🟪 Poly Pulse #12: Liquid Staking becomes live on Polygon
Also, Polygon will be the official blockchain platform for the city of Lugano.
Howdy family!
Welcome to Poly Pulse - your guide to staying up-to-date on the latest trends in the Polygon DeFi ecosystem.
This newsletter breaks down top stories, developments, updates, and trends from the first week of March 2022, along with a farming opportunity.
Whether you are a newbie who has just entered the DeFi ecosystem or a knowledge seeker who wants to keep yourself updated, PolyPulse newsletter is the best place to stay ahead of everyone in the community.
This week saw week over week declines across user metrics, including active addresses and transactions. The major reason could have been an overall negative sentiment in the market reducing the number of active participation on-chain. The decline of users on QuickSwap (-15%) was the most significant contributor to the network decline.
Ecosystem bright spots include QiDao (+20%), Crazy Defense Heroes (+50%), and Zed Run (+51%), which all had a massive week-over-week daily -active-users (DAU) growth. QiDAO’s explosive strategy to earn over 550% was the main reason for the farmer attraction on the platform. Heroes and Zed Run’s popularity attracted more users to the platform.
A significant update comes this week from Shard Labs. Shard Labs announced the creation of a Polygon solution that allows users to enter Lido’s liquid staking without spending substantial amounts of capital for transactions on Ethereum mainnet and accrue huge rewards. An integration with Balancer Protocol worked out to make this happen. The liquid staking is an important milestone since it will unlock enormous rewards for people staking on Polygon. As Liquidity Mining goes live on 11th April 2022, people will earn via triple token rewards ($BAL, $LDO, and $MATIC).
Another significant update comes from The City of Lugano, Switzerland. All government departments & local businesses will accept $BTC, $WBTC, $USDT for Taxes, Payments, Tickets, Salaries, and more. #Polygon will be the official blockchain platform. This is massive news for the ecosystem regarding network adoption, user growth, and legit acceptance.
Thank you to our sponsor Tally, the first DeFi wallet owned by its users.
Try Tally Swaps before the DAO launches!
Gitcoin Grant round 13 will be live from 9 March 2022, and Polygon is back with their 2nd Ecosystem Round and another $100k matching pool. Following points need to be considered to be eligible for the round:
The Grant must support or directly advance the Polygon community and/or protocol.
The Grant owner must be directly affiliated with the project; the funds must go to the project and be used for the purposes stated in Grant’s details.
The Grant should be focused on accomplishing the following elements for Polygon:
Usability - improving the user experience
Community - growing the ecosystem.
Tooling - improving the developer experience
Governance - building tools and enhancements for governance
Dapps - applications integrating with and supporting Polygon
It is important to note that the project applying for the grant should not have its token or have raised VC funding.
Proposals submitted after Wednesday, 16 March, 2022 will not be accepted or qualify for GR13 matching.
All the teams building on or supporting Polygon are encouraged to apply!
This week the Polygon Ecosystem DAO did not approve any grants. The primary reason for the pause was to re-evaluate the grant process and launch a better mechanism to provide how it could serve the projects looking for grants. The Ecosystem DAO will be launching a more robust and structured grant process with additional benefits very soon.
Delta Neutral Play for wBTC-wETH Uniswap v3 LP
We all know that variable LP positions like wBTC-wETH guarantee impermanent oss because the price of both assets would not always move in the same direction as expected. Regardless of how well you can manage your liquidity position on Univ3, the impermanent loss will always catch up with you eventually due to the volatile nature of the crypto market.
Here is a way to Delta hedge your wBTC-wETH LP position through the following steps:
Start with any even number of $DAI like 100, 200…etc. In the example above the user starts out with 800 DAI.
75% of the DAI i.e. ($600) is used for the wBTC-wETH LP on Uniswap v3 and in order to do this, 600 DAI is sold for wBTC using 1inch to get the best swap rate.
Since most people neither have time nor the expertise to actively manage a liquidity position on Uniswap v3, a good alternative is to provide liquidity with the help of active managers. In the diagram above, we have created a wETH-wBTC (0.05%) LP position via Universe Finance who are active Uniswap v3 managers.
In order to supply liquidity on Universe Finance go to products on the landing page and select “Smart Vaults V2”.
Scroll down to find the wBTC-wETH (0.05%) vault. The annual return at the moment is (16.32%) in UNT governance tokens and (10.04%) in trading fees.
In order to make the user experience easier, Universe Finance allows users to provide liquidity in just one of the two assets in the LP instead of both. In this case, the user would only have to approve and deposit their wBTC.
Now the user has successfully created a wBTC-wETH Uniswap v3 LP which is actively managed by Universe Finance.
The next step involves hedging against impermanent loss. The user goes to Float Capital which allows users to gain long or short exposure to a wide variety of assets using their leveraged ERC20 tokens. In order to make it user friendly, there is
No liquidations;
No over-collateralization;
No front-running; and
No trading fees.
The LP is essentially a Dollar Cost Average (DCA) position for wETH and wbTC i.e. when the price of wETH decreased vs wBTC the LP position technically buys more wETH and sells more wBTC and vice versa. The best way to hedge this position would be to mint both long and short positions of “The Flipp3ning (3x leverage)” ERC20 token.
How can one mint “The Flipp3ning” position?
The Flippening represents a 3x leveraged version of the Flippening, ratio of the ETH to BTC market cap. Enter a long position to gain exposure to ETH increasing in value in relation to BTC or a short position to gain exposure to BTC increasing in value in relation to ETH.
Since nobody can predict the market, it is best to mint both positions to hedge your initial Uniswap v3 position to prevent impermanent loss.
Mint both long and short “The Flipp3ning (3x leverage)” positions and stake to earn.
Once the minting is done, stake both positions to earn ~120% in $aFLT (alpha float) tokens.
Once all the steps are completed, you will eliminate impermanent loss and earn > 100% on your wBTC-wETH position.
Tread cautiously whenever you’re using multiple DeFi protocols, bridges, and L2s. Only ever deposit money you can afford to lose.
Farm for an approximate APR of over 300% on $WMATIC and $USDC.
Have Fiat and want to lend or collateralise it ? Polygon has something for that as well. Jarvis Forex Market is live on Market XYZ.
Looking to swap $BNB to $MATIC ? Here is a guide for you:
How to Swap BNB to MATIC Checkout our latest blog post and learn in a few steps how to swap BNB to Polygon (MATIC) and AIRT on BSC to Polygon using bridge and DEXes. #bnb #matic #polygon #airnfts #NFTs #NFT #NFTmarketplace #BSC
This newsletter is to help you update yourself in the context of farming opportunities, developer opportunities, and how the ecosystem is evolving. Stay tuned, subscribe, and we will have many updates coming your way!
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