Looking at the early outline of the Web3 asset management platform from Range Protcocl

"Range Protcocl is laying the early foundations for the development of a Web3 asset management platform"

In Uniswap v2's AMM model (such), there are usually a large number of transactions around the market price, which means that the AMM model fund pool is only effective if the liquidity is near the market price, although it can provide transactions Liquidity is (0, ∞), but low capital utilization is always a crux of the DEX sector.

! [641] (https://img-cdn.gateio.im/social/moments-40baef27dd-37957c0cd3-dd1a6f-62a40f)

The V3 launched by Uniswap in 2021 uses CLMM (concentrated liquidity) with a higher capital utilization rate and a three-level service fee model. The former allows liquidity providers (LP, Liquidity Provider) to decide on their own which price range to inject the provided assets into. The latter allows LP to fluctuate risk according to the currency price it provides, and LP can choose to charge different handling fees (the higher the risk, the higher the return, 0.05%, 0.30%, 1.00%).

The benefits of this design are self-evident, but the concentrated liquidity exacerbates uncompensated losses (especially when the market fluctuates and the price deviates). ** In order to meet this challenge, liquidity providers need to closely monitor the prices of the assets they provide, and take timely actions such as withdrawing liquidity and reallocating funds to new price ranges to mitigate the impact of impermanent losses. In this process, Gas consumption is generated. **

According to an earlier report by Topaz Blue and Bancor Protocol, about 49.5% of liquidity providers on Uniswap v3 have negative returns due to impermanent losses. From the perspective of the industry, the current actual situation is that the TVL of DeFi has fallen by more than 70% compared to the peak, and the overall increase in the market is insufficient. Income gained from "rising"), traders' desire to participate in DeFi is declining.

! [641] (https://img-cdn.gateio.im/social/moments-40baef27dd-ef055efc42-dd1a6f-62a40f)

DeFi TVL chart source: defillama

A New Narrative for DeFi Composability

As the industry develops in a more mature direction, traders are becoming more rational and speculative is becoming weaker. Of course, from the perspective of traders, the potential purpose of participating in DeFi mainly lies in two points, Holders increase the capital utilization rate of assets in hand, and obtain expected potential income from DeFi. In fact, the development of the DeFi field is becoming mature and short-term saturated. Relying on a single DeFi facility has difficult to meet the needs of most traders (becoming a Uniswap LP may still face losses).

Top protocols represented by Uniswap, AAVE, Maker DAO, Lido, Curve, etc. occupy the vast majority of market funds and liquidity, and it is meaningless to reinvent the wheel. However, the volume of the head ecology is too large, and it is difficult to carry out substantial innovation. On the bright side, DeFi is a highly composable facility. Based on these top protocols, it is expected to build a more directional and rich "Lego"** to release the potential of different components in different aspects , this may be a new narrative direction.

From the current point of view, on-chain options are an example of DeFi’s combined nature. For example, the underlying protocols of on-chain options such as Syntheix, OPYN, and Hegic can cast options and provide basic liquidity for structured products such as Ribbon Finance and Lyra. On-chain option trading may come from the support of multiple option component protocols. Another example is an automatic strategy protocol. For example, the early smart pool products YFI and YFII can be regarded as projects in this category. They are built on different underlying protocols and farm funds in different DeFi protocols. Profitable, but subject to limited passive strategies, the overall income of such early strategy pool products is not high and the development is sluggish. There are even some agreements whose income source is only the dividend of the fee rate.

The automatic strategy income sector is one of the most potential areas. It has full potential to solve the income problems faced by encrypted asset holders by leveraging the composability of different DeFi components. After several years of development, this field is also evolving towards a new paradigm. After the old protocols on this track continue to fall, Range Protocol, Arrakis Finance, Gamma, etc., which are characterized by liquidity management, have become representatives of this field project.

