conditions, with all risk on part of the consumer/LPs. Although the casual user cannot be expected to understand and scrutinize every part of the software that they consume.

So far Kyber clawed back $5M through some snazzy front-running maneuvers, while they exploiter has been trying to move money around to different wallets. We are sure there is more happening in the background, but till this resolves...the saga continues...

Top Pools of the Week

High-Risk

ETH/TITANX in the exotic pairs category for the ones feeling adventurous.

Low-Risk

GNO/ETH for the balanced swimmers.

Safe

ETH/USDT in the 5bps category for the cautious paddlers.

And this was our report for the state of LP in 3 numbers Let us know by replying to this email what you thought about this. Till next time Happy LP-ing!

We usually try to get the Poolfish newsletter out every Friday. But hey, sometimes we have too much turkey and have to loosen our belt. So here's the newsletter for last week 2 days late!

It's never a boring week in the LP space. This week we saw an attempt at a hostile takeover of KyberSwap, many $GROK/$GFY tokens launched (some even becoming among the most profitable pools on Uniswap). The bull market is on the horizon. Fear and Greed index is now inching towards Greed and people are ready to be overconfident and extend their risk profile. The promise to make generational wealth hinges upon the next antic from Elon Musk. Very reminiscent of the last bull market.

On the Docket this week:

• Meme token liquidity is rising

• Uniswap Research: Private mempools working as they should

• LPing on Solana is better?

• Liquidity tool by Austin Adams

News Cycle/Meme Tokens are back

In the past few weeks we saw GROK taking over as one of the most profitable pools for LPs. Currently the WETH/GROK pools sits as the third most profitable pool on Uniswap V3 and has accrued $344,752.50 in fees just in the last 7 days. This token is the one based on the new X AI chatbot.

Another token $GFY launched right after Musk's recent interview. This pool is about two days old and has a TVL of $313,000 and is also raking in fees.

While meme-coins may seem like a good opportunity, the risk with these is one of the highest. So proceed with caution.

Just like prediction markets, there are now speculations that for every major news cycle, there could be an accompanying token and thus a LP pool.

Imran Khan

@lmrankhan

Meme coins will become commoditized to the point where there will be a tradeable ticker for every major global news, sports, geo-specific events on the planet.

You are seeing some sparks of this with the recent announcements by CZ, Grok, and others over the past few years.…

30

1:23 PM • Nov 28, 2023

But timing is of the essence when LPing in meme coin pools.
As an example take the address : 0x721cf5873d65556f8632feba7fb12a73a5feb22e
They have two open positions:
- A 6 hour old position in GFY/WETH has a PnL of $153.62.

- And a nearly day long position for GROK/WETH, but a today the twitter for GROK @grocerc20 got banned and the price fell swiftly. And our LP now has a negative PnL on it.

While many liquidity providers (LPs) are undoubtedly making much more LPing in memecoins, the potential rewards can be substantial - but you can lose big too!

Uniswap Private Mempool analysis

The Uniswap team conducted a research based on data from 500,000 trades on the USDC-WETH and PEPE-WETH pools. Why would they go through old data? Well to make sure that the none of the trusted private RPC providers were siphoning off MEV from the private mempools. Using on-chain data, they tried to determine whether or not the top five RPC providers re-ordering blocks using a novel metric called "reordering slippage".

"Reordering slippage measures the difference between the actual slippage of a swap and the average slippage of the same swap with the entire block randomly ordered. "

The crux of this study proves that this is a viable method of keeping RPC providers in check as they are essential to mitigate MEV in AMMs but also have access to data that can be used to sequence blocks in their own favor. This means that traders would never suffer significant losses due to the manipulation of RPC providers sandwiching trades.

LPing on Solana

The "Uniswap" of the Solana Chain are Phoenix and Orca. Orca(Whirlpool) is spiking as SOL reaches new heights and breaks $60 with Orca generating ~$900,000 in fees for period of 20th Nov - 27th Nov. Given the rise in prices in the past 7 days we can expect it climb even higher for the coming weeks to months.

This is a reminder of how Solana is one of the notable players in the L1 crypto space being one of the only popular L1s that are cheap for real world applications.

@ceterispar1bus highlights how Solana price and Dexs on the Solana chain corelate

Here is a graph that illustrates the increasing trend of people bridging to SOL. It shows an rising trend as SOL may promise LPs a brighter future.

@mrink0 even makes case that LPs on Solana(Phoenix) are more profitable than LPs on uniswap

Remember last week when KyberSwap was hacked? Well now we know that multiple DEXs, especially on Solana, have the potential to LP healthy amounts of fees. So there is no reason to put all your eggs in one basket.

