DOT LP and perpetuals on Levana

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OY! You LEVERAGE LOVIN' POLKADOTTIRS!

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@Levana_protocol has opened up their single-sided $DOT LPs (currently at 19% APR) and their LONG and SHORT $DOT perpetuals!

You must 🚨🚨🚨 FIRST CONVERT $axlDOT to $DOT (composable) with not insignificant slippage on @osmosiszone

After that, you will probably need to supply some liquidity to the $DOT-pool before you open leveraged positions, because @Levana_protocol is fully self-funded.

At 19% APR on the $DOT LP, I'm not complainin' about this 'parking lot' of liquidity, ya hear? 😎

After liquidity is available on the protocol, you can take long and short positions. I go 💯 bat crazy degen by taking a 10x LONG and a 10x SHORT position against $DOT. When one pops, I'll close it for profit, and I hope I degen my way to 50M $DOT on @Levana_protocol.

HIGH RISK!

The remaining $DOT ('composable') I supply to the $DOT LP on @Levana_protocol at 19% APR.

I'll BUIDL this $DOT bag with profits from the 10x perpetuals, and, hey, if the perpetuals liquidate, it's 100% my loss, but I finally get to do something with this liquidity, see? 

What Prism? How Prism? Why Prism?

Okay, but what in the world is a "Prism"? How does it work? and why should I care?

Good questions. Let's do a shallow dive into Prism then relate it to what I'm doing with LPs on @TeamKujira, shall we?

Narrator: SHALL we? 🙄

me: Yes, we shall.

Prism was this really neat idea that a protocol token, originally $LUNA, could be 'refracted'/split into two tokens of its principal ($pLUNA) and yield-bearing ($yLUNA) parts.

You could use those tokens individually, e.g.: swap them, stake them, or use them for various LPs.

Furthermore, you could 'bond' $LUNA to $cLUNA ('composite' $LUNA or a Prism-y LSD of $LUNA) and do the same kinds of things.

That means from one token, $LUNA, you had 4 tokens, $LUNA, $pLUNA, $yLUNA, and $cLUNA, all at varying price-points.

The arbitration opportunities, folks!

What arbitration opportunities? We'll get to that, but first, let's complete the Prism operations on tokens for (Turing) completeness.

Eheh. 😅

• The dual of bonding is 'redeeming' $cLUNA to $LUNA over 21 days.

• The dual of refracting is 'merging' $pLUNA and $yLUNA into $LUNA.

There were other features: the $PRISM token, staking, $AMP tokens to supercharge yielding protocols, a DEX to swap between any of the tokens (helpful if you didn't want to wait 21 days to burn $cLUNA to $LUNA), various kinds of LPs (PRISM-whatever, LUNA-whatever).

They were neat.

Arbitration Opportunities

But what could you do with all this?

It turns out: a lot.

If you refracted, say, 100 $LUNA to 34 $pLUNA and 58 $yLUNA today, then today, 100 $LUNA = 34 $pLUNA + 58 $yLUNA, and you would hope the TLVs of both sides were equal, as well.

Tomorrow, however, everything changes.

For the case of Prism, it turned out people valued the yield-tokens ($yLUNA) much more highly than the principal-tokens ($pLUNA), and the prices of both soon reflected that preference. People would swap all their $pLUNA to $yLUNA then stake the $yLUNA.

An unforeseen consequence that led to: when you merged your $pLUNA and $yLUNA back at some later time, the merge would be (very) inexact, you might merge 12 $yLUNA only for your $pLUNA and would get a different amount of $LUNA out of that merge.

Thus we have arbitration.

A specific arbitration tried was:

1. 100 $LUNA refracted to $yLUNA and $pLUNA
2. swap all $pLUNA to $yLUNA
3. wait (days, weeks, whatever)
4. swap $yLUNA back to 115 $LUNA

That was one of many, MANY arbitration-approaches. There was even a site that enumerated all variants.

Okay. Prism came, it was awesome for a time.

Why should we care now?

Let's do a simple substitution and resurrect Prism for Kujira.

• LP KUJI-ATOM :: $LUNA
• staked LP KUJI- ATOM :: $cLUNA
• KUJI :: $pLUNA
• ATOM :: $yLUNA

It's not an exact translation, but it fits and well, at that!

Not only does the LP KUJI-ATOM fit the Prism-model, but it also fits the KUJI/ATOM-THANG! ... 'Thang!' meaning KUJI/ATOM-ratio to EMA20 to make swap decisions.

What does this mean? We'll use the ratio to grow BOTH $KUJI AND $ATOM off EACH OTHER!

'KUJI/ATOM-ratio vs EMA20' to make swap decisions sounds complicated, but I have confidence in this approach because I've shown myself it works for ETH/BTC with continuous, slow, steady growth in both Bull and Bear markets over the past 120 days!

"But, o, el geophf! Will this approach work for KUJI-ATOM?"

Fair question.

Will it work for:

• MNTA/KUJI?
• STARS/MNTA?
• KUJI/LUNA?
• KUJI/axlUSDC?

Theoretically, the -THANG! should work for any pair, GIVEN that both tokens are viable tokens.

