Thank you @Tjark
Appreciate your support.
Thank you @Tjark
Appreciate your support.
Snapshot vote - passed
@Kromatika can you provide a Telegram handle or other contact method so the Optimism team can get in touch about paying out this grant! Feel free to comment on this thread, DM, or email firstname.lastname@example.org
As the Kromatika developers are greasing their elbows and getting the work done to deliver various aspects of this grant, we have a few suggestions that we believe will benefit the larger Optimism community.
We would like to share these here and we invite your feedback/suggestions.
1/ Liquidity Mining Program
We saw Uniswap use liquidity protocols such as DefiEdge, 0xPlasma, Gamma, Arrakis etc and we think this is the best way to use provide optimized liquidity mining incentives to the Optimism community as opposed to our first thought of doing it in-house.
Our first two choices for liquidity mining distribution are DefiEdge and 0xPlasma. They provide a very efficient and optimized service and we cannot better that service if we decide to do it in-house simply because Kromatika specializes in providing innovative DEX services and not liquidity mining per se.
These liquidity mining protocols have a good track record and we feel it is wise to utilize their expertise because they specialize in it.
The result → More new users will be attracted to actively engage on the Optimism network.
We have been in talks and ready to deploy once we get your stamp of approval.
2/ Gas Refund
So the initial idea was to maintain an $OP gas tank (smart contract that will refund for gas money). From there, the $OP will be transferred to the ones who pay for the txn (biconomy validators).
This means there are two separate gas tanks - one that holds $OP and the other which is the Biconomy gas tank (which will hold $ETH). Kromatika would initially fund the biconomy tank with ETH, and then transfer OP to the validator as they begin to cover gas charges.
After that initial funding by Kromatika in ETH, then the validators will have to top up the Biconomy gas tank with ETH as and when they receive OP from Kromatika.
As we worked out this model, it feels inefficient and lengthy in terms of time and resources spent because OP is not the gas payment token for Optimism network (unfortunately).
Here is a suggestion:
Usage of Kromatika’s limit orders aka FELO(fees earning limit orders). These limit orders are actually concentrated liquidity positions on Uniswap V3 pool at the desired tick range.
Using FELO for OP/ETH, we add liquidity to the pool in exchange for ETH. This ETH can then directly fund the biconomy gas tanks which the validators can then use to cover the users tx costs on swap.
We feel this will be an efficient means of delivering the gas refunds. There is no direct selling, since using FELO (Kromatika’s flagship limit orders) means $OP liquidity is being added to the Uniswap v3 pool at a specific tick range. This can be carried out on a periodic basis based on the delegates recommendation.
We would like to hear feedback on this topic please. We are also open to hosting an AMA with the delegates to answer any questions on how this will benefit the Optimism community.
We are open to hear your recommendations and very eager to push the products out asap.
Apologies for the incovenience.
Was editing and deleted this post.
Re-posted it : [Ready] [GF: Phase 1 Proposal Cycle 6] Kromatika - #58 by Kromatika
Hi @Kromatika , appreciate the update.
I don’t have a particular view on the first piece, but the second is effectively selling the OP for ETH and is in my view a nonstarter.
updated my view somewhat on the first. defi edge doesn’t have a particular strategy that’s employed, so i’m not sure how you’ve come to the conclusion that it’s the most efficient provider of this service. rather, defi edge offers a range of strategies managed by individuals external to defi edge.
0xplasma functions similarly but the only strategy i see there with over 6 figures of tvl is a usdc-usdt pool.
so how have you arrived at the conclusion that these are better approaches than univ3staker?
and supposing you do go this route, how would you vet managers? and how could you prove that the manager isn’t someone affiliated with you, who could simply exit the OP through active v3 management?
Congratulations!!! Welcome to the Optimism Family! ! !
It’s really great to see active members like you in this community who are trying out protocols and working to make OP ecosystem better. DefiEdge is a asset management protocol built on top of Uniswap V3 that is decentralised, permissionless and non custodial, anyone can create and add funds in any strategy. As you correctly noticed there are several users that are managing their positions on DefiEdge, and there are even more managing it privately, there are also our in house strategies that we manage as we have our team of quants that create and manage the best ranges for protocols. Also our protocol is audited 6 times, and even includes in built farming contracts to incentivise strategies
I need to be clear on this – are you a representative of DefiEdge or Kromatika?