Smol tool Big picture

Austin Adams opensourced their package to create a mesmerizing graphs that illustrate the movement of concentrated liquidity in pools over time. Which pool would you like to see the data off? Let us know in a reply to this email.

storm (📊🎁 Advent of Crypto Data 🎁📊 arc)

@notnotstorm

𝓐dvent of 𝓒rypto 𝓓ata, DAY

how many times have you told yourself “today is the day I learn Uniswap v3 math”?

well today might finally be that day...thanks to @AustinAdams10's new Uniswap lib, there’s now an exact implementation of v3 math in python

Austin Adams

@AustinAdams10

𝓐dvent of 𝓒rypto 𝓓ata, DAY

Happy to release the package behind the ever popular @Uniswap v3 liquidity distribution gifs!

Written in polars, anyone can maintain multichain Uniswap v3 data, calculate arbitrary swaps at arbitrary times, and generate state variables from v3

40

10:25 AM • Dec 2, 2023

Top Pools of the Week

High-Risk

in the exotic pairs category for the ones feeling adventurous.

Low-Risk

gOHM/USDC for the balanced swimmers.

Safe

USDC/ETH in the 5bps category for the cautious paddlers.

This is all for this week folks. Tune in next week for the next wave of twitter inspired meme-coin LP opportunities and more LP related news!

Welcome back LPs and Happy Thanksgiving🦃! The past 7⃣ days were once again some of the most overwhelming in the LP and Defi space. From a "3/5 multi-sig" L2 yield platform (Blast💥) accumulating > $300 Million in TVL to one the most notorious attacks on an AMM (KyberSwap), it's clear that the Defi realm is still rife with risk. However, progress and innovation continues as well!

On the docket 🫐 this week:

• KyberSwap loses $50 Million to a napping exploiter

• SUClave V4 Hook battling LVR with auctions

• $UNI price goes ⬆ by >20%

$UNI to the 🌙

Uniswap's(UNI) price has surged 21.92% over the last 7 days reaching $6.30 (tho still very far from it's all time high of $45), as well has made WETH/UNI one of the top performing pools with $141,804.82 in fees generated in the past 7 days!

There could be a multitude of reasons for this surge, but recently Uniswap announced a proposal that seeks to give some delegates tokens worth $60 million. This proposal is now up for on-chain voting, and was hailed as a good decision for on-chain governance.

KyberSwap $50 Million hack

On the 23rd of November, KyberSwap was drained by this address:

0x50275E0B7261559cE1644014d4b78D4AA63BE836

Focusing on the Ethereum ETH/wstETH pool, the attacker utilized a flash loan to manipulate the pool's liquidity. Starting with a significant loan of wstETH, the attacker executed a series of swaps to manipulate the pool's price. This involved first injecting and then withdrawing liquidity in a calculated manner to create a "fresh canvas" on the liquidity curve.

By careful control of swap quantities, the attacker tricked the pool into thinking it had more liquidity than it actually did. This manipulation was achieved through a subtle flaw in Kyber's swap step calculation. The swap step check failed by an infinitesimal margin("The check failed by <0.00000000001%"), a testament to the precision engineering of the exploit. This failure led to the "infinite money glitch". For a more in-depth report, see @0xdoug's analysis.

Doug Colkitt

@0xdoug

1/ Finished a preliminary deep dive into the Kyber exploit, and think I now have a pretty good understanding of what happened.

This is easily the most complex and carefully engineered smart contract exploit I've ever seen...

2,667

2:02 PM • Nov 23, 2023

An individual approached the hacker to discuss fund recovery terms. Intriguingly, the hacker agreed to negotiate, but only after...they take a nap.

Why should LPs care about this

Automated Market Makers are nothing without their LPs 💗.

Oversights in smart contract audits has to be the most foolish reasons to have people loose faith in your DEX.

KyberSwap's Total Value Locked (TVL) has plummeted to approximately $8 million, a staggering tenfold decrease from its pre-hack levels. This drastic reduction has left the Automated Market Maker industry in tatters.

What is really concerning about this hack is that this was a variant of an already discovered hack. @atiselsts.eth pointed out that this was an oversight by the KyberSwap team.

atiselsts.eth

@atiselsts_eth

Far too pessimistic take.

