Author: 2LAMBROZ.ETH Compiler: CoinTime 237
1. What is Mav Protocol
Mav Protocol is a trading protocol with a special algorithm that can provide efficient liquidity. In simple terms, it is a trading platform with a special algorithm.
Through Mav, liquidity providers will have more options in providing liquidity and can get different exposure in different ways.
Mav Protocol was founded by @alvinxuzj and the project raised $17 million in funding from @PanteraCapital and others. It was launched on Ethereum (ETH) and zkSync in March 2023.
Mav's "Maverick AMM" benefits both "liquidity providers" (LPs) and "traders" by having an efficient liquidity provision model.
Next, let’s take a closer look at its liquidity provision model.
Maverick AMM introduces the concept of directional liquidity provision. In short, it provides more control and choice to liquidity providers.
There are four types of liquidity provision models in Mav Protocol:
1) Mode Right: Liquidity providers can provide funds to only one asset in a specified trading pair.
2) Mode Left: Liquidity providers can provide funds only to another asset in a specified trading pair.
3) Mode Both: Liquidity providers can provide funds to both assets in a specified trading pair at the same time, achieving two-way liquidity.
4) Mode Static: Liquidity providers can lock funds statically in designated trading pairs without changing with market fluctuations.
Overall, Mav Protocol provides a high-level liquidity provision model, giving liquidity providers more choices and control.
In the different modes of "Maverick AMM":
1) Mode Right: As a liquidity provider, if you think the price of LP tokens will rise and are willing to buy at any price, this mode is suitable for you. It can be analogized to the periodic cumulative cost (DCA) increase plus fees.
2) Mode Left: If you think the price will go down and are willing to sell at any price, then this mode is for you. It is almost similar to the periodic cumulative cost (DCA) decline plus fees.
3) Mode Both: You think the fees are high enough to cover market fluctuations and small changes as well as low volatility. This mode allows you to provide liquidity for both assets at the same time.
4) Mode Static: It is basically Trader Joe’s liquidity book. You lock your funds in a specified trading pair and it does not change with market changes.
From my perspective, as a liquidity provider, I am worried that price fluctuations and spreads between trading pairs will cause me to suffer great losses. These models are more like a tool to earn some fees in the process of buying or selling, similar to Uniswap V3. Efficient liquidity can reduce slippage, provide traders with better prices, increase trading volume, and be more beneficial to decentralized exchanges (DEX).
But can Mav’s token economics capture value? Let’s take a look at its token economics.
2. Token Economic Model
In terms of tokenomics, $MAV tokens can be staked to obtain veMAV, which can be used to vote on protocol governance. This is different from the "hopium gov tokens" in Uniswap. Users holding veMAV have voting rights and can allocate protocol incentives to specific funding pools within Maverick.
However, the details of these token economics are not publicly displayed on the user interface (UI) nor can they be easily found on the project’s website or other online channels. I received a response when I asked a question in their Discord community regarding the token economics model.
1) Token Distribution
-Binance Launchpool: 1.5% (no lock-up period)
- Investors: 18% (unlocked from June 2024)
- Public welfare projects: 16.5% (5% initially released, unlocked from December 2023)
- Liquidity mining and airdrops: 30.85% (5% initial release, unlocked from December 2023)
- Foundation: 10% (1% initial release, unlocked from December 2023)
-Team: 19% (0% initial release, unlocked from June 2024)
- Advisors: 4.15% (0% initial release, unlocked from June 2024)
2) Initial circulating supply: 12.5% of total supply
According to Binance Research’s valuation, $0.1 MAV! = 200 million FDV! ? Initial market cap = 25 million! ?
Man, are we back in a bull market? Why am I still broke?
3. Protocol indicators
Regarding Protocol Metrics, here’s some excellent data analysis by @0xMurathan:
In 4 months, trading of Liquid Staking Tokens has seen significant growth (volume may be related to pool efficiency), with trading volume accounting for 25.3% of the LST market share.
In 4 months, total trading volume reached $1.9 billion.
The total locked value (TVL) is $26.9 million.
In terms of marketing, Mav Protocol's marketing strategy and marketing are very well done.
It used airdrops to incentivize airdrop hunters to participate in liquidity provision and trading. And the timing on zkSync was just right, which made its trading volume, hype, and the number of airdrop hunters reach a peak.
Within 10 days of launch, Mav successfully pushed TVL to $6 million.
The jump from $800k on March 7 to $6m on March 9 could be a data error or the team got some liquidity from investors or had some good promotion that I missed, but either way, it should be attributed to the team's execution.
4. Action Plan
I will break down some possible actions according to my logic:
1) Acquisition and sale of BNB launchpad
If you hold BNB, it is recommended to acquire and sell on the BNB launchpad.
According to data, there is currently $1.8 billion in funds dormant in BNB's yield farms.
2) Buy with hope and trust in CZ
In short, CZ is good and the token will go up because Binance needs to show strength. In addition, the initial market value is actually basically controlled by the team.
- Public welfare projects: 5%
- Airdrop: 5%
- Reserve Fund: 1%
They don’t have to give out all of their tokens in an airdrop, or lock them up. If they really wanted to, they could keep the “real” initial supply to 2-3%. That would only leave around 4-6 million real circulating supply, which is very easy to “hype” for a token listed on Binance.
3) Sit back and watch the bear market, but try to participate in MAV token mining
Be a market bear like me. You guys have fun, I will just participate in mining and hold/sell based on my mood.
Due to FTX’s risk exposure and funding issues, I hope to enjoy the token price appreciation without much risk while stacking my assets.
5. Summary
Frankly speaking, Mav has a great team. They have strong fundraising capabilities and excellent execution capabilities.
In addition, the protocol’s user interface and user experience are also very good, and it is not just a project with some novel liquidity provision technology.
At the same time, listing on Binance is also a good thing. It’s just that the current valuation is too high, the value of the token is still unknown, and the overall market sentiment is still very pessimistic.