Most DEFI platforms incentivize user for locking their assets. Most DEFI protocols allow users to borrow against their collateral, however borrowing APY can be very high and if a user lends a stable coin versus a variable asset, he’s at risk of liquidation risk, so he has to constantly check the health factor. This concept encourages users to lock their assets and discourages micro transactions.
Fluidity aims to solve this problem by allowing users to convert their assets to their “fluid” counterpart. Fluidity protocol automatically invests the native assets in DEFI apps like Compound or Solend. Assets can also be used in in yield generating strategies. When a fluid asset is converted back to the native asset, the latter is removed from the defi protocols.
To encourage transactions, fluidity distributes the rewards when a user uses fluid assets. A random factor in calculating the reward is added to incentivize users while protection mechanisms are in place to prevent transaction spamming.
Project outlook
The basic concept is good, however it might be too abstract for the average user. We can see the layers of smart contract risks is piling up since fluidity uses other protocols for yield generation. There’s also a risk of loss in defi investing strategies which might depeg the ratio of 1:1 of fluid assets. A full review of how the native assets are lent out should be done if you plan to convert a sizeable amount. You can review the full documentation.
The project is audited and for now, there’s still a lot of centralization. The centralization is mostly at the level of the defi protocol configuration, large rewards are reviewed before distribution. So the project is still very dependent on the team. This helps to stabilize the project as it moves towards decentralization.
Airdrop potential
The governance token of fluidity FLY is already issued. It is mostly used as a governance token, but it is planned to be used as a utility token. For now it can be staked and used in vaults. The FLY token was dropped in 2 “waves” and a 3rd “wave” is currently ongoing.
You can earn “loot bottles” convertible to FLY token for the next 74 days by staking FLY and you can earn a multiplier by transacting FLY and FUSDC on selected platforms like jumper.exchange
You can check their airdrop campaign and don’t forget to do your own research before jumping on board.
Demex is a new generation decentralized exchange designed for trading complex financial instruments and derivatives across several blockchains. Anyone can be a market maker by contributing liquidity and making money from trading fees. It offers a wide range of features including trading derivatives, lending or borrowing tokens, minting stablecoins and providing liquidity.
The fact that it is a decentralized exchange means there is not 3rd party involved and no custodial. Everything is managed by smart contracts and code.
Risks
While trading cryptocurrencies comes already with a lot of risk because of volatility, trading on a dex adds a smart contract malfunction of hack risk. If something happens no one is liable. So it’s very important to understand the risks and do your own research before using such technologies.
For example, when you supply your favorite coin to a lending pool, users have to deposit a collateral to be able to borrow it. Usually users have to provide more collateral than what they borrow, but they could do so with many different coins. Now let’s say one of the coins on the collateral side looses all its value (let’s say LUNA for example). For sure the lender prefers to get liquidated rather than paying back the loan and returning your favorite coin. So you are left with worthless coins.
As decentralized exchanges get more sophisticated they try to put some guards in place, however it’s still too early for these safety measures to be bulletproof.
That being said, let’s review how you can lend your assets using Nitron on Demex:
We will be using keplr wallet, which is a great wallet mostly for the COSMOS ecosystem.
The first step is to connect to demex and create your account. Once this is completed, you can click on “Nitron” and search for the coin you wish to lend:
Once you find your coin, click on “lend”. In this example we clicked on stTIA. If you don’t have stTIA on Demex, you will have to deposit some from your wallet. Click on “Deposit”
Transfering your tokens
On the next screen, you have to choose the network that has your coins and the balance you wish to transfer to Demex:
Once you choose the amount to transfer and click on Deposit, you will have to accept the transaction in your wallet. This will trigger and IBC transaction and you will have to pay for the transaction fee with the coin of your chain. In our example, the fees have to be paid using STRIDE coin. The IBC transaction will move the coins from their chain of origin (Stride) to the Demex chain (Carbon).
It is important to note that once your coins are transferred, you might not see them anymore in your wallet, unless your wallet supports displaying your assets that are on Demex/Carbon.
Complete the transaction
Once completed you go back to the previous step and you can see your coins available to lend:
You can choose how much to lend and whether you want all the amount to be available as collateral or not. This means the amount you wish to make available as collateral for future borrowing.
You will have to confirm the transactions in your wallet. Note that the transaction fee is paid in SWTH, which is the coin used for the Carbon chain.
Once completed, you can start borrowing against the collateral portion:
You can always increase or decrease the amount of the collateral later on:
Borrowing
To borrow some funds, find the coin you wish to borrow and click on borrow:
In this example, we are borrowing milkTia:
We can borrow up to 6.59 in this example, however that puts us at risk of liquidation. Always check your Health Factor and make sure it’s in a good position. You have to verify it daily and verify the interest rate as it can vary too. A spike in the interest rate can get you liquidated.