Among them, Range Protocol can not only provide passive strategies, but also the first protocol that can provide active strategies with higher α returns. Based on this, Range Protocol can provide more sustainable, stable, considerable and safe returns, which is It is also highlighting the value of Range Protocol. In the longer term, Range Protocol is also expected to promote encrypted asset targets and develop into the asset management field, which is also a blue ocean direction.

Advanced Range Protcocl

Range Protocol itself is a liquidity management platform. The first version of the protocol will be built on the v3 version (CLMM) of the leading spot DEX on different chains such as Uniswap, PancakeSwap, and QuickSwap. The Range Protocol protocol can be based on its own liquidity management strategy, including active strategy, passive strategy, etc., in the DEX based on LP behavior to arbitrate income, helping investors obtain considerable returns. At present, the latest version of Range Protocol is mainly built on Uniswap v3, and will open the services of v3 DEX of other chains after several subsequent iterations.

The Range Protocol team mainly includes senior financial practitioners (including senior asset management managers), and Web3 developers, etc. The team has 20 billion US dollars in OTC senior transactions and 200+ project senior market-making experience, Range Protocol Always work closely with a group of private market makers and senior trading partners to help them conduct more research on feasible strategies.

Range Protocol covers the best passive management strategies currently on the market, including a series of Vault passive strategies. At present, most liquidity management projects fall into this category, which is based on "Fee APY" as a measurement indicator, and does not consider changes in the number of currency standards.

Range Protocol's Active Management Strategy is one of the biggest features of the protocol. Through its proven active management strategy, it can help LPs further optimize returns and achieve considerable currency-based value-added. It is understood that except for Range Protocol, other similar projects on the market are difficult to develop and provide active strategies.

Therefore, based on these two strategies, Range Protocol can provide investors with two kinds of income at the same time, one is "Return Since Genesis" income, which is the absolute income compared with holding the spot, provided by the active strategy . At present, the "Return Since Genesis" income of some LP pairs can exceed 1%. Most liquidity management platforms usually do not display the "Return Since Genesis" return, because usually the value is negative.

! [641] (https://img-cdn.gateio.im/social/moments-40baef27dd-47aeb3871a-dd1a6f-62a40f)

Range Protocol product interface

The other is "Fee APY", which is usually derived from the rate of return converted from the rate sharing income such as the handling fee at the bottom of the DEX (most income pools use this as the income measurement indicator).

Not long ago, the Range Protocol team compared the execution strategies of Arrakis Finance and Gamma on the income of "Return Since Genesis". The selected liquid currency pair was ETH/USDC, and the same cycle was set.

The results show that:

Arrakis Finance's "Return Since Genesis" yield is -1.18%

! [641] (https://img-cdn.gateio.im/social/moments-40baef27dd-fc4a0ddea7-dd1a6f-62a40f)

Plot 1 : Price and Liquidity Range , Plot 2 : % of USDC in the position , Plot 3,4 : Return

Gamma's "Return Since Genesis" is -9.58%

! [641] (https://img-cdn.gateio.im/social/moments-40baef27dd-61b95bcf72-dd1a6f-62a40f)

Plot 1 : Price and Liquidity Range , Plot 2 : % of USDC in the position , Plot 3,4 : Return

While Range's "Return Since Genesis" is +1.99%

! [641] (https://img-cdn.gateio.im/social/moments-40baef27dd-ba10f82d62-dd1a6f-62a40f)

Plot 1 : Price and Liquidity Range , Plot 2 : % of USDC in the position , Plot 3,4 : Return

It can be seen that the rate of return obtained by Range Protocol strategy execution is very advantageous.

As an on-chain platform with Web3 characteristics, Range Protocol maintains the ideology of decentralization, and it operates in the way of computing off-chain and executing policies on-chain. In terms of execution, Range Protocol has set up on-chain vaults and envelopes to provide transaction teams with endpoints to introduce transactions into the chain through their input, and use smart contracts to handle tedious DeFi-specific operations to achieve transaction efficiency. At the same time, Range Protocol manages user assets on the chain in the form of a non-custodial vault, so as to obtain features such as security, transparency, and trustlessness.

