LIFINITY PROTOCOL

LayerThird · 2023-03-15T23:39:17.000Z

The Lifinity Protocol is a decentralized exchange that aims to improve capital efficiency and reduce impermanent loss. It achieves this promise by implementing certain strategies such as concentrating liquidity, using oracles for proactive market making, and implementing a rebalancing mechanism. Lifinity Exchange is community-driven and targets to provide a more efficient and effective way for users to trade cryptocurrencies. First, let’s briefly emphasize some boring stuff… Scary, huh? No worries, Lifinity makes it simple ☺ AMMs, or Automated Market Makers, have become a popular infrastructure in the DeFi space. Now you may wonder what DeFi is. Don’t worry, that is not something super different than traditional finance. Defi or Decentralized Finance refers to a movement to use blockchain technology and cryptocurrencies to create a more open, transparent, and accessible financial system. DeFi aims to enable people to access financial services without the need for traditional intermediaries such as banks or credit card companies, which can be slow, costly, and difficult to use. Instead, DeFi uses smart contracts and decentralized networks to create and enforce financial contracts, allowing people to lend, borrow, trade, and transact with each other directly. DeFi has the potential to revolutionize the way we think about and use financial services. However, it has limitations such as capital inefficiency, impermanent loss, and high fees. To see how AMMs work, you can watch this video. The Lifinity team proposes a solution that addresses these issues through the use of concentrated liquidity, a proactive market making strategy using an oracle, and a rebalancing mechanism. By concentrating liquidity, the market becomes more efficient for liquidity providers(LPs) and less costly for traders. The use of an oracle helps to reduce impermanent loss, and the rebalancing mechanism allows for the pool balance to regress to the bonding curve while also generating profit. Looks complicated?... If yes, please don't give up here and read further until I give you a simple example below. I know it’s not easy to understand the mechanics behind the Impermanent Loss. You can watch this video and learn how IL is related to arbitrage. It’s a good analogy to use apples and potatoes, that’s why I will repeat it here the same example in the last video. Imagine we have a grocery shop (the DEX), selling apples and potatoes (our token pair in the pool). When someone is buying or selling too much of one item the balance changes and the price of items are changing accordingly. Please remember this example of a grocery store for the next chapter. See? Easy peasy ☺ Proactive Market Making Proactive market making is a technique used in decentralized finance protocols to minimize the risk of Impermanent Loss, which can occur when liquidity is concentrated in a single pool. The technique involves using an oracle to continuously provide updated prices for the assets being traded in the pool, allowing the protocol to adjust the prices of the assets in the pool proactively and avoid stale prices that could be exploited by arbitrageurs. Do you remember our example with the grocery store? Now, the arbitrageur is a guy who buys, let’s say apples from our store, and sells it somewhere else with a higher price for profit. In this example, an oracle functions like a billboard in a big market hall, where we can read all the prices traded in the market. As we know what prices are offered elsewhere for an apple, we can adjust our prices in our grocery store so that the arbitrageur cannot get a profitable trade. This helps protect liquidity providers from incurring Impermanent Loss, which can occur when the price of an asset in the pool moves away from the price at which the liquidity was originally deposited. The use of an oracle, such as the Pyth Network on the Solana blockchain, also makes it difficult for front-running to occur because the oracle provides price updates in every slot, approximately every 0.5 seconds. Rebalancing Mechanism The rebalancing mechanism in this protocol aims to minimize the risk of Impermanent Loss and maximize profit by adjusting the liquidity of the pools. This adjustment occurs on every trade and/or change in the price of asset x, as determined by the oracle. If x makes up less than 50% of the total value of the pooled assets, the market maker will decrease liquidity for buyers of x and increase liquidity for sellers of x in order to regain balance and incentivize traders to sell against the