What is the latest Launchpool from Binance and who is Maverick with a daily capital efficiency of over 100%?
What is the latest Launchpool from Binance, and who is Maverick with over 100% daily capital efficiency?
“Our goal is to become a top three decentralized exchange in terms of trading volume within the next six months,” said core developer Bob Baxley when discussing Maverick’s future.
Binance announced the launch of a new project called Maverick Protocol (MAV) on its Launchpool platform. Users can deposit BNB and TUSD into the MAV mining pool on the LaunchBlockingd website to receive MAV rewards starting from June 14, 2023, at 08:00. MAV can be mined for a total of 25 days. Once the liquidity of MAV tokens meets the requirements, Binance will open MAV/BTC, MAV/USDT, and MAV/TUSD trading markets. The exact date and time will be announced once they are confirmed.
Within a month of its launch, Maverick, which was once among the top three in Ethereum’s mainnet transaction volume, had less than 1% of TVL compared to Uniswap and Curve.
After Ethereum completed the Shanghai upgrade on April 12, more than 18 million ETH were unlocked, which clearly showed an increase in activity in the DeFi market and some significant changes.
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However, there is still a significant problem, namely the huge limitations in the current AMM field. One is the low utilization rate of AMM funds. Regardless of the early xy=k model or the later Uniswap V3 model, most of the trading pairs lack sufficient depth on decentralized exchanges. The second is the impermanence loss, which has not been fundamentally resolved. Relying on token economics for compensation is ultimately unsustainable.
For example, even though they dominate in total locked value (TVL) and trading volume, most liquidity providers on Uniswap are still losing money. Transaction fee revenue is usually not enough to offset impermanence losses, especially for centralized and passive liquidity.
The DeFi industry urgently needs to address this issue, and the Maverick Protocol has entered users’ vision at the right time.
According to Defillama’s data, as of April 21, Uniswap ranked first on the Ethereum network’s DEX leaderboard, with a 24-hour trading volume of $1.24 billion and a weekly increase of 73.17%. It was followed by Curve ($131 million), with a weekly increase of 24.71%.
What is striking is that Maverick Protocol successfully entered third place, with a 24-hour trading volume of $36.45 million and a weekly increase of 58.86%.
How Maverick AMM improves liquidity efficiency
Maverick Protocol is a dynamic distribution automated market maker (AMM) that moves based on trading prices, aiming to provide deeper liquidity, optimal liquidity for decentralized financial markets, and improved capital efficiency. On this basis, it provides tools to maximize transaction fee revenue, or reduce or avoid losses without compensation.
The uniqueness of the protocol is that the Maverick AMM was the first to introduce the design of Dynamic Distribution AMM, which includes the following three major functions:
The first AMM that has the inherent ability to automatically move centralized liquidity based on trading prices
Provides tools to empower LP to perform different liquidity market-making strategies: only follow price increases and move, stay in place when prices decrease; only follow price decreases and move, stay in place when prices decrease; move as prices rise and fall; and fix liquidity to one or more price points.
AMM helps LP realize real-time compound interest income.
Among the four liquidity modes, the left and right directional modes introduce the innovative AMM concept of directional LP for the first time, allowing liquidity providers (LP) to follow the direction of liquidity movement based on the price of the trading pair, and obtain excess returns in the correct choice, while avoiding impermanent loss.
It allows liquidity providers to freely choose to let their liquidity move automatically to stay close to the current price. This liquidity movement can improve capital efficiency, provide better capital utilization for LP, and allow them to make strong bets while charging fees.
Maverick AMM aims to help users maximize capital efficiency, thereby creating more liquid markets; this means that traders can get better prices, and liquidity providers can get higher fees. In addition, the built-in functions also help reduce the high GAS fees caused by adjusting positions.
Liquidity providers can choose to follow the asset price in one direction, effectively betting on the price trajectory of a specific token. These directional betting types can be understood as one-sided liquidity strategies, as liquidity providers expose most or all of them to a single asset in a given pool. Maverick Protocol’s flexibility makes it one of the most liquid markets in decentralized financial markets, and it is convenient for advanced or higher-end LP and protocols on it to conduct linear hedging to ensure delta neutrality and earn income more safely.
In addition, Maverick AMM also allows liquidity providers to customize liquidity distribution, providing liquidity unilaterally or in any liquidity distribution shape.
The underlying AMM automatically moves centralized native liquidity, custom centralized liquidity movement direction, and LP fee automatic compound interest, providing DeFi users such as liquidity providers, DAO treasuries, and project development teams with the possibility of maximizing capital efficiency and the most precise liquidity management tools.
Directed LP for one-sided call or put options
In the current AMM field, liquidity providers cannot set a single, definite call or put option when providing liquidity.
For any existing AMM in the DeFi field, liquidity providers implicitly bet that the price of the asset pair in their pool will oscillate sideways, allowing them to collect transaction fees without significant changes in their deposit asset ratio. If this bet is wrong—i.e., if the price moves in any direction other than sideways—the liquidity provider will suffer impermanent loss that may exceed any fees they collect.
In static liquidity AMMs, it is advantageous for LPs to have bilateral asset allocation, so they can immediately access trading volume and collect fees. However, bilateral LPs increase the possibility of impermanent loss.
In AMMs like Uniswap V2 xy=k, even one-sided LP is not supported. In existing interval AMMs such as Uniswap V3, one-sided LP is possible, but the capital efficiency of one-sided LP is zero unless there is a built-in mechanism to move its liquidity closer to the price level.
In Maverick, directional LP can provide liquidity for one asset while maintaining high capital efficiency due to the underlying Maverick liquidity transfer mechanism.
