Revelo Roundtable - LTIPP Edition #4 w/ Alchemix, Yield Yak, & Factor

In this episode of Revelo Intel’s Twitter Spaces on June 19, 2024, Kirk hosted Koala from Alchemix, Ravageur from Yield Yak, and Kurapika from Factor to explore the latest on Arbitrum DAO’s incentive programs, the appeal of Arbitrum, the future of cross-chain DeFi, how their protocols are leveraging incentives, roadmaps for the next six months and more! Read our notes below to learn more.

Background

Kirk (Host) – Head of Business Development at Revelo Intel

OvΞrKoalafied (Guest) – COO at Alchemix

Ravageur (Guest) – Contributor at Yield Yak

Kurapika (Guest) – Contributor at Factor

Alchemix – a future-yield-backed synthetic asset protocol and community DAO

Yield Yak – tools for DeFi users on Avalanche and Arbitrum

Factor DAO – a protocol building and automating complex DeFi strategies are as simple as a drag-and-drop, no coding required

Exploring Arbitrum DAO’s Incentive Programs: Insights from Alchemix, Yield Yak, and Factor DAO

Koala from Alchemix introduces himself, mentioning his entry into crypto in 2017 and his role at Alchemix. He describes Alchemix as a self-repaying loans protocol that allows users to deposit assets, take loans in synthetic assets, and have the loans repaid over time using yield from DeFi without the risk of liquidation or interest.
Ravager from Yield Yak introduces himself, noting his long-term involvement in crypto since 2015 and his role at Yield Yak for almost three years. He explains Yield Yak’s tools, highlighting their auto-compounding and yield-optimizing features, as well as their Dex aggregator, Yak Swap, which offers unique features like swapping in and out of GMX’s GLP.
Kurapika from Factor DAO introduces himself as the founder of Factor. He shares his crypto journey starting in 2016 and talks about Factor’s mission to solve the fragmentation issue in DeFi. Factor allows the combination of different DeFi building blocks to create automated strategies, with their main product being Factor Studio, which offers a drag-and-drop interface for users to create and automate their own strategies with over 30 different integrations.

Exploring Arbitrum’s Appeal and the Future of Cross-Chain DeFi

Kirk notes the Arbitrum DAO’s generous incentive programs aimed at growing the chain and retaining users in a competitive environment. He asks the participants what originally attracted them to Arbitrum beyond the incentives.
Koala from Alchemix explains that Alchemix needs a mature ecosystem with dependencies like yield strategies and decentralized exchanges. Arbitrum was one of the few layer-2 ecosystems mature enough for their needs. An early partnership with Ramses’s DEX provided initial liquidity pools, enabling them to deploy successfully.
Ravager from Yield Yak shares that their team, originally native to Avalanche, chose Arbitrum as their next expansion due to its mature DeFi ecosystem, which he describes as the most mature in the entire industry. Arbitrum’s strong and serious DeFi community, yield opportunities, and unique features made it a natural fit for Yield Yak.
Koala adds that Arbitrum was one of the few layer-2s where they saw a lot of DeFi teams building new things rather than just forking projects from the main net, indicating a truly innovative ecosystem.
Kurapika from Factor DAO mentions that Arbitrum’s mature ecosystem specifically for DeFi is rare and essential for growing novel products. The ecosystem allows for better optimization and communication with other fast-moving DeFi teams, enabling the creation of new paths and structures rather than just replicating existing ones.
Kirk follows up with a question about the proliferation of multi-chain or omni-chain DeFi. He asks whether the cross-chain future might dilute the unique ecosystem that Arbitrum has created and invites thoughts from the participants.
Ravager acknowledges that while communities are still fragmented, this barrier may lessen as the process of bridging funds improves. However, he believes comfort and trust factors within established communities will remain significant. He notes that Arbitrum’s first-mover advantage and strong DeFi community have proven sticky and hard for competitors to overcome despite similar incentives.
Kurapika discusses the importance of addressing liquidity fragmentation across chains. He explains that Factor aims to enable cross-chain liquidity and seamless actions across different chains while maintaining native incentives and community elements. This approach is intended to tackle the fragmentation issue and optimize DeFi functions, even across multiple chains.