There was a smoking gun — the initial double-counting bug report. After the report, Kyber could have:
1) Done extensive fuzz-testing
2) Tried to do some level of formal verification
3) Paid for a re-audit of the core
Did they?

mert | helius.dev (d/acc)

@0xMert_

not FTX, not SEC, not even Luna

this might be the most bearish tweet re: DeFi that I've ever seen

no matter how much you prepare — there are attackers with infinite time and patience trying to rob you

1

4:40 PM • Nov 24, 2023

However, effectively countering attackers and preventing exploits is a formidable challenge given the nature of Defi and AMMs. Hayden Adams, Uniswap's founder, underscored their rigorous contract testing, yet admitted to lingering concerns about potential oversights.

One of the victims of the KyberSwap stated that they lost 63% of their net worth to this attack. This is why LPs should aim to invest in multiple AMMs as to reduce their risk.

Our key lesson: Diversify! Explore numerous Layer 2 and other low-fee chains to avoid the steep gas costs associated with creating positions. You can provide liquidity for the same asset pair across chains and DEXs. Don't be the guy who looses all their portfolio to a single hack!

LVR Hook-SUClave

Recently @doganeth_en introduced a new AMM design building upon V4 hooks that aim to mitigate the LVR problem and make AMMs smarter by taking the profits that bots siphon off and redirecting them to LPs.

This is a clever principle of beating the fast-moving MEV bots to the trade. MEV bots capitalize on the potential profits that Liquidity Providers (LPs) miss out on by quickly trading during price spikes.

SUClave is a V4 Hook that uses SUAVE. SUClave hook is deployed to interact with the Uniswap Pool Manager.

SUAVE introduces a unique auction system where developers can freely place bids for transactions. Each bid comes with a special 'signature' from SUAVE, acting as proof that the bid is legitimate and comes from their auction. This makes it easier to confirm and accept these bids on the Ethereum network.

The auction serves to democratize access to transaction execution, making it a competitive process rather than one dominated by bots. It also creates a new revenue stream for LPs, who now benefit from the auction proceeds.

SUClave V4 Hook is designed to only accept transactions that are verified as coming from a SUAVE auction. The main allure for the bidder is gaining priority for the transactions. By winning the auction, they get a chance to capitalize on profitable transaction sequences before others.

The highest bidder wins the right to execute their transaction. The bid amount, essentially the price paid for transaction priority, is then distributed to the LPs.

As the creator of SUClave Hook, Dogan says, it will not completely eliminate MEV bots but instead their goal with the hook was to "explore options for a "benign" form of MEV".

The proposition paints a captivating picture; that as LPs become more profitable, this could attract more LPs to the market. And this in turn reduces the cost and slippage-> less fees and smoother trading!

Top Pools of the Week

High-Risk

BYTES/ETH in the exotic pairs category for the ones feeling adventurous.

Low-Risk

wNXM/ETH for the balanced swimmers.

Safe

USDC/ETH in the 5bps category for the cautious paddlers.

This was another thrilling week to be an LP! Let us know what you think was the most interesting thing you happened upon in reply to this email and we might send you 💗 emoji back.
Until next week, take care 🐠!

Welcome back to our weekly LP wrap-up of the week! Price fluctuations and whales buying and selling have generated significant fees for LPs this week. This week we look at hook development, the premier DEX on Solana, and an impersonator launching a fake Poolfish token.

State of the LP

WETH/USDC

This asset pair remains one of the most popular, generating ~$1,465,000 fees for LPs this week. USDC is of the most widely used consumer cryptocurrency and ETH is the bedrock of all modern day crypto centric applications, even CEXs. After all the volume for this pair in the past seven days was > $2.3 billion . Want more analysis on this pair's most popular tier? Check out here.

Below is a recently created position with 264% APY with $66,270 provided in liquidity in the WETH/USDC 0.05 fee tier pool.

WETH/LINK

LINK by Chainlink is also a volatile coin. Traders and LPs love LINK, in-fact WETH/LINK had the largest share of this week's trading volume (~13 percent!) in the 0.3% fee tier. LINK is used to pay node operators who run Chainlink nodes which explains why it's so popular.

Chainlink, a widely-used oracle network that streams data into smart contracts and recently partnered with ChatGPT. Since Chainlink is so popular as software it's own token LINK is corelated with it's success and adoption.

Beware the POOLFISH impersonator

Someone who likes to watch the world burn impersonated Poolfish and launched a fake POOLFISH token on this contract address: 0x7eaefe097F90d8924037E02fc6Ec817F935ebE5c

THIS IS NOT OUR TOKEN-THIS IS NOT AN OFFICIAL TOKEN BY POOLFISH

This is a reminder that the DeFi/crypto world is filled with scammers and sharks. We yearn for a day where such attacks on reputation are so ineffective that scammers don't even stand to gain from impersonating a known brand/figure. Until then, we must swim with caution.