In this example, since the provided collateral and borrowed asset are all liquid TIA, we know that there won’t be a lot of price fluctuation. However if your supplied assets value go down while the borrowed asset goes up, you will need to rebalance.
Again, it’s not financial advice, you should do your extensive research before deciding to use these features.
Here’s the result of the borrowing transaction:
The Nitron dashboard is nicely done, we can see all the information easily:
We have our total asset, health factor, net APY and the “return” button very accessible.
The question now is why would we borrow milkTIA or stTIA if we already have some? This strategy applied at scale will increase our holdings and could help us farm the borrowed coin’s airdrop. It depends whether they consider the net balance or total balance for the airdrop. There are no guarantees.
We can also use the borrowed asset to lend it back, which will improve our health:
Don’t forget that by using Demex, you could be eligible for its future airdrop.
MerchantMoe is developed by the same team as TraderJoe, the popular dex on Avalanche. It has a similar UI and gives us many options between swapping, staking and farming:
It’s very straightforward to SWAP on the platform, here’s an example of swapping USDC to JOE, the utility token of traderJOE:
Don’t rely on the transaction fees that appear in metamask:
The fees were higher once completed. Almost 0.18 to Approve Spend and 0.18 to swap.
Moe also offers you the possibility of farming with many available pools.
There’s also a bridge to transfer your JOE tokens between the different chains (Arbitrum, Mantle, Avalanche and BNB). However it should be expensive to use.
You can check Butter, another leading platform on Mantle.
Butter.xyz is a new decentralized exchange built on the mantle network. It offers many defi features and is currently offering points and rewards for users (for a limited time). It has an interesting and interactive way of distributing rewards such as a fishing simulation.
Swapping on the platform is straightforward and besides earning points, you can earn a fishing attempt:
When you click on the fishing attempt, you get redirected to the animation where you can initiate the fishing attempt:
The first crate was empty but we got 1$MNT staked with the second attempt. The more swapping you do, the more fishing attempts you might obtain.
The catch is that you need at least 10 MNT to be able to unstake:
Fees
The fees of the platform are relatively low, however we noticed that the fees in the final transaction was much higher than what’s indicated in the dapp or in metamask.
Here’s an example, we swap from USDT to USDC, our balance is 15.39 MNT and we have 4 points. In all the screens and in metamask, it shows very low fees:
However after completion, we have 11 points and our balance is 15.15 MNT, so we used 0.24 MNT in fees. Even in metamask in the transaction history, the values are wrong.
In mantle explorer it takes a lot of time for the transaction to appear, so we used another explorer where we can see that the transaction fee was in fact 0.24 . So we just believe there’s a display error somewhere or that the transaction fee estimation is not working properly.
So keep this is mind while interacting with the mantle network.
Fluxbot is a new Telegram trading bot for the Solana ecosystem. It is a self custodial wallet.
The private key can be imported in another wallet. We successfully imported it to phantom wallet.
It uses Jupiter for DCA and other dex for swapping (Raydium, fluxbeam, etc…)
We can’t modfiy slippage for every transaction.
We can’t see a readable transaction history, we have to go to https://solscan.io/
FLUXB token usage:
The native token is not used for transaction fees, so there is no real demand for the token. However, holders of at least 1000 FLUXB token get “reflections”. In short, they get rewarded with a part of the fees generated by the platform. The more there are accounts above 1000, the less your balance becomes compared to the total number of FluxB pool so the less rewards you get. This will incentivize people to hold more tokens,
Reflections depend on the success of the platform, so marketing and adoption are a must. What distinguishes Fluxbot is the copy trader and sniper feature. However as more platforms start offering the same features for the Solana ecosystem, the fees will have to be lowered to stay competitive which will decrease the reflections as well.
What sets apart fluxb is the AI chatbot part. If the chatbot becomes more interactive and personal, users will become more attached to using it, so this is one path towards success.
We went on to test the AI assistant.
In the first example, we asked the assistant to convert 1$ worth of solana to fluxb token:
It replied insufficient balance although we have 1$ worth of solana in the balance. Probably it though we meant 1 SOLANA, so we rephrased it with the amount in solana:
This time it understood and prepared the right transaction. The next step is to test wether the AI bot remembers our discussion, so let’s ask him to buy FLYXB using PYTH, but let’s do it a bit vaguely to see the level of interaction:
We see that the bot assumed we wanted to buy pyth instead of fluxb, not buy pyth instead of fluxb. Our statement was vague and confusing and we expected the bot to ask which option it should choose. However we were a bit more specific:
We can see that the bot is following closely the conversion and was able to correct the transaction.
Overall, the assistant is satisfactory for a first version and some more improvements should be on the way.
We tried to take it a step further and ask the bot to modify the slippage on the fly:
But it still used the predefined slippage from the settings.
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