But I do say: "THEORETICALLY," m'kay?

And the 'THEORETICALLY' is these are altcoins, some with a LOT more variability than others. What's worrisome to me is:

• the price-drop of $ATOM may attract liquidity to it, sinking that liquidity into a tar-pit, should $ATOM not recover.
• the newness of $MNTA making it spiky.

So that's why I'm going with LP KUJI-ATOM first. It's the OG of @TeamKujira BOW, after all. Although risk is much higher because these altcoins are affected by $BTC price-swings, that may (possibly?) be advantageous, ... or disastrous.

I'll run this experiment and find out.

At any rate, PRISM LIVES! ... or my version of it, anyway, on the @TeamKujira blockchain.

We are at day 0. I'll keep you apprised daily of this approach.

Timeline:

• day 0, today: we start with a fresh wallet addy.
• days 1-20: record and report $KUJI and $ATOM prices and amounts
• day 21: first EMA20 swap and buy call.

I'll see you then.

Tour: Levana

Hey, ho, all! It's a lovely 55°F / 13°C here in September-y VIRGINIA! 😤

A catch-all buy-order hit on @TeamKujira FIN for $OSMO on a down-spike!

I COULD take 10% profit on @osmosiszone (not @Shade_Protocol, as the swap is unfavorable), ... 

Or, I COULD trade it for $ATOM at a ratio of 16 $OSMO per $ATOM, at these prices that's [computes]: $5.54-per-ATOM.

A fine price, but look at the history.

I would buy 1.6 $ATOM, ...

... then wait 3 centuries to buy the remaining 8.5 $ATOM.

Ugh. 

I mean, ... it is a play? 

Or, I COULD lease an asset, say $wBTC, on @NolusProtocol, with $OSMO.

But that assumes:

• $OSMO retains its value or goes up in price or
• $wBTC goes down in value.

I'm not willing to take either bet at present, ... because I'm not stupid.

Narrator: You're not?

me: 😤

... and I could be totally wrong on this "Don't lease $BTC with $OSMO"-call. It could be that I want $OSMO to go down and $BTC to go up on a lease-play, idk.

I'm just too new to this leasing-thing. I'm not (yet) willing to explore plays other than $USDC collateral.

At any rate, I have $55-worth of $OSMO from a 50 $USK catch-all, which is even better, as axlUSDC/USK is now > 1. YUS!

So, let's short $OSMO on @Levana_protocol.

A tour.

I bridge my claimed $OSMO to @osmosiszone (where @Levana_protocol) then set the short at 3x.

Straight-away, the transaction fails to commit.

@Levana_protocol is an interesting take on perpetuals. You long- or short- positions using the same token as collateral! 😱 Now, this isn't new for perpetuals, but it's new for me.

But there's another interesting twist here.

The twist is this: most perpetual exchanges ('PEX'???) have insurance to cover their positions. @Levana_protocol doesn't need it. Why?

You're required to select a 'take profit' value, that comes set in ranges that @Levana_protocol can cover with EXISTING FUNDING!

So, after I 'jiggle' the 'Take Profit'-slider, I get a green value there and the transaction completes.

I don't like that. @Levana_protocol should adjust that automatically to a safe-zone, particularly for first-timers, comme moiself. Failing a transaction is bad Juju. #BadJuju 

Here's another thing I don't like. On the dashboard, I can't see the vitals my positions at a glance, they're hidden by a slider, or I have to click-thru.

"NBD," sez you.

Sez I: Oh? When the market skies or tanks, you don't have time to click-thru every one of your positions.

Here's the third thing I don't like:

The SECOND I placed my $OSMO 3x short, the price feed went absolutely haywire, slamming up the price to 46¢-per THREE TIMES IN A ROW!

This is WAY above liquidation price. What? I set a short, and I can be insta-liquidated by the price feed?

Now, if I believed $OSMO retains value well, I would set up a δneutral position by placing $OSMO into the stability pool on the 'Earn'-page, funding the protocol as well.

BTW, confusingly: "OSMO / USD" IS NOT an LP pair! It's a single-stake $OSMO-only pool of liquidity.

However, I believe the opposite. I have seen $OSMO lose a tremendous amount of value over the past two years, and all I hear is talk-talk, and all I see is 📉.

For now, anyway.

I'm shorting $OSMO like a fomo mofo. If price spikes, I lose $50. If it stays flat, I make fees.

But what happens as the price of $OSMO (continues to fall)?

Here's what @Levana_protocol does: as the price falls, THEY ADJUST THE COLLATERAL UP TO COMPENSATE! 😱

On a 3x-short, I profit 3¢-per each 1¢ $OSMO's price falls.

My SPREADSHEETSZORXEN tells me 31¢-per is a 10% gain.

So, do I cash-out at 31¢-per $OSMO?

That's one option, ...

geddit? 'option'? on a perpetual? GEDDIT?

Narrator: we get it, okay? 🙄

Another, ... [dare I say?] ... option, is to keep the short, continue to collect fees, and ride that gravy train to, in this case, 17¢-per.