LPing on Orca and Whirlpool

Looking to break out from EVM based chains for liquidity providing? One of the most interesting projects out there is Orca, operating on the Solana network; an AMM (just like Uniswap) that has been rocking the past few days.

As of now, Orca is the eighth-largest DEX by 24 hour trading volume

We all saw Solana's $SOL this month making strides and it is up > 140% compared to last month. Consequently the DEXs on Solana also are garnering more attention reaching $3.6 billionof volume (past 7 days) as folks continue to trade on the Solana chain itself. This is where Orca's Whirlpool protocol, supporting much of this growth, comes into play. Orca's accounts for 35% (~$1.5 billion) of the total DEXs volume for Solana.

Orca's protocol, Whirlpool, has 1,320 pools, with SOL-USDC being the most popular. SOL-USDC pair has $5.2m in TVL and 4600 LPs.

Whirlpool has reached record numbers of TVL locked this week which eclipsing even the 2021 bull run. The massive drop in Nov 2022 was due to the collapse of FTX .

Orca works similarly to Uniswap V3, and it also features concentrated liquidity. Moreover, people laude the platform for being easy to use. You deposit concentrated (or full-range) liquidity and receive an LP token.

Orca is a good alternative for folks looking to provide liquidity on chains other than the one's based on Ethereum. Solana has a vibrant ecosystem and as adoption grows, there is sufficient activity expected which means more swaps/trades -> more LP fees. While it does not have as much of a robust community as Uniswap, Orca and Solana are rising in popularity in a multi-chain Dapp world.

Orca has recently introduced its latest product, the "Liquidity Terminal," which offers liquidity providers (LPs) access to comprehensive historical price and yield data. This empowers LPs to make well-informed decisions by leveraging insights from past data. You can sign up for the beta access here

You can check out more about Solana DEXs here
AND
You can view statics about Whirlpool and all statistics about pools on it here

Hooks are nearly upon us

Each week, we explore new developments about the upcoming Uniswap V4 hooks. @saucepoint on twitter this week created a suite of tools to help developers simulate and test their hooks more intuitively, ensuring an excellent user experience right off the bat.

saucepoint

@saucepoint

Just in time for ETHGlobal: test and develop Uniswap v4 Hooks with a UI!

48

8:30 AM • Nov 16, 2023

@RuneKek suggested a new way to make UniswapV2 LPs more profitable this week without any added financial risk and started a discussion around the topic of renting out the rights to a pool. Hayden Adams suggested this could be a V4 hook, requiring LPs to lock up liquidity in exchange for auctioning it off to traders.

hayden.eth 🦄

@haydenzadams

Requires locking liquidity but passive LPs that auction off exclusive swapping rights is an interesting design space

Since it cuts out mev leak to ETH validators, top searchers could bid more than LPs earn today

Easy to build with v4 hooks

Rune

@RuneKek

Since basic univ2 style LPs earn no fees from end users and are only used for arbitrage, would it be possible to get more fees by letting market makers bid on exclusive access to the pool for a time period, instead of having MMs bid for individual arbs via priority fees?

106

6:00 PM • Nov 9, 2023

Furthermore someone has already created a V4 hook for this concept. The idea was very well received

Poolfish shoutout

This week we also got a shout out from Uniswap Foundation(again!). Head on over to poolfish.xyz to start playing with our calculators. You'll get a feel for how pool analytics looks like and start familiarizing yourself with different metrics.

Uniswap Foundation

@UniswapFND

Poolfish Features

Impermanent Loss Calculator: Know the risks tied to your liquidity position.

Yield Projections: Forecasts for your potential earnings.

Pool Analytics: Deep-dive into metrics to maximize your returns.

7

11:26 AM • Nov 16, 2023

Top Pools of the Week

High-Risk

OVR/ETH in the exotic pairs category for the ones feeling adventurous.

Low-Risk

FET/ETH & YFI/ETH for the balanced swimmers.

Safe

ETH/USDT in the 5bps category for the cautious paddlers.

This week in the crypto world has been a whirlwind of activity. With the rollercoaster of price movements due to trader activity and rising adoption of consumer apps, the landscape for liquidity providers (LPs) is more dynamic than ever. At Poolfish, we're committed to keeping you ahead of the curve with these fast-paced developments. Don't miss out — join us next week for the latest insights and updates in the LP arena!