The Optimist Twitter Spaces with Equilibria

In Optimist’s Twitter Spaces, which took place on October 16, 2023, Subli is joined by Murilo from Equilibria to discuss Equilibria’s role in boosting Pendle Finance yield, bribe mechanisms, future plans, security audits, and more! Read our notes below to learn more.

Background

Subli (Host) – Founder of the Optimistic Podcast

Murilo (Guest) – Contributor at Equilibria

Equilibria – a yield booster on top of Pendle Finance

Equilibria’s Role in Boosting Yield and Its Relationship with Pendle Finance

Murilo shares that he is from Brazil and has worked in traditional finance for most of his career. He became interested in crypto about six years ago while working for a FinTech company. He met intelligent individuals and they brainstormed ideas for yield boosting. This collaboration led to the creation of Equilibria, a project that aims to simplify the user experience in the Web3 world by consolidating important projects and information in one place.
Murilo explains that Equilibria is a yield booster built on Pendle Finance and currently owns about 27% of all locked $PENDLE. He describes Pendle as a DeFi yield trading protocol allowing users to tokenize and sell future yields. He breaks down Pendle’s workings into three steps: Yield tokenization, Pendle AMM, and $vePENDLE for governance.
He further describes Equilibria’s workings, comparing it to the relationship between Convex and Curve. Equilibria allows Pendle holders to earn passive income and offers boosted returns without locking their $PENDLE tokens.

Maximizing User Benefits and Addressing the Challenges of Token Locking

Murilo explains how users who provide $PENDLE on Equilibria receive $vePENDLE in return, which they can trade or use to earn various incentives. The rewards are paid out in $PENDLE and $WETH. He mentions that the original $PENDLE tokens are locked into Pendle by Equilibria to maximize $vePENDLE, which boosts reward power for liquidity providers.
Murilo believes this approach will offer better returns for all users involved, including Equilibria users and Optimism users. He elaborates on the connections between Equilibria and Pendle, stating that their goal is to support Pendle Finance in maximizing its long-term value.
Murilo highlights the benefits of $ePENDLE and how users can engage more actively for better returns. He also touches upon the challenges of locking tokens and how Equilibria aims to enhance the potential of user assets. Furthermore, Equilibria offers its own platform tokens, $EQB and $XEQB, as additional incentives.
Subli comments on the vote lock tokenomics solution, which was initially introduced by Curve Finance and has been adopted by many projects. He points out that locking tokens for an extended period in the crypto world is becoming less popular. Subli sees the value in having a liquid asset that offers the same benefits as a locked token, which is what Equilibria is doing.
Murilo says that there are no penalties for exiting the pools early on Equilibria. He also provides details about the boosted pools on Equilibria and the benefits for Optimism users.
Murilo mentions the opportunity for $VlEQB holders to vote for pools and earn income through a bribery mechanism. He encourages users to explore this feature as it offers substantial earning potential. Murilo further explains the role of $XEQB in ensuring the alignment of Equilibria’s objectives with the interests of token holders and liquidity providers.

Bribe Mechanisms, and Future Strategies

Subli asks Murilo about the concept of $XEQB, wondering if it’s a vested token that can be redeemed to EQB with a penalty if one doesn’t wait for the full vesting period. Murilo confirms that Subli’s understanding is correct.
Subli discusses his familiarity with the bribe mechanism, noting its similarity to mechanisms used by Velodrome Finance, Curve, and Convex Finance. He then asks two questions: if Equilibria uses its own platform for bribe distribution and what Equilibria’s strategy is to ignite competition between protocols for more liquidity.
Murilo responds, confirming that Equilibria has its own user-friendly platform. He elaborates on the bribe concept, emphasizing its potential benefits and explaining the importance of competition. He mentions that protocols with liquidity pools on both Pendle and Equilibria purchase votes from $EQB holders to boost their APY on their liquidity pool. The more options available for users to vote on, the better the returns and the more attractive the bribery market becomes.
Murilo says that Equilibria currently has a strong relationship with Pendle and is focusing on maximizing that partnership. However, they are open to exploring other projects and protocols in the future to make their offerings even more attractive.
Murilo highlights Equilibria’s achievements so far, including a significant percentage of total locked vePENDLE and a successful IDO.

