Listen to the full Twitter Spaces event in all its glory here (the action starts at 11:15):
https://twitter.com/Poloniex/status/1507085403534213133?s=20&t=oDS6PCaFed7QQ8bpJyUAtg
Firstly, we want to thank the 300+ attendees who tuned in to the panel, and the many more Fantom Eco Carnival participants who got to not only learn about the incredible projects coming out of the Fantom ecosystem, but who also got to earn LQDR and SPIRIT along the way! If you have yet to take part, fear not! Our Fantom Ecosystem Carnival 20,000 USDT giveaway and our Liquid Driver 1,500 LQDR listing giveaway are both still going on, so be sure to sign up, start trading, and earn rewards!
https://twitter.com/Poloniex/status/1508815321150509069?s=20&t=7hkizACqCVkRRvZMJ6yGYg
https://twitter.com/Poloniex/status/1506964044128915465?s=20&t=7hkizACqCVkRRvZMJ6yGYg
And of course, a huge thank you to Fantom as well as Liquid Driver and SpiritSwap for your support during the Eco Carnival and the awesome work you are doing to drive DeFi forward.
If you didn’t already know😉 we’ve partnered with Fantom to give exposure and support to projects within their ecosystem. Check out that announcement below⤵️
A TL;DR recap
Host: Poloniex and John Morris, Head of US Operations at Fantom
Panelists:
SpiritSwap- Sid (CTO)
Liquid Driver- Dr. Liquid (Founder)
Poloniex- Michael (Marketing Manager)
Sid, CTO of SpiritSwap, a DeX/AMM that offers rewards to users for providing liquidity, joined us for our panel on the project’s behalf. Sid, in his introduction, told us that although SpiritSwap is a DeX/AMM, that they’re not stopping there. In fact, the project aims to become a DeFi hub with a DeX at its center, as well as boost collaboration between protocols on Fantom and further the cause for decentralization!
From Liquid Driver, we had the pleasure of hearing from Dr. Liquid, the founder of Liquid Driver. In introducing the project, Dr. Liquid described the project as a one-stop shop for protocols looking to bootstrap liquidity on Fantom. Not only that, but with Liquid Driver, users can also generate high yields with their crypto assets.
Throughout the panel, participants highlighted their own perspectives on the services they offer and their place in the grand scheme of the DeFi industry and its growth. Then, we got a bit more existential as panelists offered their take on topics such as DeFi’s journey to adoption as well as the differences and future between centralized exchanges (CeX’s) and decentralized exchanges (DeX’s).
At the end of the panel, we got to hear Sid and Dr. Liquid give us a peek into what they have planned for the future, and we have to say that their future (and our shared future) looks bright 🌟
Once again, we want to thank Liquid Driver and SpiritSwap for an enlightening panel discussion, as well as Fantom for hosting with us!
⬆️You can check out a recording of the panel via the link at the top⬆️
Q&A Script:
1. Please share with us the background of LiquidDriver (LQDR) & SpiritSwap (SPIRIT), and how it actually works? (question for SPIRIT and LQDR guests)
SPIRIT: So SpiritSwap is a DEX / AMM native to fantom. Users can deposit their liquidity with us inorder to provide a market to our users. In return for lending us your liquidity we offer rewards in our protocol asset (SPIRIT). Spirit can be used to farm for more SPIRIT by providing liquidity ot our Native LP (SPIRIT — FTM) or you can lock your Spirt up for a vested period ranging from 2 weeks to 4 years in return for our governance token “inSPIRIT”. inSPIRIT has multiple use cases.
It provides a boost to your farms depending on the amount of inSPIRIT you hold anywhere from 1.1X — 2.5X on your farming APR.
It can be used to vote on our governance snapshots for any community or protocol lead decisions.
It can be used to vote on our gauges (which are a form of onchain governance) AKA “boosted farms” in order to determine what share of incentives any particular farm will receive for that week’s distribution block.
Rather than just focusing on being a DEX, we strive to establish a flourishing DeFi hub, with our DEX at the center of this. There are many pieces to this puzzle so right now the focus is on honing our AMM infrastructure so we have a solid foundation to build our “hub” on top of. I would like to share more about our future plans, but for now we will keep our cards close to our chest as our upcoming V2 launch will extrapolate on our future plans.
Our key focus is to:
Hone our inSPIRIT model to ensure it offers longevity and continued utility
Improve capital efficiency for our users and protocol participants
Establish a strong sense of decentralization via total onchain governance (still in the works)
Work with other protocols on FTM to build product layers on top of one and other that complements each protocol’s product offering, this establishes a strong sense of collaboration, working with one and other to improve the ecosystem at large.