pool while discouraging them from buying. This helps to ensure that the pool balance regresses to the bonding curve. The rebalancing mechanism also allows for the concentration of liquidity beyond what is typical in other concentrated liquidity protocols, as it makes it more difficult for the price to fall outside of the desired range. Rebalancing Scenarios Let’s consider the possible scenarios that can occur in practice. The pool balance only changes when users trade with the pool or the oracle price changes. The combination of the two can generate a profit or a loss for liquidity providers. Below are the four possible scenarios and how the protocol handles them: The price of x increases when x comprises more than 50% of the pool The price of x decreases when x comprises less than 50% of the pool The price of x increases when x comprises less than 50% of the pool The price of x decreases when x comprises more than 50% of the pool Scenarios 1 & 2 are in favor of liquidity providers since they generate a profit or reverse the Impermanent Loss that constant product market makers would incur. The rebalancing mechanism effectively buys the dip when prices fall and takes profit when prices rise. These are the most likely scenarios since the oracle price tends to move faster than the price on other Decentralized Exchanges (DEXs) and arbitrageurs cannot profitably trade against our pools. Conversely, 3 & 4 are scenarios that work against liquidity providers. They are less likely to occur since the oracle price usually moves ahead of other DEXs. In the case that it does happen, however, the protocol will adjust its liquidity to minimize further Impermanent Loss. Some kinky stuff… The base trading fee for each pool on Lifinity is determined by the team with the goal of maximizing profitability. This fee may change frequently due to changes in liquidity from other DEXs. In addition, Lifinity adjusts the base trading fee based on market volatility to optimize spreads and prevent front running. In DeFi, the spread is the difference between the bid price and the ask price of an asset, and it is a measure of the liquidity and market depth of the asset. Front-running is a trading strategy in which a trader takes advantage of advance knowledge of a trade or order to profit from it. This can occur, for example, if a trader is able to see the details of a trade or order through their access to a Decentralized Exchange's order book or matching engine, or if they are able to see the details of a trade or order through their access to the blockchain itself. Front-running can be seen as a form of market manipulation, as it allows traders to profit at the expense of other market participants, and it can undermine the fairness and transparency of DeFi markets. Currently, this volatility is monitored using an off-chain bot, but the team plans to eventually implement this function on the blockchain. Currently, Liquidity Providers receive 85% of the trading fees, while the remaining 15% is retained as a protocol fee. In the future, Lifinity plans to set target liquidity levels for each pool and adjust the distribution of trading fees accordingly, with the goal of optimizing liquidity. Did Someone Say Tokenomics Innovation? Like many DeFi protocols Lifinity has also its own token. LFNTY is the governance token of the Lifinity Protocol. It can be used to increase or decrease exposure to the Lifinity platform. VeLFNTY is another token that allows users having voting power and access to protocol revenue. It is earned by locking LFNTY for a certain period of time, and it cannot be transferred or displayed in standard wallets. It has two states: locked and unlocking. XFNTY is a tokenized version of 4-year locked veLFNTY and is a standard SPL token. It can be freely converted to and from 4-year locked veLFNTY at a 1:1 exchange rate, but it must be converted back to veLFNTY in order to begin receiving protocol revenue. Lifinity's tokenomics innovations include a protocol that continually obtains liquidity for all token pairs available on the DEX. There is an improved veToken model with options for decaying, linear unlocking, native tokenization, and a system that allows protocols to bribe veLFNTY holders in order to cheaply secure permanent liquidity. Additionally, the share of fees received by LPs is dynamically adjusted in order to target the optimal level of liquidity, and tokens are launched using a veIDO. UH-OH… Now Who Are The MMaaS & Laas Brothers? ‘’ Prepare for trouble! And make it double! To protect the Defi from devastation! To unite all the liquidity within