Revelo Roundtable - LTIPP Edition #2

In this episode of Revelo Intel’s Twitter Spaces, which took place on June 13, 2024, Kirk hosted Tenzent from Silo Finance, Teddy Woodward from Notional Finance, Darren Cames from IPOR Labs, and Gavin Hasselbaink from DeltaPrime to discuss the latest DeFi innovations, Arbitrum’s incentive programs, plans for their protocols, and more! Read our notes below to learn more.

Background

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

Tenzent (Guest) – BD at Silo Finance

Teddy Woodward (Guest) – Co-founder and CEO at Notional Finance

Darren Cames (Guest) – Co-Founder and CEO at IPOR Labs

Gavin Hasselbaink (Guest) – Founder & CBDO at DeltaPrime

Silo Finance – a risk-isolated lending market that allows users to deposit tokens to earn interest or as collateral to borrow other tokens

Notional Finance – a protocol on Ethereum that facilitates fixed-rate, fixed-term crypto asset lending and borrowing through a novel financial instrument called fCash

IPOR Labs – a unified liquidity framework for intelligent on-chain asset management

DeltaPrime – a trustless borrowing platform on Avalanche and Arbitrum

DeFi Innovations: Insights from Silo, IPOR, Notional, and Delta Prime

Tenzent from Silo introduces himself, mentioning his role in business development, integrations, and growth. He shares his entry into crypto around 2017-2018 and his journey through various DAOs before joining Silo. Tenzent explains that Silo creates individual lending pools for each token, avoiding the cross-borrowing risks seen in shared pool models like Compound and Aave.
Teddy from Notional introduces himself and explains that Notional is a lending protocol focused on fixed rates and leveraged yield strategies. He describes how users can borrow from Notional to execute specific yield strategies, such as borrowing $ETH to invest in the $ETH-wrapped staked $ETH Balancer pool and stake the tokens on Aura. He highlights that Notional’s unique feature is the ability to offer fixed borrowing rates, reducing risk for users.
Teddy says that Notional uses an AMM model with three parties involved: lenders, borrowers, and fixed-rate liquidity providers. The fixed-rate liquidity providers supply capital to Notional’s fixed-rate pools, and when users borrow or lend fixed, they interact with these liquidity providers through the AMM, which prices the fixed rates based on supply and demand.
Darren from IPOR explains that he co-founded IPOR Labs, which built the IPOR protocol. He describes IPOR as an interest rate derivative and benchmark protocol. He shares that IPOR recently launched IPOR Fusion, which targets asset management.
Darren highlights IPOR’s role in providing benchmark rates similar to LIBOR or SOFR for DeFi and enabling trading of fixed and floating rates. He mentions the high leverage capacity of IPOR’s instruments and its peer-to-pool model that underwrites swaps.
Gavin from Delta Prime shares his background in communication and his journey from trading stocks and Forex to crypto. He describes Delta Prime as a protocol that combines the trustless nature of DeFi with the capital efficiency of traditional finance.
Gavin explains that Delta Prime allows users to borrow more than their collateral and create leveraged portfolios with cross-margin capabilities. He talks about various strategies users can employ, such as hedging leveraged positions and leveraging real yields, and highlights Delta Prime’s goal to integrate the best protocols on Arbitrum to enhance the value of prime accounts.
Gavin says that the capital must stay within Delta Prime’s whitelisted protocols and strategies, ensuring safety and preventing users from putting it into potentially risky or malicious opportunities.

Why Silo, Notional, and Delta Prime Chose Arbitrum

Tenzent from Silo explains that Silo has primarily deployed on Arbitrum due to its deep liquidity, vibrant DeFi community, and the unique use cases of Arbitrum-native projects. He highlights that Arbitrum’s active DeFi users and ecosystem have greatly benefited Silo, allowing for successful integrations and high-yielding markets.
Teddy from Notional shares that Notional initially started on Ethereum L1 and chose Arbitrum as its first and only L2 deployment. He cites Arbitrum’s large TVL and user base as significant factors.
Teddy appreciates Arbitrum’s product-focused approach, such as being the first to have fraud proofs and leading in L2 milestones. He highlights that these factors indicated Arbitrum’s commitment to fulfilling the promise of L2s, which gave him confidence in its longevity and stability.