Liquidity providers can now choose to follow the price trajectory of a specific token effectively by betting on a particular token in one direction. These directional bets are similar to one-sided liquidity strategies, as liquidity providers are mostly or wholly exposed to a single asset in a given pool.
As the price moves in the selected direction, the AMM will automatically re-concentrate liquidity to follow it and earn more fees. If the liquidity provider makes the right bet on the price direction, they can enjoy the liquidity re-concentrated around the price when it moves in the direction they have chosen without suffering any impermanent loss (IL).
In Maverick with a single asset, directional LPs (i.e., those using Mode Right or Mode Left) are only exposed to IL in one direction. If the LP chooses the mode that corresponds to the price change (e.g., the LP is in Mode Right and the price rises), the LP will not experience IL. Thus, the IL is one-way, meaning that the LP faces price movement risk in only one direction, not two.
4 Liquidity Transfer Modes
Concentrated liquidity is not always capital efficient and can lead to improper allocation and decreased efficiency. The Maverick AMM helps users improve capital efficiency by automatically reconcentrating liquidity, and liquidity providers can choose from four liquidity transfer modes to eliminate high GAS fees generated from adjusting positions around prices.
These four modes include:
Static mode – Liquidity does not move
Right mode – Liquidity moves as the price rises but does not move as the price falls
Left mode – Liquidity moves as the price falls but does not move as the price rises
Bidirectional mode – Liquidity moves as the price increases and decreases
After more than a year of development, Maverick built a next-generation universal AMM from scratch. The smart contract-based automated market maker (AMM) engine provides support, integrating automated liquidity movement management into smart contracts. Maverick has rebuilt a brand-new smart contract set, and AMM helps users move liquidity without any interaction with the interface, without paying high GAS fees. Since liquidity flow is automatically performed by the AMM smart contract, liquidity providers do not need to pay GAS fees when providing their liquidity services. The only time they need to pay GAS fees is when they increase or decrease liquidity.
Maverick AMM aims to be a complex enough tool that allows LPs to design and automate individual strategies to concentrate and move liquidity. Offering a range of out-of-the-box liquidity modes – static and mobile – allows users to execute a wider range of liquidity strategies. This innovative solution helps liquidity providers manage their liquidity more efficiently, achieve higher returns, and provide traders with a better trading experience.
In a previous interview, Bob Baxley, the core developer of Maverick, said, “If liquidity providers in existing AMMs want to keep their capital active as much as possible, they are forced to adjust their liquidity positions every hour, which wastes their time and fuel. By allowing liquidity providers to choose whether and how their liquidity changes with the price of a given pool, which other AMMs do not do themselves, Maverick makes the market run more efficiently and generate more consistent fees.”
Using the wstETH-ETH pool on Maverick as an example, the pool’s 24-hour trading volume has increased significantly while its TVL has steadily grown since its launch on Ethereum.
At the same time, the capital efficiency of Maverick’s wstET-ETH pool has always been at the forefront of the market. As of April 5th market data, its capital efficiency is 8.17 times that of Uni V3:
On March 14th, the pool’s capital efficiency reached a record high of 442%, far exceeding the data of Uni v3’s wstETH-ETH pool and Curve’s stETH-ETH pool on that day:
In addition, Maverick launched the “Boosted Position” feature on May 2nd, which allows project teams to accurately and flexibly incentivize any liquidity distribution on Maverick through their tokens. This feature provides project teams with:
Accuracy to a single position
The maximum flexibility to incentivize any shape and liquidity movement pattern of liquidity distribution
The DAO organization of Lido, a leading project in the LSD community, has approved the addition of LDO incentives to the wstETH-ETH Boosted Position on Maverick in early May, which will be launched on Maverick in May.
What is Maverick Protocol?
Maverick Protocol has completed two rounds of financing, led by Jump Crypto and Blockingntera, with other participating investment institutions including Circle Ventures, Gemini, SBlockingrtan Group, and Coral Ventures.
On March 9th, decentralized crypto-derivative protocol Maverick Protocol announced the launch of its decentralized exchange (DEX) Maverick 1.0 on the Ethereum mainnet. After launching on Ethereum, Maverick is basically among the top three to five in terms of trading volume on the Ethereum mainnet. And it has been online on the zkSync Era mainnet for two weeks.
Soon, Maverick Protocol announced new news and officially cooperated with OKX Web3 wallet, connecting to the OKX Web3 wallet. Users can conduct low-slippage transactions and staking on Maverick Protocol by connecting the OKX Web3 plugin wallet.
And the latest news is that Binance announced the launch of Launchpool’s new project Maverick Protocol (MAV), and users can invest BNB and TUSD in the MAV mining pool on the LaunchBlockingd website after 08:00 on June 14, 2023 to obtain MAV rewards. MAV can be mined for a total of 25 days.
Currently, Maverick’s smart contract code has been audited by three auditing companies and one auditing community: Zellic, Certik, ADBK, and Code4rena. In addition, professional smart contract developers from companies that invest in Maverick also conducted external audits of the code.
Regarding the future of Maverick, core developer Bob Baxley said: “Our goal is to become one of the top three decentralized exchanges in terms of trading volume within the next six months.” It is believed that Maverick AMM will continue to integrate with cutting-edge decentralized protocols, including LSD, perpetual futures, quantitative strategies, DeFi hedge funds, lending, and leverage trading.
This indicates that the Maverick team is confident in its development prospects and will continue to work hard to provide users with better services and experiences. With more partners and investors joining, Maverick Protocol is expected to achieve greater success in the field of decentralized finance.