our nation! To denounce the evils of front-running bots and price spreads! To extend our reach to the stars above! MMaaS! LaaS! Team Lifinty blasts off at the speed of light! Surrender now, or prepare to fight! Meowth! That's right! ’’ (Taken from Pokemon’s infamous Rocket Team motto and brutally modified.) Lifinity offers two services for protocols looking to improve liquidity for their tokens: Market Making as a Service (MMaaS) and Liquidity as a Service (LaaS). These services require a custom oracle to be set up for Lifinity to market maker for the protocol's tokens. In MMaaS, the protocol provides the assets that Lifinity uses to market make and Lifinity keeps the trading fees, while the protocol retains any market making profit. In LaaS, Lifinity provides the assets used for market making and takes on the price risk in exchange for compensation from the protocol in the form of the protocol's chosen asset based on the volume generated. After talking about all the technical things above let’s dive into other cool things. Well maybe some of them are not so cool but yeah, you will like it. Then… What Is Flare NFT? 10,000 animated non-fungible tokens (NFTs) called Flares were sold by Lifinity on Dec 27, 2021. The proceeds from the Flare sale were deposited into Lifinity's liquidity pools. All revenue generated from trading fees and royalties is used for buybacks and reinvestment. If the price of Flares falls below 50% of their mint price, they will be repurchased using the pooled funds. In addition, 1% of the total supply of Lifinity's LFNTY tokens is reserved for Flare holders. Features Let’s explore the app and talk about some of its features: Dashboard: Here you can see general metrics of Lifinity (volume, fees etc.) You can see these metrics daily, weekly or monthly. Also, you can see the cumulative volume and cumulative fees. Furthermore, you can also see the circulating supply and the distribution period of locked tokens. A trick for you: you can navigate the cursor on the charts to see metrics of the specific date you want. Now if this is not cool, I don’t know what is! Swap: You can swap between any listed tokens you want. Just connect your wallet and swap it! Lifinity will show you the best route to trade on various protocols (e.g. ORCA) without visiting them. Choose it and you are good to go. Pools: A wide range of pools to earn rewards... You can click on stats and see the statistics for each pair. NFT: You can click on the NFT tab and it will redirect you to the Flare page and bang! You can stake/lock your Flare NFT and earn LFNTY tokens. IDO: Here you can join IDOs with just a click. Reward: You can see your staking rewards depending on your action. What’s More? The team is actively taking care of the community. You can follow them on Twitter, Discord and Medium. They actively organize AMAs and gather with the community quite often. They are open to any suggestion and comments. You can also listen to their podcasts, where they talk about various topics. Rewards: Starting from December 24th, 2022, they announced that rewards will be distributed in USDC. That is dope! You don’t get affected by any price fluctuation. Discord: One cool part about the Discord server is they have a very detailed page with every useful link about the project. For example, you want to read the litepaper? Bang! It’s there. You want to buy Flare NFT? Bang! You can go and find it in your favorite marketplace. Moreover, it is important to be able to check the DAO treasury, veIDO funds wallets and be able to check it out whenever you want to. You can find the links on Discord’s #links channel. Click it and read all the numbers on Solscan. Don’t forget to visit the Discord server. Conclusion Lifinity brings a new breath to Defi. They have found a good solution using proactive market making to prevent price manipulation by bots. In addition, they have beautifully combined the concept of utility in NFT with Defi using Flare NFT. References: Lifinity Website Lifinity Medium Lifinity Litepaper Lifinity Twitter Whiteboard Crypto Disclaimer: Cryptocurrencies are speculative, complex, and carry significant risks. They are highly volatile and sensitive to secondary activities. Performance is unpredictable, and past performance is not a guarantee of future performance. Consider your own circumstances and seek your own advice before relying on this information. Also, you should verify the structure of any product or service (including legal status and relevant regulatory requirements) and consult the relevant regulators' websites before making any decision.