! [641] (https://img-cdn.gateio.im/social/moments-40baef27dd-a84b9da898-dd1a6f-62a40f)

Spanning a wider field on the chain

The early version of Range Protocol mainly focused on the spot DEX. Of course, Range Protocol plans to continue to launch Derivative Vault, LSD Vault and NFT Fi Vault in the next few versions. Among these innovative Vaults, Range Protocol is Systematic, automated policy management will be deployed to help users profit from these potential markets.

Focusing on several market segments, among which the on-chain derivatives track has developed since 2021, and has almost achieved a leap in transaction volume from 0 to hundreds of billions of dollars, and the emergence of leading derivatives unicorns such as dYdX and GMX beast. However, in the early stage of development, the liquidity mechanism has certain defects. For example, the GLP mechanism launched by GMX with the vAMM feature sets traders and LPs into opposition, and in the game between the two parties, one party always loses money. In the long run, traders usually lose money in the game. prevailed. In addition, the sustainability of liquidity in the derivatives ecosystem maintained by token incentives and fee incentives is also an issue that cannot be ignored.

The LSD track is a derivative track that comes with ETH 2.0. On the one hand, Lido (about 40% share) has monopolized the market for a long time, which has lowered the overall rate of return. The current APR is only 4%~8%. On the other hand, there are certain market risks in the "masturbation doll" model, and it is difficult for users to make secondary profits by holding LSD assets. The NFT market is an old narrative, and low liquidity and asset utilization have always been the main problems, especially the recent decline in floor prices of blue-chip assets such as BAYC and MAYC.

Therefore, Range Protocol has positive significance for the long-term development of the above-mentioned markets. For example, through strategies to help users obtain stable and considerable income, at the same time, it will bring liquidity gains to the derivatives and NFT fields on the chain, and reduce the LSD competition. Dow’s potential death spiral risk, and more.

With the continuous deployment of Range Protocol with a stable income strategy, it is expected to gradually establish itself as the upstream foundation in the encryption ecosystem, and promote the overall innovation and efficiency of the industry from the upstream position.

Range Protocol's Ambition: A Web3 Asset Management Platform

Range Protocol, as a liquidity management protocol that spans multiple sectors and has mature strategies, is linking asset providers, income seekers, and asset managers/quantitative traders with systematic trading capabilities to reduce investment The threshold for investors to obtain income from DeFi facilities. As a composable on-chain facility, Range Protocol can also provide modular integration services for more on-chain protocols, allowing more on-chain applications to integrate the features of Range Protocol. Range Protocol is facing the market as a professional one-stop Web3 asset management platform.

From the perspective of the cryptocurrency market, the services that can be provided by chain facilities are far from reaching the level of asset management. On the one hand, it is still small compared with the scale of active/passive management assets in traditional financial platforms, and on the other hand, it can provide professional management services There are fewer platforms.

From the perspective of the development of the traditional financial field that has been developed for hundreds of years, some relatively mature and professional asset management companies began to appear in the last century. Currently, asset management giants such as Fidelity and BlackRock help clients manage data. billion dollar assets.

With the development of the encryption field becoming more and more mature, more and more investors have become long-termists. With the promotion of compliance and regulations, the process of RWA (real asset virtualization) track is accelerating. For example, some traditional financial institutions such as banks The migration of the system to the chain may promote the migration of more assets to the chain, and accelerate fund management to become a new rigid demand. Similarly, this field will also be a blue ocean market with great potential.

With the support of a professional asset management team, Range Protocol is accumulating valuable experience from serving the early encryption world and promoting a new round of value paradigm shift in the encryption industry. With the emerging wave of the industry, Range Protocol's grand narrative is also promoting it to become a leader in the field of Web3 asset management.

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