So, this is my introduction to @Levana_protocol to myself. After I get the feel of this short, I'll explore how to set up an, e.g.: $BTC or $ETH δneutral position on this protocol.

k, fam, 143 means 'I love you!'

Nolus: leasing assets

Okay, I reached back to the @NolusProtocol-team, and they reached back to me, so I understand leasing a bit better.

Or I think I understand leasing a bit better, and it's all about the confidence with which one holds onto one's beliefs, isn't it?

ANYWAY, I made some money.

HOW did I make money?

I THINK it's all beginner's luck, but we'll walk through what I did, and I'll let you decide that.

So: leases.

You lease some asset. In my case, it's $OSMO.

The collateral for the lease is locked AS WELL AS the leased asset. @NolusProtocol puts that in a long position FOR YOU. You lease it. You don't get to determine the course of the asset: they do.

That gives me a problem: how to close the lease?

With a standard long position, in a market upturn, you close the long, the collateral pays for the asset, and you get to keep the rest.

This is not how @NolusProtocol does business, fam.

(pictured: $BTC long on @GMX_IO) 

Given this @NolusProtocol-style to repay the least, this means I need to send some more liquidity to @NolusProtocol.

Yes, sir. Yes, sir. Three bags full. 

I send $axlUSDC from @TeamKujira to @axelarcore, then pull that into @NolusProtocol. 

It shows up on the dashboard.

Great! Let's close out this $OSMO-lease.

I go to the lease-tab. I say 'repay' ... it defaults to $OSMO, but @NolusProtocol told me I can switch assets in the drop-down. I do that, and repay with $axlUSDC.

When I repay, I repay for ALL THE $OSMO LEASED ($100-worth).

There is, however, one more step I need to take in order to claim the unleased $OSMO. That is to say, just because the $OSMO is now unleased, it's not yet in my wallet. I need to claim it, so I do.

WHEN I do, it shows up as mine on the @NolusProtocol dashboard.

Swapped (back) 233.1 $OSMO for 110.62533 $axlUSDC

ROI: 10.63% APR: 3878.25% (1 day)

Not bad. Not bad at all.

But how to we turn 'lucky' into 'consistent'?

That is a post for another 🧵

CØSMOS interchain, ... or not.

A tale of 3 DEXen on CØSMOS interchain.

I want to swap $axlUSDC on @TeamKujira to $ATOM on @cosmos. Is that too much to ask?

Apparently it is.

Let's look at three DEXen: how they don't fill this simple request.

THIS IS CØSMOS _INTER_CHAIN and we can't even swap between zones.

1. @tfm_com.

A small problem, or two:

1. TFM doesn't recognize $axlUSDC on @TeamKujira.
2. So, I use $USK? NUPE! TFM doesn't swap $USK to $ATOM, neither to @cosmos nor to @osmosiszone.

So, ... not so small problems. Not small at all. 

2. @Manta_DAO

Neat! These guys block me. For reasons I do not know.

Let's talk about there interchain swap.

It doesn't exist.

Let's talk about their swap.

It's ... 'better' than swapping directly on @TeamKujira FIN, ... for neophytes, but is it the best swap?

NUPE!

Let's look more closely at the @Manta_DAO swap.

It's straight-up axlUSDC/ATOM, so, if you went to @TeamKujira FIN and did this manually, you'd get the same result?

NUPE!

They charge you a percentage for doing the swap for you, in this case: 0.02 $ATOM.

Now, you may counter-argue: "But, geophf! I stake $MNTA! I get fees back in staking yields!"

No, you don't. You get 5% back, and NOT 5% of the fees, that's 5% for 100% of ALL $MNTA stakers.

You don't stake 100% of all the $MNTA in the world, do you?

No, the protocol owners do.

But, realistically, how much money do you make?

The only money I've ever made staking, so far, is on @harmonyprotocol, staking $ONE.

I did stake A LOT of $ONE. 😅

And that's what you need to do: you need to be another @SumoKuji, THEN you make money on OTHER PEOPLE's SWAPS.

So, @Manta_DAO has fees that make it subpar to FIN, but then, it's not even the best swap, not by a long shot.

@TeamKujira FIN is fundamentally better, every single limit order, but then:

3. @osmosiszone is best, beating out both FIN and Manta.

But @osmosiszone is a DEX, it's not interchain, it's ... pseudo-interchain. It's quasi-interchain.

It takes 4 transfers, onto and off of @osmosiszone to $ATOM-ify $axlUSDC from @TeamKujira, as this tweet-in-🧵demonstrates. 

How, utterly, tiresome!

Conclusion: a call.

Now, looking at this 🧵, you may think I have a beef with one or all of these DEXen.

I don't. Each one provides a service/fills a need in the community in their respective ways.

I do have a request to CØSMOS BUIDL'rs.

Really? This is what one must do to swap between zones?

Until moving and trading liquidity is SEAMLESS, TRANSPARENT, and AUTOMATIC, that is: as easy as making a credit card purchase, then adoption will NOT go mainstream, but will continue to remain fringe.

Fringe: that 1% of us weirdos, nerds, geeks, and (supa)freaks.

Think about it