Parsec Weekly #26
It’s All Concentrated Liquidity
Precisely two years after the open sourcing of Uniswap V3, DeFi markets are coming to the conclusion that concentrated liquidity is the path forward. Uni V3 has been successful for the fat tip of onchain assets, dominating volume for ETH trading. Recently however, the narrative has shifted. New coins like ARB saw massive prelaunch liquidity utilizing concentrated liquidity.
Notably a non fork has also popped up with some liquidity and volume - trader joe v2. TJ is doing a few new things around custom shapes for LPs among others, but most importantly is printing volume! One of their ARB pools did $50m in daily volume. Other teams are recognizing the trends here and following suit. Camelot, PancakeSwap and Sushi all announcing concentrated liquidity plays, not to mention yet to be launched CrocSwap. Success here for competitors in my view hinges on farming schemes, if Uni-v3 is bad at anything it is farming, the RBN liquidity incentives notoriously having been exploited by `onetickdao.eth` leading to apathy among farmers. DeFi macro conditions have also been quite bad for concentrated liquidity farming, despite the endless possibilities unlocked by the extra degrees of freedom. More eyes on the problem will push concentrated liquidity to improve, but it is increasingly clear to me that it is a leading form factor for AMMs and will be a big part of the next phase of onchain markets.
Shanghai Approaches
Heading into Shanghai the LSD market probably emits the best risk pricing. cbETH sits >1% off peg, with stETH only 20bps off peg.
cbETH remains a bit of an outlier due to a non-rebasing price and regulatory uncertainty around coinbase’s staking program. These prices are in sharp contrast to the severe discounts leading into the merge and other risk events over the past year. Due to being significantly less complex than the merge, onchain traders are signalling a smooth upgrade. LSD related risk assets have been mixed, with the overhang of a potentially large set of withdrawals hanging over the market. In the medium term Shanghai certainly unlocks more complex meta games around ETH staking, but uncertainty reigns heading into next week.
NFT Market Overview
-kezfourtwez
Another slow week of price action in NFT’s with most of the attention on Nakamigos again as they made their push back to ATH, though they are so far unsuccessful in breaking through it. Farmers gave most of the volume to Wrapped Punks and most bluechips are still bleeding. Nakamigos, Azuki, Captainz and Milady are the only collections green in the top 20 this week. Miladys are up 76% off the back of Zhu and Cobie changing their pfp’s. Aside from muted price action we did have some interesting releases.
Otherside/Legends of the Mara
A few days ago, holders of Otherdeeds were given the option to claim a Vessel and decouple their Koda’s. To do so they needed to burn the original deed and claim a new one. This was the first in what is essentially a series of activations to give holders the resources they need and immerse them in the lore of the Otherside. To participate in Legends of the Mara holders will need a deed from the new contract ‘Otherside expanded’, which Yuga says is for the purpose of having dynamic and upgradeable NFT’s.
33% have been minted so far and Vessels are sitting at a 0.33e floor price for the bottom rarity tier. Price action of claimed deeds (the airdrop), has acted as a post-reveal NFT. The value of the Vessel has been taken off the value of the new deed by the market, which sits at 1e compared to the the original deeds still at 1.5e. This puts claimers at a loss if they received the bottom or middle tier, lucky claimers who received the top tier are at a slight gain with the value of the Vessel and new deed currently at 1.66e.
Vessels will eventually turn into Kodamara’s through gamified experiences throughout the rest of the activations, you can read more about their purpose and the process on the LOTM site. No definitive dates or next steps have been announced yet aside from that we can expect more in May.
Gemesis
This week Opensea released their new marketplace for pro traders ‘Opensea pro’, and with it Gemesis. Opensea pro is a rebranded and revamped version of Gem, anyone who traded on Gem before March 31st can claim a Gemesis.
With 180k total supply and a 0.04e floor price It’s no $BLUR airdrop, but they have said this is purely a token of appreciation and nothing to do with a potential rewards program. With the marketplace competition heating up this is Opensea’s first proper clap back, they are boasting the fastest and most advanced NFT aggregator on the market, with 0% fees and the deepest liquidity.
When Blur came along it was a whole new level of speed and responsiveness for high volume traders. With a high performant product the market hadn’t seen before, and their liquidity incentives, they were able to gain significant market share quickly. What Opensea are saying in regards to their performance is technically true as they aggregate listings across 170 different providers as well as collection offers, Blur bids and NFT pools. Though it’s yet to be seen if they can win back users and regain their marketshare. My gut says to do so, they’ll really need to bring the heat in the form of an equally impressive liquidity incentives program.
Thanks for reading and bye for now, stay on top of the markets with Parsec and we’ll see you next week
good
superbb