Leveraging Incentives and Future Roadmaps

Kirk asks the participants to explain where these incentives will be integrated into their protocols and how users can benefit from them, providing some actionable insights.
Koala from Alchemix explains that users can take self-repaying loans by depositing funds and taking out a loan. They use the grant to accelerate loan repayment, allowing users to experience higher yields and faster loan repayment. Additionally, incentives are provided to liquidity providers on Ramsey’s DEX. He elaborates that when users take a loan, they receive synthetic assets like $alETH or $alUSD, which require liquidity for conversion. Incentives for liquidity provisioning enable users to access these loans and benefit from them, with additional rewards in Arbitrum for providing liquidity.
Ravager from Yield Yak outlines their approach of incentivizing DeFi strategies over 12 weeks, initially focusing on the new Stargate v2 pools. Stargate pools for $ETH, $USDC, and $USDT are being incentivized with $ARB, resulting in a significant increase in TVL. They aim to deepen liquidity in blue-chip assets and see bridging as a critical infrastructure element. They also provide gas refunds for using their DEX aggregator, Yak Swap, with $ARB airdrops every two weeks.
Kurapika from Factor explains that they have over 150 different strategies, including auto-compounders and looping strategies. The Factor DAO allows members to vote on the distribution of LTIP incentives, with 28,000 $ARB allocated per week based on these votes. Users can influence where the rewards go, enabling a decentralized approach to incentives.
Kirk then asks about the future roadmaps and milestones for their protocols over the next six months.
Koala from Alchemix shares that their focus is on making Alchemix v2 the best option for self-repaying loans and getting more people to adopt it. They have doubled their developer team, who are now working on Alchemix v3, which will bring backend changes while keeping the user experience familiar. Additionally, they aim to push adoption on layer-2s like Arbitrum to maximize the benefits of DeFi.
Ravager from Yield Yak highlights their continuous search for good DeFi strategies and yield farms. Their main focus is improving the user experience, especially for new users. They aim to make Yield Yak a more user-friendly, one-stop shop for DeFi by enhancing discoverability and guiding users through high-yield strategies across different chains.
Kurapika from Factor talks about their upcoming revamp of the Discover app, which will offer a new look and feel. The major focus is on Factor Studio, a drag-and-drop tool for creating and automating DeFi strategies, similar to Zapier for DeFi. Over the summer, they plan to introduce Studio Pro, allowing users to monetize their strategies and transition into on-chain asset management, where creators can earn performance and management fees from depositors.

Reflections on DeFi Innovation and Ecosystem Growth

Koala from Alchemix expresses excitement about the resurgence of genuine innovation in DeFi. He mentions that the last two years saw many forks and repackaged solutions, but now there’s fresh innovation. Koala highlights promising projects like Gauntlet’s Aera, which offers managed yield strategies while users retain custody, and innovative lending structures from Euler, and Morpho. He emphasizes a return to the core DeFi principle of users maintaining control over their assets while allowing specific permissions for protocols.
Ravager from Yield Yak agrees, noting the positive impact of the LTIP and STIP rewards on the Arbitrum ecosystem. He praises the recent efforts by the Arbitrum DAO to fund a marketing team to align the community and enhance communication. Ravager feels that this unified approach to executing and communicating incentives will strengthen the ecosystem and benefit DeFi users in the coming months.
Kurapika from Factor echoes these sentiments, adding that the collaborative nature of the incentives fosters innovation and synergy among protocols within the Arbitrum ecosystem. He believes that this collaboration will lead to the development of new products and strategies, benefiting both the protocols and the broader Arbitrum community. Kurapika is optimistic about the future and foresees a productive and innovative period ahead.

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Show Information

Medium: Twitter (Audio)
Show: Revelo Intel Twitter Space
Show Title: Revelo Roundtable – LTIPP Edition #4
Show Date: June 19, 2024