20 June 2022

what happened to DeFi

1. Solend Whale fiasco

2. Bancor IL Protection joke

3. Synthetix hit 200M+ day trade volume

Solend - Whale Fiasco 巨鲸事件

Background:

A whale has a massive position of $170M SOL deposited and $108M stables borrowed. they're currently 95% of the SOL deposits and 86% of USDC borrows.

If SOL drops to $22.30, the whale's account becomes liquidatable for up to 20% of their borrows (~$21M). It'd be difficult for the market to absorb such an impact since liquidators generally market sell on DEXes.

Rooter | Solend (hiring!) @0xrooter

1/ quick thread on what's going down at solend with the mega whale right now

Proposal 1 - SLND1

Enact special margin requirements for large whales that represent over 20% of borrows and grant emergency power to Solend Labs to temporarily take over the whale's account so the liquidation can be executed OTC.

全网群嘲the lease DeFi thing a DeFi protocol can ever propose.

Proposal2 - SLND2

Invalidate the last proposal

Bancor IL protection paused 无偿损失保护机制暂停

Background：

Bancor’s Impermanent Loss Protection is temporarily paused. IL protection will be reactivated on the protocol as the market stabilizes. This is a temporary measure to protect the protocol and its users.

IL Protection/Insurance: If the user has suffered any IL, fees earned by the protocol's pool tokens(BNT) are used to compensate for the IL.

Cobie @cobie

what is the point of impermanent loss protection if it just disappears when u most need it LOL

Hasu⚡️🤖 @hasufl

Bancor’s shell game of IL hiding is collapsing. They print new BNT to compensate underwater LPs and call it “IL protection”. The cost is transferred to BNT holders via inflation, which causes further IL to all other BNT pairs, and leads to further inflation. A death spiral.

Hasu⚡️🤖 @hasufl

@DeFi_Dad except Bancor doesn't *actually* reduce IL in any way. Like SUSHI, they just throw more incentives at the problem to compensate LPs. this strategy will always collapse at scale.

Synthetix hit 200M+ day trade volume

Synthetix ⚔️ (✨🔴_🔴✨) @synthetix_io

Synthetix just hit 200M+ in daily volume, here’s why: 1. Atomic Swaps on @1inch and @CurveFinance - Average 100m in daily volume 2. @optimismPBC Futures, Options @kwenta_io @lyrafinance @PolynomialFi Real usage. Traders love the experience + great fills for dex users https://t.co/xq1nxgn3uX

Rune @RuneKek

SNX absolutely exploding, have they been building new products or is it the core derivative-ish product reaching pmf on optimism?

• kwenta is syns leverage trading protocol

• Lyra is options trading protocol

• Polynomial is syns vault

Atomic swap on Curve

• USDC to sUSD cheaply (sUSD/3CRV pool)

• sUSD to sETH cheaply (Synthetix)

• sETH to ETH cheaply (sETH/ETH pool)

At first Synthetix does asynchronous trade execution (aka fee reclamation). Cuz the pool user experience, the SIP-120 is proposed. === lets Synthetix exchanges on L1 be atomic and now everybody can use them to get good price execution on ETH <> USD <> BTC (as long as there is enough liquidity in the Curve pools)