Since implementing phase 1.1 of the SLIR proposal we have been getting questions from the community about the rationale of pursuing the Balancer pool and what it means for the project as a whole. After gathering some data in the past few weeks we wanted to use this post to explain the finer points of our economic policy at the Strudel protocol.
Strudel Macro View: Reduce the Float!
One of the issues we found when we took over the project in February was that the Strudel Token (TRDL) had a lot of floating supply, meaning that there were a lot more tokens in wallets than in the liquidity pools or staking contracts. Having a high float causes a lot of selling pressure and volatility which can be detrimental to a project’s growth.
To address this we took a three-pronged approach. First, we built the gTRDL staking contract, which pays interest to users who deposit their TRDL to be able to participate in governance activities. The second intervention consisted of creating more cross-chain opportunities, which incentivized users to take TRDL off mainnet. We are on our third week of incentives at Cometh.io in Polygon and are looking to expand that program and other opportunities. Finally, we created the Mare Imbrium Fund, which allows users to deposit their TRDL single-sided and bring demand to the rest of the protocol’s tokens.
With the measures described, we have managed to drastically reduce the floating supply. Currently, nearly 50% of the supply is either in a long-term staking setup on gTRDL or collateralized by liquidity in our different programs (see picture below). We hope that over time the % will increase to a greater steady-state. We are still offering gas refunds for those who wish to add liquidity to the Mare fund. DM an admin with your “Execute” transaction id numbers.
The Mare Imbrium Fund
One of the key pieces of our current protocol setup is the Mare Imbrium Balancer pool. This pool has quickly gained TVL to become one of the most liquid pools on the protocol. Furthermore, the swap fees from the arbitrage within this pool are bringing a significant amount of revenue for the liquidity providers. With the current volume within the pool, there is an estimated yearly revenue of 150,000$ on swap fees which will increase as this pool becomes more liquid and harbors an increased amount of arbitrage transactions.
Mare Imbrium Fund Stats
Coming soon: A complete Mare Imbrium FAQ article. Please DM us any questions you may have (or ask in the chat) and we will add to it.
Since the implementation of the Mare Fund, we have managed to create a liquid market for Strudel Bitcoin Cash (vBCH). We have managed to bridge 84 BCH so far to Ethereum Mainnet which are currently trading at a slight premium. The liquidity has also been extended to Uniswap V3 where the positions are currently trading within range. This serves as a preview of what we expect to see once the liquidity is able to support a fully-pegged vBTC. The continued success of the vBCH implementation will also increase the demand for the other assets within the pool, further strengthening our market.
Our next goal is to generate more revenue for the protocol. By bridging assets into Mainnet we are adding value to the ETH ecosystem. We are now going to leverage that value to distribute it to our token holders. More details on this topic will be available on the next $TRDl update.
We would like to thank our community for their continued support. In the near future, we plan to begin marketing our technology to a larger audience. We have started work on a new campaign to help grow our community and will be attending the Bitcoin conference in Miami. Stay tuned for more information and content over the next few days!