LiquidDriver: LiquidDriver is a one stop shop for protocols looking to bootstrap liquidity on Fantom and it’s also a one stop shop for users looking to generate high yields with their crypto assets. We are incentivising liquidity for the 3 top DEXs on Fantom and a money market called Hundred and work closely with our partners to bring liquidity where it’s needed.
There are 3 building blocks that works in tandem to make LiquidDriver stand apart :
Our farms which are acting as passthrough to other pools, meaning when you stake in one of our farm your funds will be staked elsewhere to generate yields. By depositing in our pool you earn LQDR.
Our wrapped tokens model for veTOKENS, which are based on the veCRV model such as inSPIRIT. On Fantom, thanks to the laying work of curve, a lot of protocols are implementing the veTOKEN model, which is a locked version of a token that gives you more utility, cash flow and governance power within the protocol. Our first case was actually with spiritswap and their inSPIRIT, which is the vested version of their token spirit, Sid will tell you more about it . We offer linspirit, which is a wrapped version of spirit that is transferable and tradable while still giving holders the weekly fees from inSPIRIT. You can use our liquidswapper to deposit spirit and we mint an equivalent amount of linspirit that goes to the user. In the background, we lock the spirit in perpetuity, giving us voting power for their gauges and it allows us to boost the yields we generate through our pools.
The last piece of the product is xLQDR, which is also based on the veTOKEN model. Users can lock their LQDR from 2 weeks to 2 years and receive xLQDR. 95% of the yields collected from our pools are then redistributed to xLQDR holders, which means they are currently earning spirit, boo, beets and spell on top of LQDR and FTM; offering high yields and diversification.
2. What is your perspective on the prospect of decentralized exchange (DEX) services? How about the SpiritSwap role in this industry’s future growth? (question for SPIRIT guest)
SPIRIT: AMM’s are one of the pillars of DeFi infrastructure. There are lots of valuable protocols also responsible for establishing a healthy environment for Decentralized finance (lending protocols and isolated money markets being some examples) however DeFi relies on the flow of liquidity and allowing protocols and users to stay solvent. Ensuring that a layer 1 such as fantom has a healthy DeFi environment revolves around the ability for assets to remain liquid, and this is the primary role for a DEX like SpiritSwap.
In terms of outlook, one of the main factors that needs to be addressed is how to sustainably incentivise liquidity. Offering emissions of a governance token is all well and good, but this has a limited runway. I cant speak on behalf of the other AMM’s on Fantom, but as part of our V2.5 upgrades, we will be assessing options to taper mercenary capital in order to establish deeper liquidity in a manner that offers longevity and sustainability.
As mentioned earlier, we are focused on building a DeFi hub that taps into DeFi 2.0 and builds product layers on top of other strong DeFi protocols product offerings. SpiritSwaps role in this industries future growth aims to pioneer solutions to capital efficiency, sustainability and above all safety for defi users as we navigate through the evolution of decentralized finance.
2.1 What is your perspective on the prospect of liquidity mining services? How about the LiquidDriver role in this industry’s future growth? (question for LQDR guest)
When we talk about liquidity mining, we shouldn’t think of a static model that can simply print forever to incentivise. Liquidity mining is an efficient way to bootstrap liquidity and build a community around your protocol. There is no minimum capital to put in, you can get in and out easily. The big issue with all those liquidity mining dapps is that it was not conceived as an evolving product, but rather a house of cards where you can expect everything to fall apart sooner rather than later. The main reason is that they do not manage to decouple revenue generation from the token emissions and second they do not have a clear vision on how to make their system sustainable without emissions. DEFI is full of mercenary capital and if you don’t provide value to your token holders your liquidity won’t stick. Liquidity mining should be considered as tool rather than a product in itself and you should use it to capture value for your holders, bootstrap thick liquidity and incentivise specific behaviors from your user base to optimize revenue based on your model. On the other hand, liquidity mining is a powerful tool when it comes to sync up capital deployment from all around the world and that’s the main takeaway builders should take from it and that’s how they should use it
3. There are tons of new and old DEX related projects (or token) “fighting” for their market share in the current industry. How can SpiritSwap outrun such a competition? (question for SPIRIT guest)
We have always had healthy competition from the get go. We were second to market about a week after Spooky, and followed quickly with the introduction of Beethoven. Other DEX projects have since emerged, however in desperation to grab market share, I feel their tokennomic models went too hard, too early (the metaphorical Brrrrrr) and as a result have not succeeded.