Lifinity 協議是一個去中心化交易所，旨在提高資本效率並減少無常損失。它透過實施某些策略來實現這一承諾，例如集中流動性、使用預言機進行主動做市以及實施再平衡機制。 Lifinity Exchange 是社群驅動的，目標是為用戶提供更有效率、更有效的加密貨幣交易方式。
首先，讓我們簡單地強調一些無聊的東西……可怕，對吧？別擔心，Lifinity 讓一切變得簡單 ☺
AMM（自動做市商）已成為 DeFi 領域的熱門基礎設施。現在你可能想知道 DeFi 是什麼。別擔心，這與傳統金融沒有什麼不同。 Defi或去中心化金融是指利用區塊鏈技術和加密貨幣創建更開放、透明且易於存取的金融體系的運動。 DeFi 旨在使人們能夠獲得金融服務，而無需銀行或信用卡公司等傳統中介機構，因為傳統中介機構可能速度緩慢、成本高昂且難以使用。相反，DeFi 使用智慧合約和去中心化網路來創建和執行金融合約，允許人們直接借貸、交易和相互交易。 DeFi 有潛力徹底改變我們思考和使用金融服務的方式。但它也存在資金效率低、無常損失、費用高等限制。要了解 AMM 的工作原理，您可以觀看此影片。 Lifinity 團隊提出了一種解決方案，透過使用集中流動性、使用預言機的主動做市策略以及再平衡機制來解決這些問題。透過集中流動性，市場對於流動性提供者（LP）來說變得更加高效，對於交易者來說成本變得更低。使用預言機有助於減少無常損失，再平衡機制讓資金池餘額回歸到聯合曲線，同時也能產生利潤。看起來很複雜？ ...如果是，請不要放棄並繼續閱讀，直到我在下面給您一個簡單的例子。我知道理解無常損失背後的機制並不容易。您可以觀看此影片並了解 IL 與套利的關係。這是使用蘋果和馬鈴薯的一個很好的類比，這就是為什麼我將在這裡重複上一個影片中的相同範例。想像一下，我們有一家雜貨店（DEX），出售蘋果和馬鈴薯（我們池中的代幣對）。當某人購買或出售過多的一種商品時，餘額就會發生變化，商品的價格也會隨之改變。 請記住下一章的雜貨店範例。看？簡單易行☺
主動做市
主動做市是去中心化金融協議中使用的一種技術，可最大限度地降低無常損失的風險，當流動性集中在單一池中時可能會發生這種情況。
該技術涉及使用預言機不斷為池中交易的資產提供更新的價格，從而允許協議主動調整池中資產的價格，並避免可能被套利者利用的陳舊價格。你還記得我們在雜貨店的例子嗎？現在，套利者是一個從我們商店購買蘋果，然後以更高價格出售到其他地方以獲取利潤的人。在這個例子中，預言機的功能就像一個大市場大廳裡的廣告牌，我們可以在其中讀取市場上交易的所有價格。由於我們知道其他地方的蘋果價格，我們可以調整雜貨店的價格，這樣套利者就無法獲得有利可圖的交易。這有助於保護流動性提供者免受無常損失，當池中資產的價格偏離流動性最初存入的價格時，就會發生這種損失。使用預言機（例如 Solana 區塊鏈上的 Pyth Network）也使得搶先交易難以發生，因為預言機在每個時段（大約每 0.5 秒）提供價格更新。
再平衡機制
該協議中的再平衡機制旨在透過調整池的流動性來最小化無常損失的風險並最大化利潤。這種調整發生在每次交易和/或資產 x 價格的變化時，由預言機決定。如果x佔池化資產總價值的50%以下，做市商將減少x買家的流動性並增加x賣家的流動性，以恢復平衡並激勵交易者賣出池子，同時阻止他們從購買。這有助於確保資金池餘額回歸到聯合曲線。再平衡機制還允許流動性的集中程度超出其他集中流動性協議的典型水平，因為這使得價格更難跌出所需範圍。
再平衡場景
讓我們考慮一下實踐中可能發生的情況。只有當使用者與礦池進行交易或預言機價格變更時，礦池餘額才會改變。兩者的結合可以為流動性提供者帶來利潤或損失。以下是四種可能的情況以及協議如何處理它們：
