Narwhale.finance & Uniswap V3 pivot
Short history
NAWA launched on January 24th, to provide incentivized vaults and farming strategies for EUR & algo stablecoins, a niche that hasn’t previously been explored by yield aggregators.
Roughly 2.7M NAWA have been distributed to the following single-sided and LP pools: USDx, sUSD, sEUR, EURS, FRAX, DSD, ESD, AMPL, MIC, BAC, BASED, Sushi-MIC-USDT, Uniswap-FRAX-USDC, Uniswap-BAC-DAI, Uniswap-AMPL-ETH, Moonbased, Curve, EURS-sEUR, Uniswap-NAWA-ETH, for 5 days.
It was a fair distribution starting from 0 circulating supply, no IDO, no presale, no VC allocation.
On January 28th, we have changed the emission to 10 NAWA/block only for the NAWA-USDC Uni pool, which is still alive and healthy at over 650% APR at the moment of writing.
3 months have passed since then and the current circulating supply is 9.3M NAWA, 3 times lower than the initial schedule described here .
Note that NAWA is being minted only by providing liquidity to NAWA-USDC pool.
In the meanwhile, the UNI NAWA-USDC pool is sitting on $600000 liquidity and you can still farm by joining the pool and stake at https://narwhale.finance for >600% APR.
Development status up until UNI v3 release announcement
For the past 2 months we have been working on providing farm strategies for the EUR and algorithmic stablecoins which have managed to stay close to their peg: EURS, sEUR, FRAX, AMPL, and newly added FEI.
Unfortunately, MIC, DSD, BAC, ESD, USDx did not survive, thus lowering our addressable market share.
The readiness of the above implementation is at 80% and is scheduled to release in the event of failure to deliver a viable product for Uniswap V3 use case.
Another feature that we have planned is to provide the option of choosing insurance coverage on deposit, subtracted from the underlying.
The new UI/UX frontend is underway and scheduled for the next release.
Gnosis’s SafeSnap DAO implementation is yet to be announced and will NOT be available in the next release.
BSC (Binance Smart Chain) integration is being considered on a later release.
Uniswap V3 pivot
Once Uniswap V3 release has been announced, we foresaw an opportunity in a larger addressable market.
At the time of writing, the entire market capitalization of planned stablecoin strategies is at around $600m. Following the smaller footsteps of BADGER, which has captured ~10% of the WBTC addressable market cap, we projected a 5% conversion. That would mean ~$30m TVL for https://narwhale.finance.
On the other hand, Uniswap is currently trading at almost $2b per day, with more than $6m generated fees to liquidity providers and no plan of holding back anytime soon.
Its total value locked has exceeded 8b USD and capturing a conservative 1% of that value, would project the narwhale.finance TVL to $80m with a way higher ceiling, unlike algo stablecoin market which has yet to prove itself.
The larger narwhale.finance TVL, the higher the generated protocol fees. 100% of generated fees will be evenly distributed to single-sided NAWA stakers until decided otherwise by DAO.
Now back to the opportunity.
Uniswap V3 added new complexity when it comes to liquidity providers: they now have to choose which pool to deposit into — as UNI v3 will support multiple pools with fee tiers — and to choose the price interval.
The LP positions are now represented by NFT’s and no longer fungible. They can’t be used as collateral any longer, unless a third party comes in to wrap these NFT’s.
The trading fees are no longer auto-compounded back into the pool, the liquidity providers must manually claim their fee each time they want.
To solve the above problems Narwhale.finance is currently working on the following features:
- Provide an unchanged (same as uni v2) liquidity providing experience: users deposit token pair in NAWA “wrapper pools”
- Fees accrued by the pool will be auto-compounded
- Automatically concentrate liquidity distribution within an optimal TWAP range
- Provide ERC20 token representing the liquidity position, which in turn can be used as collateral on different protocols or uni v2 liquidity mining style farms
- Single side deposits: users can deposit a single asset and receive a v2 like LP ERC20 token representation
At launch there will be no added fees for using https://narwhale.finance, however, they will be set after the guarded launch limit has been lifted. The fees accrued will be distributed to NAWA single-sided staking providers.
Near future & Next GUARDED release
Uniswap v3 is scheduled to release on the 5th of May.
We are planning a guarded release 1 week later, on the 12th of May. The initial deposit limit will be set to $5M. Why guarded release? Because there is no way an audit can be ready this fast.
During the guarded release, we will work closely with a chosen auditor. Once we receive the green light, we will lift the guarded release limit.
The new UI/UX will be deployed on the release date.
BSC integration & SafeSnap DAO implementation are NOT going to be included in the next release.
If we fail to deliver or capture the projected market share, we will switch back to our initial plan of delivering EUR and algo stablecoin vaults & strategies.
Links
Discord: https://discord.gg/umhM4MvtKf
Twitter: https://twitter.com/FinanceNarwhale
Website: https://narwhale.finance
Github: https://github.com/narwhale-finance
