f(x) protocol - Building Liquidity for LRTs

good afternoon everyone um so yeah I'm s I'm contributor to Aladin da alind built a couple of protocols been around for something like three years and the latest protocol is FX FX protocol and today I'm going to talk about how to build liquidity with alties especially without having your LPS facing imper impermanent loss so first let let me introduce you quickly to where should I point this way yeah quickly to what uh FX protocol is FX protocol enables two kind of assets uh the first one is um are stable coins and they are totally decentralized stable coins perfectly us dep by Design because they're I'll explain it in a couple of minutes uh they're backed by decentralized assets 100% on chain and they have the ability to earn real yield from coming from if staking or reaking Plus IAL emissions and by Design they're like way more scalable than a CDP model because their the stable con is always 100% collateralized the other kind of asset uh that FX enables are leverage uh tokens and these leverage tokens uh give you up to 5.6x leverage on BDC 4.3x leverage on E without uh facing any individual liquidation risks so you can basically hold them on the long term and don't don't have to manage any Landing or leverage like landing position and there's no funding on the E leverage tokens so basically you can just hold it for the hold cycle um the way it works uh it's pretty simple it works thanks to the FX en variant I won't go too deep into the details because I only have 12 minutes today but no worries so the way it works basically you can I'll take the example of FX USD which is our Flagship stable coin backed by lsts and mostly liate e you can pledge liate if to the protocol and it will either give you FX USD which is a stable coin or X which is the leverage token so you can basically choose whether you want to get stable coins or a leverage token and the invariance says that at all time the value of the whole reserve of lios e is equal to the value of all FX usz so basically the FX US market cap and all X te on the market and this is how uh we can um calculate the leverage ratio of the X tokens but don't worry I got you covered with another keynote that you can uh find by scanning this QR code if you want to dive deeper into how The Leverage Works uh feel free to scan it and you you you you got I got you covered in less than 20 minutes I promise you also can find it it was uh during if Belgrade last last month so if you look on on YouTube you'll be able to find it as well but what did I introduce you to FX protocol so just to to sum summarize in nutshell the way it works since you can mint the tokens uh both the stables and The Leverage tokens but I'll stay on the Stables because that the topic of of today since you can mean the stables at Oracle price at all time uh you can see the protocol just as a DEX with no price impact because when you mint it's just like swapping you lose exposure to the collateral it's just like swapping Steve for FX USD basically except there's uh no price impact so if you want to stable coin basically you just swap for FX USD if you want uh enhance exposure to e then you just swap to for X Ste and get leverage simple as that so yeah as I said you can see the protocol just as a with no price impact so if you consider it like that basically this the the tokens both the stable to stable coins and leverage tokens are as liquid as their collateral they inherit from the collaterals uh liquidity so that means in that example FX USD is as liquid as lios state if by Design but we don't there's not only FX USD so if if you understand understand that FX USD is as liquid as lad state if if you pair any stable coin with FX USD you're also building liquidity with lios de if at the same time so that means you're not only building liquidity with a perfectly stable stable coin stren strengthening your your own Peg but also building liquidity with its collateral and I told you about FX USD already which is the first logo you can see here on the left but we also built other kind of stable coins so the second one here um is RUSD and this one is the exact same model as FX USD while FX USD is backed by mostly Li e and a little bit of fra e r USD is mostly backed by ethi E and a little bit of Renzo e that means by pairing with r USD and that's the topic of this keynot you're instantly building liquidity with EFI e and Renzo e um the third one is uh btcusd that's uh um the almost the same mechanism but it's backed by rat Bitcoin and the latest one is kind of off top pick today but so it's worth telling about it that's F if it's not ped to the dollar that's why it's a little off topic but it's uh my own favorite stable coin because it's not P to the dollar it's only stable because it keeps 10% of e volatility so so that's kind of a if native uh if maximalist stable coin so why building liquidity with one of the FX stable coins so as I told you you're kind of building instant liquidity with the the collateral and since you're building liquidity with a stable coin your LPS won't face uh any impermanent loss at all because FX USD RUSD btcusd are perfectly pegged at all time and if your stable coin is a CDP model you may be interested in building um efficient liquidity with with your collaterals to facilitate liquidations for instance and that's probably uh the reason why uh other major stable coins built pretty decent liquidity with FX USD such as go for instance has something like six millions uh USD pull on curve uh DOA did a pretty good pull as well with 4.5 millions and FRX is following with a little over a million dollars so yeah as I like to say don't trust verify I verified for you but you can do the exercise as well I went to C swap oh yeah because since I told you you can see the Procol just like a DEX Dex aggregators routed the protocol just like a DEX uh so did cow swap so I did um a little experiment I tried to to swap 3,000 rap steak E for for FX USD and cow Swap and when you look at the price impact you see there is a point uh it's a maybe a little small 28% price impact now let's take a look at the same uh exercise but swapping for usdc our favorite centralized stable coin now the price impact is 67 so you lose about 5050 50,000 bucks in the operation now let's take a look at the market cap of these two stable coins usdc here I think I have a pointer oh yeah that's cool it's $22 billion market cap on ethereum and FX USD I blurred because there's tons of lines between the the two of us is only 20 million so with 0.1% of the market cap on ethereum and and the liquidity we managed to have like twice more uh twice Less Price impact on the same uh swap so that's probably why paring with one of our assets makes a lot of sense and to help you building liquidity with one of our stable coins we introduce this double gauge mechanism so the way it works is that we can create gauge to Direct effects and Emissions to a curve pool that uh pairs with f one of our stable cones FX USD R USD or btcusd and by doing so you to to to direct emission you can use like famous uh incentive markets such as um Paladin vote uh which is pretty pretty efficient and lets you not overspend on your incentives but you can also use vum or Stak Dow vote market for instance and why would you direct incentives U simply because of the ROI that's pretty simple if you yeah yeah crazy R right because if you direct let's say if you want to incentivize a pool yourself when you spend a dollar your LP gets $1 but if you um push uh incentives using a an incentive Market you get up to 5x rois so that means when you spend $1 to push incentive to uh a pool uh your LPS get $5 of fxn so that's way way more efficient and since it's a double gauge we call this double gauge because it's on curve and you can also have a CRV gauge if you want if you have like vcv or or VL CVX for instance and to so do direct incentives the voters are either V fxn because fxn is a v token or VL CVX because FX protocol is integrated into into convex for both LPS and and and and um governance tokens and or or also Stak those FX so yeah that's basically it um feel free to to scan this QR code as well if you want to find all the social networks links and feel free to to reach out I'll be around with the Paul my colleague all day we have a booth down the stairs with very nice t-shirts grab some because we won't take them back home so please grab some so yeah that's it if you have any questions feel free we still have u a couple of minutes I could take question or two