Total Volume + Fees
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.
While stupid shit like memecoin trading or inscriptions actually poses interesting & important challenges, and helps to move the technology forward.
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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
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?!?!
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That's it for this week LPs. Have a great Christmas, we'll see you next week!