當 x 佔池的 50% 以上時，x 的價格就會上漲
當 x 的比例低於池的 50% 時，x 的價格會下降
當 x 的比例低於池的 50% 時，x 的價格就會上漲
當 x 佔池的 50% 以上時，x 的價格會下降
情境 1 和 2 有利於流動性提供者，因為它們可以產生利潤或扭轉恆定產品做市商可能產生的無常損失。再平衡機制有效地在價格下跌時買入逢低買入，並在價格上漲時獲利了結。
這些是最有可能發生的情況，因為預言機價格往往比其他去中心化交易所 (DEX) 的價格變動更快，而且套利者無法透過我們的池進行交易來獲利。相反，3 和 4 是對流動性提供者不利的場景。由於預言機價格通常領先其他去中心化交易所，因此這種情況發生的可能性較小。然而，如果這種情況確實發生，協議將調整其流動性，以最大限度地減少進一步的無常損失。
一些古怪的東西…
Lifinity 上每個池的基本交易費用由團隊決定，以實現利潤最大化。由於其他 DEX 的流動性變化，該費用可能會經常變化。此外，Lifinity 還根據市場波動性調整基本交易費用，以優化價差並防止搶先交易。在 DeFi 中，點差是資產的買入價和賣出價之間的差額，是資產流動性和市場深度的衡量標準。搶先交易是一種交易策略，交易者利用對交易或訂單的預先了解來從中獲利。例如，如果交易者能夠通過訪問去中心化交易所的訂單簿或匹配引擎來查看交易或訂單的詳細信息，或者如果他們能夠通過他們的訪問區塊鏈本身。搶先交易可以被視為一種市場操縱形式，因為它允許交易者以犧牲其他市場參與者的利益為代價來獲利，並可能破壞 DeFi 市場的公平性和透明度。目前，這種波動性是使用鏈下機器人來監控的，但團隊計劃最終在區塊鏈上實現此功能。
目前，流動性提供者收取 85% 的交易費用，其餘 15% 保留作為協議費用。未來，Lifinity 計劃為每個池設定目標流動性水平，並相應調整交易費用的分配，以優化流動性。
有人說代幣經濟學創新嗎？
與許多 DeFi 協議一樣，Lifinity 也有自己的代幣。 LFNTY 是 Lifinity 協議的治理代幣。它可用於增加或減少 Lifinity 平台的曝光度。 VeLFNTY 是另一個允許用戶擁有投票權並獲得協議收入的代幣。它是透過鎖定LFNTY一定時間來獲得的，並且不能在標準錢包中轉移或顯示。它有兩種狀態：鎖定和解鎖。 XFNTY 是 4 年鎖定 veLFNTY 的代幣化版本，是標準 SPL 代幣。它可以以 1:1 的匯率與 4 年鎖定的 veLFNTY 自由轉換，但必須轉換回 veLFNTY 才能開始接收協議收入。 Lifinity 的代幣經濟學創新包括一個協議，該協議可以持續獲取 DEX 上所有可用代幣對的流動性。有一個改進的 veToken 模型，具有衰減、線性解鎖、本機代幣化選項，以及允許協議賄賂 veLFNTY 持有者以廉價地確保永久流動性的系統。此外，LP 收到的費用份額會動態調整，以達到最佳的流動性水平，而代幣是使用 veIDO 發行的。
呃-哦…現在 MMaaS 和 Laas 兄弟是誰？
」準備迎接麻煩吧！並使其翻倍！保護Defi免受破壞！團結我們國家內部的所有流動性！譴責搶先交易機器人和價差的罪惡！將我們的觸角延伸到天上的星星！ MMaaS！拉斯！ Lifinty 團隊以光速起飛！要么立即投降，要么準備戰鬥！
喵！這是正確的！ 」
（取自《神奇寶貝》臭名昭著的火箭隊座右銘，並經過粗暴修改。）
