RON bridge holds 50% of liquid AXS
- binance locked staking also a big source of AXS that could potentially release to the market
Layer 0 complete list of funding rounds
- 2020 seed, $25M valuation
- 2021 A, $1B valuation, raised $6M, https://www.binance.com/en/blog/ecosystem/binance-labs-and-multicoin-capital-coled-$6m-series-a-for-layerzero-421499824684902766
- 2022 A+, $ , raised $135M, https://a16z.com/2022/03/30/investing-in-layerzero/
CRYSTAL
good reads
- cl on this break through:
- low volume, minimal cascade, market response is alt bid.
- very different compared to 2021 July
- https://mobile.twitter.com/CL207/status/1509408051400687620
- Synapse had huge volume with DFK partnership
- dune’s fund raising story
How LFG’s bitcoin reserve defends the UST peg
- notes from this post by Jump Trading: https://agora.terra.money/t/bitcoin-reserve-pool/5259
- how does the arbitrage work?
- the BTC pool has a “stiff price of 1 UST to $0.98 BTC” during a crisis when UST is below peg. Retail users who wants to sell UST during a crisis can sell into the pool and get 98% worth of BTC in return. If crisis deepens, more tiered price levels as UST depegs further downwards
- basically exit flow can redeem BTC at a discount of 200 bps
- Net effect is “Reserve Pool” uses BTC to purchase UST at a discount. Retails can probably get a better price with the reserve pool than anywhere else like the Curve pool
- After the crisis and UST is back above peg (because of demand, UST usually floats a bit above $1). Traders can use $1 BTC to buy 1 UST from the “Reserve Pool”. Then sell this UST to Curve pool when it’s above $1
- entry flow can buy UST at 1 dollar peg, (not 1.02), this is to encourage BTC to flow back into the Reserve Pool
- Most of the UST trading happens on Binance and Astroport. Traders should actively arb between these two exchanges & the “Reserve Pool”
- you can see that the price between exit flow and entry flow are different because the minimal spread is different (200 bps vs. 0 bps)
- the BTC pool has a “stiff price of 1 UST to $0.98 BTC” during a crisis when UST is below peg. Retail users who wants to sell UST during a crisis can sell into the pool and get 98% worth of BTC in return. If crisis deepens, more tiered price levels as UST depegs further downwards
- Reserve Pool is a virtual AMM with price quotes from an oracle
- the reserve pool doesn’t price UST based on the BTC : UST ratio. instead it’s based on predefined parameters.
- parameters are different, asymmetric based on market conditions: how far UST is above or below the peg
- pricing is split to two different sides when you buy or sell UST
- the $0.98 price was based on an empirical study of UST’s price devations, there is a graph in the post
- Oracle attacks
- Stale Oracles: there is a minimum spread parameter, to prevent from oracles being too slow. Min spread should be able to protect stale price update of 5 terrablocks, upto 25bps of price movement
- Manipulated Oracles: the Reserve Pool’s liquidity is much smaller than on other BTC exchanges. as long as slippage > 20bps on a 10MM trade, the pool should be safe
- To further backstop oracle risk, there should be a daily BTC redemption cap, outflow restriction. 10 ~ 30% of the total reserve size as the initial redemption limit.
- Concerns
- The reserve pool is only used in extraordinary times. the 200 bps exit spread should ensure this. 200 bps is selected based on empirical data
- During regular times, the Reserve Pool is full of BTC. contains no UST. only during and right after crisis, the pool contains UST. because BTC entry flow is at 1 dollar peg, BTC should flow much faster entering the pool (after crisis) than exiting the pool (during crisis)
- Jump crypto think Pyth oracle is a good candidate for this pool’s oracle
- BTC bridging will be through Wormhole to wBTC on terra