AMA: DeversiFi Shares Insight into Upcoming Liquidity Mining Program
DeversiFi is a layer 2 hub that makes accessing DeFi opportunities on Ethereum easier by allowing users to invest, trade, and send tokens without paying gas fees.
The team is gearing up for a liquidity mining program.
Read the full transcript below to learn more about DeversiFi's liquidity mining program and their governance token $DVF.
Adam | DeFi Alliance: What's up Ross | DeversiFi? Super excited to have you here today. If you can do a quick intro on yourself as well as DeversiFi that'd be great!
Ross | DeversiFi: Hi Adam! I am one of the DeversiFi co-founders. DeversiFi was a 2020 DeFi Alliance cohort member (feels like a decade ago!) I am looking forward to meeting you all and giving you a quick update on DeversiFi’s upcoming liquidity mining program. Thanks for hosting this AMA.
Adam | DeFi Alliance: Glad to have you here. So for those who don't know -- what is DeversiFi? What do y'all do? What's live so far? Oh and like how'd you guys come up with this idea?
Ross | DeversiFi: Do we have ten hours haha?
Adam | DeFi Alliance: LOL. You got this. I believe in you.
Ross | DeversiFi: In a nutshell - DeversiFi makes DeFi easy. We are a layer 2 hub that aims to make accessing the best opportunities that Ethereum DeFi has to offer, simple and easy. Customers can swap, trade, invest, lend and send, all from one layer 2 control centre, without paying gas and in complete privacy.
We were using DEXs on-chain back in 2017 and thought that there just had to be a better way. We built a bunch of scaling solutions in-house during 2018-19 and then met the fantastic chaps at Starkware.
Initially DeversiFi was focused on targeting serious traders. We built a high performance layer 2 DEX (using the StarkWare Validium technology for settlement) that aggregates liquidity from CEXs and DeFi.
We are now using the same solid technology base to build-out our layer 2 hub, which will be mobile-first, simpler and less intimidating. Giving everyone access to the best of DeFi yield earning opportunities from layer 1 and layer 2.
Jacob | DeFi Alliance: Can you speak more about "mobile-first" on an L2? What does that experience look like or mean in practice? What does L2 "hub" mean?
Ross | DeversiFi: If you go to app.deversifi.com using your Metamask mobile wallet you can test out our first stab at what the eventual app might look like. Allowing customers to do everything that they would do on desktop, but in a much more cleaner and friendlier way. If they need the more advanced functionality then they can always go to desktop, but we already have users who are connecting to us only via mobile and are loving it.
Layer 2 Hub - imagine being able to access the best of L1 DeFi on L2 - lending into compound & aave as well as more advanced yield strategies, all without paying gas. Features like DeFi Pooling and bridges will really help here. At the same time you can send your funds to multiple layer 2s and CEXs, swap, send and invest, all without paying gas
Adam | DeFi Alliance: Got it so with all of this being on L2s -- what're your thoughts on how L2s continue to grow and evolve?
Ross | DeversiFi: Great question! Initially we assumed that there would be a ‘one winner takes all’ approach to Ethereum scaling, but what we have actually seen over the past 12 months is the emergence of lots of different layer 2 (and layer 1) solutions that each offer their own benefits and drawbacks.We think that the layer 2 space is going to continue to be fragmented, with lots of high speed bridges acting as the links between ecosystems & products. DeversiFi recently launched our first bridge, allowing instant transfers between the Polygon Network and DeversiFi, and will be launching more bridges over the coming months.
We are also very excited about StarkWare’s StarkNet protocol, which will enable more composability and remove friction between products that exist on StarkNet, as well as making it easier for new projects to build on the StarkWare L2 without having to specialize their existing business logic. All whilst keeping transactions costs super-low without sacrificing security.
Adam | DeFi Alliance: I do agree with claim that the L2 space will continue to be fragmented moving forward so it's awesome to hear you guys are working on more bridges in addition to the polygon bridge.
Ross | DeversiFi: Yup! It is great to see a whole range of products and solutions launching, ranging from specialist zkRollups, to generalised solutions and layer 1s
Adam | DeFi Alliance: So this liquidity mining program you guys have coming up means you guys have a token obviously. Can you touch on the token ($DVF) and what its utility is?
Ross | DeversiFi: Absolutely. DVF is the governance token of the DeversiFi protocol. DVF holders can vote (without paying gas) on protocol changes such as fees charged on the platform, DeversiFi liquidity mining allocations (gauges) and how to spend DVF DAO treasury funds.
Side note - The treasury holds 50% of DVF tokens currently as well as controlling the entire c. $4m raised from the initial DVF launch. DVF was launched via a DeversiFi Launch Market (DLM), which is a fair launch mechanism for launching tokens on layer 2.
It is likely that DVF holders will vote at some point in the future to enable a portion of trading fees on DeversiFi to accrue to DVF stakers (xDVF holders) as well as other utility.
