Search…
⌃K

🚀 Future R+D - MVP and Beyond

Vertex remains committed to user-driven development and evolution.
This being the case, there will be much flexibility in our impending roadmap. However, there are some clearly interesting product features that seem interesting to explore and push into development, including:

Looping Strategies for Staked Assets (leveraged yield farming)

Allowing yield-generating staked assets as collateral for borrowing funds to purchase and stake more assets. The resultant total return is a function of how many times this process is repeated on the original equity (ie. how many times it was “looped”).
Vertex could enable this as standard by embedding the ability to trade assets against one another so long as the asset is an allowable collateral within the money market. This will enable looping by default with simplified interface and leverage for users by default. The ETH/StETH trade beloved by so many market participants can have its arbitrage condition expressed as:
The reduced trading friction means arbitrageurs can efficiently and cheaply leverage this trade when the condition above holds and they remain within risk limits.
Another important variable is the collateralization ratio required to borrow funds. Crypto lending tends to require overcollateralization, which means the value of collateral exceeds the value of borrowed assets. When traders collateralize staked assets to borrow more assets, they will borrow a smaller amount after each successive round of collateralizing and borrowing. The total amount of staked assets after many repetitions is a geometric series with a constant ratio derived from the collateralization ratio and gas fees. A yield multiplier may be applied to staking yields to find the maximum effective yield of a looped staking strategy. Assuming no gas fees:
For example, if borrowing ETH requires 150% collateral, then gasless looping can create a yield up to 1.5 / (1.5 - 1) = 3 times the staking yield. Default looping could frictionlessly apply these yield multipliers to staking yields.
In truth, a rational expectation would be that reducing friction means efficient arbitrage causes ETH borrow rates to converge on staking yields minus some liquidity premium as defined by the free market. Again, all market participants benefit from greater efficiency, higher returns, and more ways to express risk preferences.

Crypto Indices

A basket of coins or tokens which can be traded like any other listed token. The shortage of high quality index products for crypto makes this an interesting problem to address. The success of GMX’s GLP and Curve’s Tricrypto product demonstrate demand for the diversified exposure indices bring. If combined with passive liquidity provision, they can also be an interesting way to earn yield on a portfolio of assets.

More exotic potential use cases such as:

Token Launchpad

A platform for new dApps to list their token for trading in an initial coin offering (ICO). This will allow up-and-coming protocols to distribute their tokens and raise capital in a decentralized way. Because the launch would be on an integrated exchange, a limit order book for trading could be established in short order to help price discovery and active trading.

Unconventional Perpetuals

Perps can be made to track any volatile index quite accurately as long as sufficient traders are willing to trade on each side. Interesting areas for research may include floor perps on NFTs or perps linked to real-world assets such as foreign exchange.

Prediction Markets and Binary Options

These allow for efficient event-based betting. By including more oracle data feeds, Vertex can ensure fair, accurate, and decentralized settlement of wagers on a number of binary outcome events.