Darren explains that IPOR, being an interest rate derivative protocol, thrives in environments with primary credit market activity, sufficient liquidity, and strong derivatives knowledge. Arbitrum checks all these boxes, having a strong derivative trading community and maintaining liquidity.
Darren mentions that Arbitrum’s ecosystem is particularly well-suited for IPOR, as it completes the derivatives puzzle with products like perpetuals, options, and bond coupon markets.
Gavin highlights that over-collateralized lending’s inefficiency led Delta Prime to Arbitrum, where there was significant demand for their solutions. Arbitrum’s developing DeFi ecosystem allowed Delta Prime to integrate various protocols, enhancing user strategies and demonstrating the platform’s capabilities.
Gavin notes that Arbitrum serves as a strategic step towards eventually moving into Ethereum, providing valuable insights into the Ethereum-focused community.

Plans with the Arbitrum LTIP Grant

Tenzent from Silo highlights their successful stickiness strategy, having maintained significant TVL even after initial incentives waned. Silo plans to continue deploying incentives creatively, utilizing multiple interest rate curves and derivative strategies through partnerships like Contango.
Teddy from Notional outlines their plan to use $ARB incentives across various activities on Notional, focusing heavily on borrowing and leveraging yield strategies.
Teddy notes that borrowers tend to be stickier, creating organic demand and benefiting lenders. Teddy acknowledges the inherent challenges of stickiness in large incentive programs but aims to minimize user attrition after the incentives conclude.
Darren from IPOR explains the different ways to earn on IPOR, highlighting the three pools: $wstETH, $USDC, and $USDM. He mentions that the pools earn from the underlying assets, real yield from swap fees, and power IPOR. The $USDM pool, currently risk-free, provides high yields.
Darren also explains the power IPOR liquidity mining mechanism and the high APRs currently available, which range from 100% to 180%. Darren highlights the benefits of the IPOR Fusion product and the incentivized liquidity provision for the $ETH/$IPOR pair on Camelot DEX.
Gavin from Delta Prime shares that Delta Prime received a 750k $ARB grant, with 100k $ARB allocated to the lending side and 650k $ARB to the borrowing side.
Gavin explains that borrowers tend to be more committed, which justifies the higher allocation. Gavin details the speed bonus mechanism, which rewards users based on how quickly milestones are reached and their contribution. He also mentions the retention bonus that incentivizes users to stay engaged over time.

What’s Next for Silo, Notional, IPOR, and Delta Prime in DeFi?

Tenzent from Silo mentions that their V2 is almost complete, having undergone five audits and a public audit. He talks the concept of liquidity hooks, allowing idle liquidity to be placed elsewhere or to use interest rates from staking contracts.
Tenzent notes that Silo V2 will continue running incentives and reveals that 500,000 $ARB will soon be up for grabs as part of their incentive programs.

Teddy from Notional shares that the $ARB incentives will start next Monday, following final tests on their UI changes. He also mentions the upcoming Pendle integration, which is currently in audits. This integration will allow leveraged yield strategies based on Pendle, enabling users to borrow from Notional to buy Pendle PT and potentially capture a good yield spread.
Teddy also mentions their next set of vault strategies focused on leveraged concentrated liquidity strategies, aiming to offer scalable and high-opportunity investments.
Darren from IPOR highlights IPOR Fusion, an infrastructure for automated DeFi asset management. He explains that Fusion allows for creating multi-call strategies between different protocols like Silo, Notional, and Pendle. This infrastructure helps optimize asset management and leverage while reducing risks such as liquidation scenarios.
Gavin from Delta Prime shares that the $PRIME token and $sPRIME LP token will be launching in 14 days. He explains that $sPRIME will offer access to prime features, governance power, and a share of liquidation fees generated, provided it remains within the price range.
Gavin also mentions their Q1 revenue and the future revenue share for active $sPRIME stakers starting July 1st, 2024. Additionally, he highlights the upcoming Penpie contracts update, encouraging users to provide liquidity to Pendle through Penpie via Delta Prime for multiplied points and a higher APY. Gavin highlights the opportunities in leveraging $ETH for Penpie with reduced price risk.

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Show Information

Medium: Twitter (Audio)
Show: Revelo Intel Twitter Space
Show Title: Revelo Roundtable – LTIPP Edition #2
Show Date: June 17, 2024