Having competition among 3 main AMM protocols is a good thing in our opinion. It establishes a strong drive for development, creativity & ingenuity which is good for DeFi as a whole. While we share a rivalry with our competitors we also have an abundance of respect for them and never underestimate. I wouldn’t say its not exactly a case of out running your competition but rather ensuring there is a good amount of balance to market share, in my opinion there is plenty of room at the table for everyone to eat.
In order to remain relevant and drive desire for users to adopt and continue to participate in our protocol its about (2) main factors, these include:
Assessing the markets needs and wants, keeping your finger on the metaphorical pulse of what’s driving defi and continuing to offer products and features that meets these desires
Discovering problems within the space that need addressing and creating solutions to these problems and building these solutions into your product model.
Our V2 and subsequent V2.5 addons intend to offer updates that encapsulate the aforementioned, thus enabling us to retain a sizable share of the market thus growing TVL and liquidity, not only for us, but for the ecosystem as a whole.
3.1 There are tons of new and old liquidity mining related projects (or token) “fighting” for their market share in the current industry. How can LiquidDriver outrun such competition? (question for LQDR guest)
By simply not being a liquidity mining dapp. As I said before, we shouldn’t see our dapp as a final product but as an ever evolving one.
Currently, we’re about to deploy our latest strategies that do not require token emission and will open new revenue streams for our holders.
We’re currently the biggest holders of inSPIRIT and veHND and are about to acquire a third veTOKEN . It essentially means that any protocol porting on Fantom looking to bootstrap liquidity, unlock capital by using their token as collateral or bring further utility to their tokens will knock on our door. We aim to open the biggest secondary market for emissions control through bribes. Our goal is to be a playmaker in the ecosystem by acquiring blue chip tokens with our wrapper model, which generates a third revenue stream for our holders.
So far, demand for xLQDR, has mainly been driven by retail because of the high yields offered. I expect the next wave of demand to be protocol driven as everyone is looking for ways to control emissions of DEXs and money markets, acquiring xLQDR gives you high yields and governance power over those protocols.
4. Compared with “traditional” centralized exchange, what are the requirements for DEX (or similar decentralized platforms) to provide an equal and comprehensive user experience? Can both DEX and centralized trading systems coexist, learn from each other and grow together in the blockchain industry? (question for SPIRIT & Poloniex guests)
SPIRIT — Compared with traditional centralized exchanges, a decentralized exchange offers users retention of ownership given the non custodial element a DEX orientates around. For some users this level of freedom is desirable thus catering to that market. For other users, they find safety and convenience in not having to worry about the custody of their assets thus
The Market Making process across a CEX allows market makers to pick their own price ranges and take in external data to establish a greater level of profitability. Where as compared with a DEX all market makers are created equal with lack of competition due to DEX’s following XY=K curve,
Positives: Anyone can easily be a liquidity provider and everyone earns the same fees/rewards
Negatives: Impermanent loss and more slippage
Univ3 has somewhat bridged this gap but has neglected one of the positives where anyone can provide liquidity. Now more sophisticated liquidity provides make away with most of the fees while average liquidity providers are left behind.
At SpiritSwap we are exploring ways to bridge this gap with a hybrid AMM + Orderbook model where anyone can LP on the AMM to earn Fees and rewards and more sophisticated LPs can place limit orders where they need to. This is a tough task due to blockchain and gas limitations.
Poloniex: Usually with centralized exchanges like Poloniex, because we are a private company, we can incentivise users with cheaper trading fees, rebates and trading competitions. And also, when you are trying to onramp from the traditional finance space, centralized exchanges have facilities for you to start trading with fiat whereas the majority of DeXs lack that option.
CeXs generally use order books whereas DeXs generally use liquidity pools. In order for DEXs to offer an equal user experience, for starters, they have to address the liquidity problem that many of them face. However, it seems to me that the future of CeXs and DeXs lies in working together. At the end of the day, it’s all about the users and making sure that, in short, “crypto happens”.
5. What has SpiritSwap and LiquidDriver accomplished to date and what are the current use cases of your token? (question for SPIRIT and LQDR guests)
Well first we managed to attract more than 200M in TVL in less than 3 months.
We deployed our revenue sharing model through xLQDR, incentivising locking while offering high yield and exposure to blue chips token in the ecosystem.
