In Gearbox’s Twitter Spaces which took place on April 10, 2024, Gone Multichain hosted Mugglesect to discuss Kelp’s evolution, Gearbox’s dynamic growth, integration success, AVS strategies, layer expansions, and more! Read our notes below to learn more.
Background
Gone Multichain (Host) – Head of Ecosystem at Kelp DAO
Mugglesect (Guest) – Marketing Lead at Gearbox
Kelp and Gearbox’s Growth: TVL Surge, Platform Evolution, and Future Airdrops
- Mugglesect praises Kelp’s rapid growth and mentions Gearbox’s significant increase in TVL shortly after launching on Gearbox, highlighting the strong demand for their services.
- Mugglesect appreciates Kelp’s role in enabling liquidity and composability in the ecosystem and mentions Gearbox V3, which significantly increased their platform’s capabilities and TVL.
- Mugglesect details the evolution from Gearbox V1 to V3, focusing on scaling, application development, and improved risk management to meet user demands and achieve higher limits on liquidity.
- Gone Multichain discusses community feedback that led to the implementation of cheaper transaction options on different layers and chains, revealing plans for further expansion and the integration of new technologies to enhance user benefits.
- Gone Multichain speculates about the potential benefits of leveraging Layer Zero technology in future expansions and describes the aggressive deployment strategy on various Layer 2 solutions, which also includes opportunities for users to earn additional rewards through airdrops.
- Mugglesect mentions that the speculation and excitement about the financial dynamics of the platform are driving current strategies, especially with EigenLayer mainnet going live, which will impact Actively Validated Services (AVS) activation and alter base yield rates, previously around 3%.
Exploring Risks and Opportunities in Kelp’s Yield Generation Model
- Mugglesect adds that airdrops are emerging as a new form of yield generation. He raises concerns about the increased risks associated with the new operational framework, particularly the potential for slashing in the context of staking as AVS becomes more secure, questioning how their platform plans to protect against these risks.
- Gone Multichain states that Kelp has a risk committee comprising crypto experts focused on niche areas like slashing, who provide advice on economic security requests from AVS.
- Gone Multichain confirms the intention for Kelp to function as a DAO and not just a marketing gimmick.
- Mugglesect asks about other risks related to Kelp’s stability, specifically regarding the peg of $rsETH against $ETH, and how Kelp plans to ensure its sustainability amid potential volatility.
- Gone Multichain explains that the main risks are smart contract vulnerabilities and slashing risks from Ethereum staking and AVS services provided by Kelp, highlighting that these also provide a dual source of yield.
- Gone Multichain says that yield from AVS might include airdrops, although not uniformly, and highlights economic security as a service requiring payment through yield.
DeFi Opportunities: Leveraging Arbitrum for Lower Fees and Higher Rewards
- Mugglesect references Kelp’s aim to achieve a milestone of $1b in TVL through user incentives like additional EigenLayer points for $ETH deposits, and mentions leveraging these points on Gearbox to maximize rewards.
- Gone Multichain mentions marketing campaigns as part of the strategy to reach $1b TVL milestone and highlights the additional EigenLayer points users can earn while interacting with Kelp.
- Mugglesect acknowledges that the high gas fees and slow speeds on the Ethereum mainnet necessitated significant upfront collateral, thus setting high minimum borrowing rates to ensure safety during liquidations.
- Mugglesect says that with the deployment on Arbitrum, they are now able to offer borrowing rates as low as 0.35 $ETH, enabling access to leverage for those with as little as 0.05 $ETH. This move aims to cater to both lenders and borrowers by taking advantage of Arbitrum’s low gas fees.
- Mugglesect highlights Arbitrum’s vibrant ecosystem with a proliferation of protocols and native assets, enhancing the user experience in the DeFi space.
- Mugglesect outlines the benefits on Arbitrum, including up to nine times leverage points, no lockups, and withdrawal flexibility for lenders, along with high yields.
Check out these important links
- Listen to the original audio
- Follow Gone Multichain on Twitter
- Follow Kelp DAO on Twitter
- Follow Gearbox on Twitter
Show Information
- Medium: Twitter (Audio)
- Show: Gearbox Twitter Space
- Show Title: Gearbox X Kelp: Road To One Billion
- Show Date: April 10, 2024