A Glance at the Arbitrum DeFi Ecosystem: 9 Potential DeFi Protocols
Original Author: Morty
According to DeFiLlama data, Arbitrum's total locked value (TVL) ranks first among Layer 2, at $1 billion. Of course, such excellent data is due to the ace protocol GMX on Arbitrum.
Currently, GMX has a Total Value Locked (TVL) of $415 million. According to Nansen's Gas Tracker data, GMX firmly occupies the first place in Gas consumption. Therefore, an interesting phenomenon has also appeared in Arbitrum-DeFi innovations have exploded, and most of the DeFi innovations focus on GMX.
Next, this article will select and decompose 9 potential DeFi protocols deployed on Arbitrum.
TVL 10M or more
Dopex
Dopex is a decentralized European option protocol. In its product design, it is expected to maximize liquidity, minimize the loss of option sellers, and maximize the benefits of option buyers. It passively provides liquidity income through liquidity contribution participants.
In order to achieve this goal, Dopex has developed two products, Single Staking Option Vaults (SSOV) and Straddles.
Based on SSOV, users have three options, buy call/put options, or provide liquidity for option vaults, and charge those who buy options.
The function of Straddles allows users to profit from fluctuations, that is to say, users can profit from rising and falling, or users can provide liquidity for Straddles and charge fees.
In the Dopex product ecosystem, there are two kinds of Tokens, namely DPX and rDPX.
DPX is a limited-supply governance token that accumulates fees and income through liquidity pools, treasuries, and escrow accounts. In addition, Dopex adopts the veToken governance model.
rDPX is a rebate token that compensates option sellers for losses. It can be used to mint synthetic assets such as index funds and stocks etc.
At present, the total locked value (TVL) of Dopex is 22 million US dollars, and the Token market value is 56 million US dollars. It is currently officially announced that it will be deployed on Polygon.
Camelot
Camelot is a decentralized exchange focused on long-tail asset trading built on Arbitrum.
To achieve sufficient liquidity for long-tail assets, Camelot launched a product called Nitro Pools. Nitro Pools allows other cooperative agreements to selectively distribute rewards to LPs by setting some parameters through spNFTs, such as minimum LP amount, time lock or whitelist, etc. In other words, qualified LPs can get higher rewards.
Another feature of Camelot is the utilization of dynamic and directional swap fees on a per-pair basis. For example, set a buying fee of 0.01% and an exit fee of 2%. This will help stabilize volatility under extreme events. Dynamic fees allow implementing a system based on fluctuations of individual currency pairs. Camelot's product design is friendly to other partnership agreements.
In addition, it should be noted that the conversion mechanism of Camelot's native tokens Grail and xGrail is also quite special. xGrail is an interest-bearing asset, which can obtain protocol dividends and accelerate mining speed, but it cannot be traded or transferred. If xGrail holders want to exit, they need to wait for an exit period of at least 15 days (2 xGrail: 1 Grail exchange) and a maximum of 6 months (1 xGrail: 1 Grail exchange).
Currently, Camelot has a Total Value Locked (TVL) of $17 million.
Link:https://app.camelot.exchange/
Rage Trade
Rage Trade expects to build the most liquid ETH Perp and the highest-yielding stablecoin farm on Arbitrum.
ETH perp is driven by Uniswap v3, and provides users with 10 times leveraged perpetual contract services by injecting Omnichain circulating liquidity into 80-20 treasury. The 80-20 vault is the source of liquidity for Rage services. Users can provide liquidity for the vault by depositing TriCrypto LP Token, ETH, and USDC, and 80% of the funds will be captured in protocols such as Curve, GMX, and Sushi Fees, 20% of funds provide liquidity to Rage Trade.
The Delta Neutral Vault stablecoin farm will provide liquidity to GMX with a neutral strategy, so as to obtain ETH rewards provided by GMX. At the same time, Vault will also implement hedging strategies on Aave + Uniswap, providing users with risk-free stable currency income pools and low-risk stable currency income pools.
Currently, the total locked value (TVL) of Rage Trade is $13.5 million, and the protocol has not released Token yet.
PlutusDAO
PlutusDAO is a governance aggregator on Arbitrum, similar to Convex to Curve, expecting to capture value by participating in the ve governance of other protocols. Today, PlutusDAO has reached cooperation with GMX, Dopex, Jones, and Sperax.
In product design, PlutusDAO constructs two kinds of assets, namely plsAssets and plvAssets.
plsAssets is related to governance aggregation, maximizing liquidity, and user rewards. Users deposit assets (Jones, DPX, SPA) into PlutusDAO, and PlutusDAO permanently locks these assets into veToken and returns them to users in the form of plsToken.
plvAssets is a treasury product established for the convenience of users and to maximize rewards. It also provides composability for other protocols. Users can deposit GLP into the treasury and convert it into plvGLP. award.
Currently, the total locked value (TVL) of PlutusDAO is $11 million, and the token market cap is $2.9 million.
TVL below 10M
Jones DAO
Jones DAO is a yield, strategy, and liquidity protocol that features one-click access to institutional-grade DeFi strategies.
Jones DAO is mainly aimed at the following three types of users:
1. Users who do not want to actively manage their strategies or want to adopt the strategies of professional DAO strategists;
2. Users who want to maintain deposit liquidity without locking assets;
3. DeFi protocols that want to earn extra income without treasury management experts;
After depositing assets, Jones DAO will provide users with a jAssets, and users can also use jAssets to earn additional income in other protocols.
Currently, the total locked value (TVL) of Jones DAO is US$3.74 million, and the market value of Token is US$7.36 million.