If the latter, I think the fact that you’d be using this as a platform to exercise your own strategies is problematic and opens the possibility for the kind of abuse even 100 audits wouldn’t pick up on, unless the kind of strategy you’d be describing is programmatic and open source, which would inherently be inefficient and self-defeating as an LP strategy, going back to the question of why you would use this solution and not something like Arrakis.
If DeFi Edge, i think there’s an opportunity here, but i think we need to see exactly what Kromatika intends to pursue as a strategy and a more complete explanation for why they choose this route.
@DangerExploit is from Defi Edge and is perhaps the best person to break down on why we chose Defi Edge over Arrakis.
do you intend to use defi edge’s proprietary liq management solutions or are you going to be using an outside manager? and how would the community be able to track which is being used?
and does kromatika or its principals have any existing relationship, financial or otherwise, with defi edge or 0xPlasma? It remains strange to me that you are choosing two solutions with little testing and whose primary differentiation (which is legitimate!) is that they platform anon managers
We have interviewed Arrakis, Gamma, xToken Terminal, Defi Edge, 0xPlasma. We did it because we saw Uniswap utilize their services. And out of all these platforms, we were impressed with the tech of Defi Edge and 0xPlasma the most.
Defi Edge have their own team to manage the strategy (where upto 20ranges can be created as opposed to one range in Arrakis), rebalance the pool which minimizes slippage and the APY is impressive.
Same with 0xPlasma’s product called Quadrat. The trading strategy here is automated if I am not mistaken.
Both of these protocols are non-custodial. Also, there is a 33% reduction/savings of gas fees. DefiEdge does not charge a management fee, whereas 0xPlasma has a management fee which will be discounted for Kromatika.
A lot more eyeballs will be exposed to the KROM-OP pool, which in turn will increase TVL. There will be cross marketing campaigns carried out during this period to push the word out.
Update: Just finished a call with Velodrome and considering to add them as a third liquidity mining protocol. So the 30k OP might be split between 3 platforms - 0xPlasma, Defi Edge, Velodrome (potentially).
Kromatika intends to integrate the Defi Edge and 0xPlasma offerings within Kromatika dApp/website. The community will be able to choose from either protocol.
Did you have such questions for Uniswap? Why did they choose DefiEdge?
Your tone seems to be condescending. My question is : why?
This is a wrong approach.
How did you come up with which Liquidity manager to choose from ?
Was there any governance proposal or voting taking place?
If not, who makes the decision? You mentioned that those liquidity managers were being used for Uniswap liquidity mining as well, but you forgot to mention that in that case the Uniswap community have made the final decision based on their governance proposal process, not Uniswap team, foundation or few individuals.
In your case, I can suggest to do your own governance proposal for your community choosing a LM (same as Uniswap) rather than making a biased decision within few.
This can also prevent behind-the-curtain agreements on which LM to choose. I see you already added Veldrome, probably because a Velodrome team representative jumped and argued (with all rights to do so) why you have chosen others (and maybe not velodrome).
I’ve made abundantly clear to the team that whether they choose to work with Velodrome has no bearing on the status of their grant (already granted) or any future grants.
My questions have been around why they have chosen 0xplasma and defi edge rather than other Uni v3 liquidity management solutions.
After discussing with @lavande , Kromatika intends to submit a new proposal as outlined in https://gov.optimism.io/t/code-of-conduct/5751:
Mandatory (Violation 7): Must execute the grant in accordance with what is outlined in the approved grant proposal. Grant recipients that wish to change the use of the grant from what is outlined in the proposal must submit a new proposal requesting approval for the change. To do so, they must follow the grants process in place at the time. If the change is not approved, the recipient must execute the grant as outlined in the original proposal or return the portion of grant funding affected by the unapproved change.
We will submit a new proposal with the intended amendments for the next Cycle which I presume happens in June. The other part of the grant will be executed in the meanwhile.
The main idea behind this proposal is exclusively technical, to overcome the technical constraints imposed by the implementation, while providing the same benefit and feature for the community - liquidity mining.
What I request is for @jackanorak and other delegates to pen down your questions/concerns regarding liquidity mining in response to this post and we will get them answered.
Tagging a few delegates here: @OPUser @GFXlabs @Bogna @linda @katie