AMM's Capital Efficiency, Wintermute's trades

Plus Odds and Ends and Thoughts and Prognostications

Feb 16, 2021

Happy President’s Day to my American readers! Just tweets, charts and links this week.

Hype News: Omen, a decentralized prediction markets platform governed by DXdao*, launched on xDai last week along with scalar market functionality. Lots of fun markets. Check it out.

Chart of the Week: AMM’s Capital Efficiency

Token Terminal’s Liquidity turnover ratio (LTR) today for the top Automated Market Makers (AMMs). LTR is volume divided by total deposits, so it’s perhaps the best comparison of the capital efficiency of AMMs. Uniswap is the leader here because it drives the most volume to its pools across a long-tail of assets, and unlike the others, Uniswap LPs are only there for the fees generated from trade volume. Other AMMs are subsidizing deposits through incentivized pools. Over the last month, Sushiswap has been about ~80% of Uniswap’s TVL, but about ~50% of its trade volume. Further explanation in Terminal’s biweekly newsletter.

Tweet of the Week: Wintermute’s Trades

Igor Igamberdiev @FrankResearcher

1/9 One of the largest crypto market makers is Wintermute (@wintermute_t). They are currently #1 on Bitfinex based on current month volume, also very active on FTX, and responsible for 40% of dYdX volume in 2020. Let’s see what we can find out from their Ethereum addresses.👇

The Block’s Igor Igamberdiev runs through the on-chain activity of major DeFi player, Wintermute. Wintermute bridges the CeFi/DeFi divide well and simultaneously wears the market maker and yield farmer hats. They are heavy into Tokenlon and also cross-chain assets (wrapped tokens plus renFIL). Check out the thread for more.

Odds and Ends:

MetaMask Is earning $100k a day in swap fees Link
Reflexer Labs, which aims to build a non-pegged stable currency, announces $4m round, led by Pantera & Lemniscab Link
Synthetix raises $12m from Paradigm, Coinbase Ventures, and IOSG Link
ETHDenver Hackathon winners Link
UMA launches KPI synthetics for itself and others Link
The Defiant: Tornado Cash rewards security focused power users Link
Spartan Group announes $50m DeFi fund Link
Three Arrows Capital and DeFiance Capital invest $5m in Balancer Link

Thoughts and Prognostications

Musings on composability, centralization and sharding/rollups [Eric Wall/Arcane Assets]
NFTs make the internet ownable [Jesse Walden/Variant]
The Economic Theory of Liquidators [Gabe Pohl-Zaretsky/Gauntlet Finance]
Exploit on Alpha Homora V2 post mortem [Tascha Punyaneramitdee/Alpha Homora]
Triumph of the HODLers [Noah Smith/noahopinion]
Rundown of solutions to Paradigm CTF, an auditing/security-focused competition [CMICHEL]
A theory on Ethereum state size management [Vitalik]

That’s it! Feedback appreciated. Just hit reply. Written in Brooklyn; hope my southern brethren are managing the ice and cold. LOTS of fundraising announcements…

Dose of DeFi is written by Chris Powers. Opinions expressed are my own. I spend most of my time contributing to DXdao*. All content is for informational purposes and is not intended as investment advice.

Dose of DeFi