Link:https://app.jonesdao.io/vaults
UMAMI
Umami is "Yearn on Arbitrum", after the failure of V 1, Umami released the V2 product. In the V 1 version, Umami used GMX as the bottom layer to capture about 20% of the user's USDC by participating in the stable currency part of GLP, but the final result was that it failed in the huge fluctuations of ETH. However, the agreement compensates all losses of users.
Today, users can obtain 50% of the protocol revenue by staking Umami Token, paid in the form of WETH, with an annualized interest rate of about 2.7%. (Currently these benefits are generated by the funds owned by the agreement treasury)
On December 9, Umami released the GLP Vaults V2 backtest data, the data shows that Vault:
Annualized return for the final strategy: 26.67%
Annualized return for benchmark strategy: 11.8%
Worst case loss: -4.55% (including trader PnL)
Average Maximum Delta Risk: -1.29% (SD 2.10%)
At present, Umami has not officially launched new products of the agreement. However, Umami confirmed that it will launch the DeFi Yield Vaults product in Q4 this year, providing users with USDC, BTC and ETH income services.
Notably, USDC issuer Circle is also a partner of Umami. Currently, Umami Token has a market cap of $23 million.
GMD Protocol
GMD Protocol is a yield optimization and aggregation platform built on Arbitrum. Its products are designed based on GMX and GLP, allowing users to deposit WBTC, WETH, and USDC into a single-currency Staking vault, and use these assets to purchase GLP at the same time. Distribute GLP earnings based on professional strategies to stakers.
Its advantage is that it eliminates the impermanent loss that users need to face when purchasing GLP directly, and after staking to the Staking pool, users will receive gmdToken certificates and participate in other DeFi operations.
GMD is the native token of GMD Protocol. GMD stakers will also benefit from the losses of GMX traders while bearing the risk of GLP impermanence losses. At the same time, GMD pledgers will also receive a portion of the profits of the depositors distributed by the single-currency Staking vault.
In addition, there is another Token in the GMD Protocol ecosystem, named esGMD. esGMD will be used for the Token exchanged by OTC when GMD Protocol cooperates with other protocols, and the Token exchanged with esGMD will be given back to GMD pledgers. esGMD stakers will also receive a higher proportion of protocol income dividends.
In addition, in the future planning of the agreement, esGMD may be distributed as a reward to depositors of single-currency Staking insurance, or used to participate in bribery governance. If you want to convert esGMD to GMD, you need to wait for one year.
At present, the total locked value (TVL) of GMD Protocol is 3.01 million US dollars, and the Token market value is 3.41 million US dollars.
Sperax USD
SperaxUSD is a 100% fully collateralized stablecoin protocol, and the stablecoin generated by the mortgage is called USDs. USDs can be generated by collateralizing USDC, FRAX, and DAI, and its competitiveness with these stablecoins lies in higher yields. The mortgaged USDC, FRAX, and DAI will be sent to other DeFi protocols to obtain income. USDs holders will automatically receive these benefits.
In addition to these benefits, USDs holders can also go to Demeter for USDs-Token liquidity mining to obtain higher returns. When redeeming, USDs holders need to pay a 0.02% handling fee, and SperaxUSD native Token SPA pledgers will receive this fee. In extreme cases, SPA will also be used as a reserve for USDs.
SperaxUSD adopts the ve governance model, and the agreement will regularly repurchase SPA from the market with 25% of the proceeds.
Currently, the total locked value (TVL) of SperaxUSD is $2.62 million, and the Token market cap is $8.77 million.
Link:https://sperax.io/
Buffer Finance
Buffer Finance is a decentralized binary options trading platform. Buffer is characterized by simple operation. We only need to choose the execution price, expiration time and "up" or "down" to participate in the transaction, and the direction is correct. However, the liquidity of the Buffer platform is insufficient, and Buffer has no room for whales to operate.
In the Buffer product ecology, there are two kinds of Tokens, namely BFR and BLP.
BFR is a utility and governance token that accrues up to 30% of fees generated by the platform.
BLPs are tokens issued to liquidity providers that accrue up to 70% of fees generated by the platform.
Currently, the total locked value (TVL) of Buffer is $110,000, and the market value of Token is $1.72 million.
Although Buffer's data is average, judging from its roadmap, the team is working hard to promote the development of the protocol, so we continue to pay attention.
other agreements
SwapFish is a PancakeSwap imitation disk, so it is not analyzed here.
Vesta Finance has also entered my line of sight. It is an over-collateralized stablecoin protocol, but because its asset backing is all volatile assets, such as gOHM, GLP, etc., it is ignored.
Mycelium (formerly TraceDAO) is also a decentralized perpetual contract trading platform. Although its total locked value is also more than 10 million US dollars, it seems to be affected by the collapse of FTX and announced the news of layoffs on December 15th , so it will not be analyzed in detail in the article.
at last
The emergence of Layer 2 has promoted the development of more DeFi innovations, which is due to the advantages brought by the Gas fee and speed of the second layer, and the security of Layer 2 is guaranteed by Layer 1 Ethereum. This is also the main reason for the explosion of Arbitrum DeFi innovation. Another main reason is the deployment of the strong protocol GMX. GMX meets the needs of most of the traders on the chain, and has also spawned derivative products built around GLP-these products are like The "snakes" parasitized on the whale GMX, and at the same time "swallows" also promoted the growth of GLP liquidity in disguise.
However, hidden worries also exist. The TVL of GMX accounts for nearly 40% of the TVL of the entire Arbitrum ecosystem. In the future, if GMX is deployed in more chains, or even learns from Dydx to launch its own application chain, it will weaken the overall potential of Arbitrum. Arbitrum needs to have New GMXs keep popping up.
