Total Volume + Fees
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
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:
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.
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.
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
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.
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
Bonk/ETH in the exotic pairs category for the ones feeling adventurous.
MUBI/ETH for the balanced swimmers.
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!
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