We managed to become the biggest holder of inSPIRIT and veHND, our model has been thoroughly tested and we got a pretty good grasp of how to maintain a peg with our current model. We already started receiving bribes by well known projects such as FRAX and DEUS.
We improved our xLQDR offering by partnering with revest to offer xLQDR position within a NFT, allowing users to move their position and potentially use it in the future as collateral.
We just launched our boosted Hundred pool model, which leverage our veHND holdings to offer high yields on stable coins for users depositing on LiquidDriver .
The first wrapped version of xLQDR is about to be released by growth DEFI, which adds another use case for LQDR holders looking to get exposure to xLQDR while remaining liquid.
We deployed a brand new analytics dashboard allowing our holders to have a full overview of the performance of the protocol and overall I think we managed to position ourselves as an important part of the Fantom ecosystem, building alongside amazing protocols.
SPIRIT: To be continued . . .
6. How about the progress of the current roadmap and what’s your team’s (SpiritSwap and LiquidDriver) strategies on the implementation of the future roadmap? (question for SPIRIT and LQDR guests)
We still have a lot of upcoming features on our short term roadmap. The biggest one is what we called shadow farm. It is essentially a compounding strategy that leverages the yield bearing version of our partners tokens instead of dumping the token back to your initial LP position. Everything we build we try to synergize as much as possible with our partners by leveraging their product.
We’re also working on a leveraged farming solution with one of our partners that would route the leverage through stable coins to avoid liquidation on the upside to impermanent loss.
Overall, we love to keep our roadmap agile and focus on our main objectives: Reducing emissions while increasing revenue. We’re also in constant contact with our partners to see what they are building and how we can leverage those features to offer new yield opportunities for our userbase.
7. What is the Poloniex strategic planning towards Fantom (FTM) ecological cooperation? How about your personal thoughts about Fantom? (question for Poloniex guest)
Since listing Fantom in February, Poloniex has been closely in touch with the Fantom Foundation. We love the team but more importantly we love the community that spearheads Fantom’s ecosystem. We recognised from early on that there was something special about the Fantom community and that projects on this ecosystem are deeply supported by their users rather than big VC investors. The exposure Fantom ecosystem tokens have in the centralized exchange space isn’t as great as the ecosystem deserves, so after discussing with Fantom, we wanted to become an integral part in getting more exposure to Fantom tokens from the overall market. Hence this partnership being formed. Moving forward, you can expect to see more Fantom tokens being introduced on Poloniex and we are very excited to be supporting this thriving ecosystem.
In many regards, I do feel that the Fantom and Poloniex userbases are very similar. Both are community driven and loyal and I think that many synergies will arise from our partnership. As for my thoughts on Fantom, I am extremely excited for the project. The DAG system is very innovative, the blockchain is very fast and in a world full of layer 1s, Fantom has great projects being built on it, and when everything is said and done, I think it will be one of the chains that continues to thrive in 10 years time.
8. Decentralized finance (DeFi) is a buzzword that promises significant changes to banking and finance.
Some DeFi functions already exist but maturity is still far behind compared to current financial systems. Please share with us about your thoughts on the DeFi future in the upcoming years. (question for Poloniex, SPIRIT & LQDR guests)
Poloniex: Right now, we’re still well on the left side of the adoption curve, but projects like Fantom are doing one of the most important things that will drive popularity and mass-usage forward, which is providing the means for a strong and well-integrated ecosystem. Right now, there are many, very vocal fans of DeFi and a whole host of developers and ecosystem participants that are taking the helm and driving things forward. But, and I think this is an important thing to take note of when we think about a strong ecosystem, everyday users who just want access to banking services without an actual bank may not have time or want to think about how the different parts of the ecosystem work together or how to use them individually. Because Fantom is focused on creating an ecosystem with smooth interoperability, the whole system is primed to not only serve developers well, but the eventual mass retail users that just want ease-of-use and access to financial services. This is where I think DeFi is heading and where its maturity needs to trend towards in order to rise to the adoption level of current financial systems.
Indeed I feel like crypto is still in its nascent phase. Due to its open source nature, the speed at which the industry innovates is mind blowing but it also increases the amount of failed experiments, and it’s part of the process. Overall I think we’re going to see way more apps focusing on bridging between tradfi and defi, we’ll see a lot of consolidation as the industry matures, big protocols will absorb niche protocols as we are all fighting for the same market shares. If we want to bring financial opportunities to everyone then we must rethink our user experience, so far DEFI is very complex and this issue needs to be tackled by focusing on UX and security.
🎤 was originally published in The Poloniex blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