Adam | DeFi Alliance: Great! And outta curiosity -- is the treasury all DVF tokens?
Ross | DeversiFi: DVF and about $4m of stablecoins at the moment. The DAO also voted to stake a portion of DVF on Onsen, so is also earning SUSHI rewards.
Adam | DeFi Alliance: And has there been any governance around treasury assets thus far? Wrt spending etc.?
Ross | DeversiFi: a portion of DVF has been allocated for liquidity mining and retroactive usage airdrops. Hopefully the community starts actively managing the assets and earning more yield.
Adam | DeFi Alliance: Mhmm makes sense. Let's transition to the liquidity mining program you guys got coming up. Maybe touch on what the purpose of the liquidity mining program is and how its gonna work?
Ross | DeversiFi: The goal of the DeversiFi liquidity mining program is to build a long-term & aligned community around DeversiFi by distributing DVF to users who provide liquidity into the layer-2 AMM pools. This hopefully will lead to good liquidity on new markets and therefore also improve the experience of trading for all users. DeversiFi already aggregates liquidity for major pairs, but the AMMs + Liquidity mining are to bootstrap liquidity on a whole new set of tokens.
In order to take part in the liquidity mining program, liquidity providers simply need to deposit tokens in a ratio of 50/50 to the DeversiFi layer 2 AMMs for any of the initial 18 eligible pools. The DeversiFi AMMs are the familiar x * y = k AMMs (similar to Uniswap V2) but on layer 2, meaning LPs do not have to pay gas to deposit and remove liquidity. LPs will then earn trading fees and DVF rewards. Nothing too complicated.
Adam | DeFi Alliance: Yeah not bad. Users get DVF tokens for providing the liquidity.
Ross | DeversiFi: Exactly the case.
Adam | DeFi Alliance: Are there any specific metrics you guys are targeting? TVL?
Ross | DeversiFi: On average we are aiming for a minimum of $5m in liquidity per pair, which should give a 30-50% APR. Larger pairs are likely to have a higher TVL & lower APY, with less established token pools having a lower TVL & higher APY.
Adam | DeFi Alliance: Yah makes sense. Are you guys imposing a lockup? How are DVF tokens allocated? What if I just provide liquidity for 2 days? Do I get DVF tokens?
Ross | DeversiFi: In terms of a lockup, the answer is yes and no - LPs can choose to receive their DVF liquidity mining rewards either immediately, or with a 6 month lockup. LPs that choose to receive their DVF rewards without a lockup will receive 30% of the total APY, whereas those who lock their DVF will receive 100% of the APY. This 30/100% approach was taken to incentivize long term DVF supporters & liquidity, as well as to deter automated ‘farm and dump’ strategies/vaults.
You can certainly provide liquidity for 2 days and then withdraw - there is no penalty for withdrawing liquidity and your liquidity is not locked
Adam | DeFi Alliance: Got it. I like the approach in incentivizing longer term liquidity. Can you touch on the pools eligible for rewards? How were they chosen?
Ross | DeversiFi: There will be 18 initial pools that will be eligible for LM rewards. 9 were chosen by the DVF community and 9 were chosen by the DeversiFi team. The results of the governance vote and the 18 initial pairs are here:
There is something for everyone in the list and governance will be adding more pools as well
Adam | DeFi Alliance: Makes sense. Will user funds be protected during the LM program?
Ross | DeversiFi: DeversiFi has been operating on mainnet for 18 months and has an existing TVL of over $45m. We are pretty battle-tested and the smart contracts that hold funds are similar to the contacts used by several projects who are building on StarkWare.We are also investigating purchasing insurance for additional peace of mind, or working with an insurance partner to give institutional customers the ability to purchase & top-up their cover if they wish
Adam | DeFi Alliance: Got it thanks for all this. Those are all the questions from my end! I guess to wrap things up -- any final things you wanna share about the LM program that people should be aware of? Further, where can people find you and learn more about DeversiFi and keep up with all of these developments? When does the LM program go live?
Ross | DeversiFi: Thanks for hosting @Adam Patel | DeFi Alliance! We are targeting early October for the program launch so now would be a great time for any Alliance members who might be interested to reach out to discuss more of the specifics and how to get setup on DeversiFi ahead of time etc. We will also be announcing the liquidity mining program publicly in a few weeks but have some materials that we can share over DMs that give a peak at some of the dashboards and what the program will look like.
Adam: My pleasure man and that's all helpful. You down to link any relevant docs / website / twitter etc. so people can find those quickly?
Ross | DeversiF: Thanks again Adam. Links are below:
DeversiFi Discord: https://discord.gg/yafEx8W
Discord: Ross | DeversiFi#2464
Adam | DeFi Alliance: Awesome! Thanks for joining us today Ross. It was a pleasure.