Lifinity 為尋求提高代幣流動性的協議提供兩項服務：做市即服務 (MMaaS) 和流動性即服務 (LaaS)。這些服務需要為 Lifinity 為協議代幣的做市商設定自訂預言機。在 MMaaS 中，協議提供 Lifinity 做市的資產，Lifinity 保留交易費用，而協議則保留任何做市利潤。在 LaaS 中，Lifinity 提供用於做市的資產，並承擔價格風險，以換取協議根據產生的交易量選擇資產的形式的補償。
討論完上面的所有技術問題後，讓我們深入討論其他很酷的事情。好吧，也許其中一些不太酷，但是，是的，你會喜歡的。
那麼……什麼是 Flare NFT？
Lifinity 於 2021 年 12 月 27 日出售了 10,000 個名為 Flares 的動畫非同質代幣 (NFT)。交易費和特許權使用費所產生的所有收入均用於回購和再投資。如果 Flares 的價格低於鑄幣價格的 50%，將使用集合資金進行回購。此外，Lifinity LFNTY 代幣總供應量的 1% 保留給 Flare 持有者。
特徵
讓我們探索一下該應用程式並討論它的一些功能：
儀表板：在這裡您可以看到 Lifinity 的一般指標（數量、費用等）。此外，您還可以查看累積數量和累積費用。此外，您還可以查看鎖定代幣的流通量和分配期限。給您的一個技巧：您可以在圖表上導航遊標以查看您想要的特定日期的指標。如果這都不酷的話，我不知道什麼才是了！交換：您可以在任何您想要的列出的代幣之間進行交換。只需連接您的錢包即可兌換！ Lifinity 將向您展示在各種協議（例如 ORCA）上進行交易的最佳路線，而無需訪問它們。選擇它，你就可以開始了。池子：有多種池子可以賺取獎勵...您可以點擊統計數據並查看每對的統計數據。
NFT：您可以點擊 NFT 選項卡，它會將您重新導向到 Flare 頁面，然後砰！您可以質押/鎖定您的 Flare NFT 並賺取 LFNTY 代幣。 IDO：在這裡您只需點擊一下即可加入 IDO。
獎勵：根據您的操作，您可以看到您的質押獎勵。
更重要的是？
團隊積極關心社區。您可以在 Twitter、Discord 和 Medium 上關注他們。他們積極組織 AMA，並經常與社區聚會。他們願意接受任何建議和意見。您還可以收聽他們的播客，他們在其中談論各種主題。
獎勵：自2022年12月24日起，他們宣布獎勵將以USDC形式發放。那是毒品！您不會受到任何價格波動的影響。 Discord：Discord 伺服器的一個很酷的部分是它們有一個非常詳細的頁面，其中包含有關該專案的每個有用連結。例如，您想閱讀簡報嗎？砰!在那。你想買 Flare NFT 嗎？砰!您可以去您最喜歡的市場找到它。此外，能夠檢查 DAO 金庫、veIDO 資金錢包並且能夠隨時查看也很重要。您可以在 Discord 的#links頻道上找到這些連結。點擊它並讀取 Solscan 上的所有數字。不要忘記造訪 Discord 伺服器。
結論
Lifinity 為 Defi 帶來了新的氣息。他們找到了一個很好的解決方案，利用主動做市來防止機器人操縱價格。此外，他們利用 Flare NFT 將 NFT 中的實用概念與 Defi 完美結合。
參考：
Lifinity 網站
生命力介質
Lifinity 輕紙
Lifinity 推特
白板加密
免責聲明：加密貨幣具有投機性、複雜性，並帶有重大風險。它們非常不穩定並且對次要活動敏感。績效是不可預測的，過去的績效並不能保證未來的績效。在依賴此資訊之前，請考慮您自己的情況並尋求自己的建議。此外，您在做出任何決定之前，應核實任何產品或服務的結構（包括法律地位和相關監管要求）並查閱相關監管機構的網站。

創作者的更多內容

實時新聞