TVL, Upcoming Features, and Cross-Chain Strategies

Subli comments that Equilibria has reached a new all-time high in TVL.
Murilo mentions that he’s just been informed that Equilibria hit $50 million in TVL.
Murilo proceeds to discuss their plans. For the rest of the year, they will launch the $ePENDLE auto compounder feature, develop the vote delegation feature, integrate with a cross-chain operating protocol, enable $ePENDLE on multi-chains, provide incentivized liquidity for $ePENDLE-$PENDLE on Arbitrum, and list $EQB on more DEXs. For Q1 2024, they are developing a YT, PT limit order feature, launching the $VlEQB yield market, completing audits for new features, and planning to list $EQB on a centralized exchange to improve liquidity.
Murilo highlights the team’s dedication and their marathon mindset. He mentions global uncertainties, especially in the Middle East and Russia. They are preparing for the next bull run.
Murilo elaborates on their cross-chain strategy. They aim to have liquidity pools available across chains to improve the user experience. Given the varying yields on different chains, Murilo recognizes the challenges for retail users who won’t want to spend hours determining the best yield. He highlights the importance of making things simpler for them.

Navigating Future Steps and Addressing Security Concerns

Murilo states that their discussions revolve around the steps they should take next. He presents himself as an example of someone from the traditional finance world without deep tech knowledge. He highlights the potential financial gains in the market, especially for early adopters, and stresses that they are still in the early stages before achieving mass adoption.
Murilo highlights that their project’s goal is to simplify the process for users and provide explanations, especially for those unfamiliar with the intricate details of blockchains and protocols. Their aim is to consolidate information and ensure that users trust the Equilibria protocol.
He mentions that they are built on top of Pendle and believes in the future of cross-chain and multi-chain integration. They aim to be the stepping stone for this integration and are dedicated to ensuring safety and ease of use for their users.
Murilo speaks about security concerns, stating that they aim to provide a one-click experience for users to access different pools with varying APRs and APIs. They hope to generate curiosity and involvement from the community and emphasize that they are community-driven.
Murilo explains the concept of $XEQB, a unique token from Equilibria. This token ensures that the objectives of Equilibria align with the interests of token holders and liquidity providers. $XEQB plays a role in voting and helps buy back the $ePENDLE to support the peg. He recommends checking their Medium, discord, and social media for more details and acknowledges the complexity of some topics.

Security Measures and Future Plans

Murilo highlights the importance of security, emphasizing that their team of developers prioritizes security in everything they build. He mentions that their contracts have been audited multiple times by reputable entities such as Peckshield and Watch Pug. These audits are available for public review.
Murilo points out that Watch Pug is the audit partner for Pendle, making them very familiar with Pendle-related code. They believe they provide reliable protection to their users.
Murilo describes their proxy-based approach to implementing contracts, which enhances security. All upgrade permissions on the contracts are governed by a timelock and controlled by a multisig held by various core contributors and members of established firms.
He mentions their bug bounty program in partnership with Immunefi, encouraging proactive identification of potential bugs.
Murilo stresses that security is their top priority and they aim to make the user experience as easy and profitable as possible. He expresses gratitude for the partnership with projects like Optimism.
Subli reiterates the importance of security, mentioning personal experiences with hacks. He states that even if a protocol is audited, it cannot be guaranteed 100% safe. The best approach is to take multiple audits and have decentralized bounty programs.
Murilo says that they are working on some form of on-chain insurance, but it’s still in progress. He agrees with Subli that security is an ongoing challenge and highlights their readiness to address any issues promptly.

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Show Information

Medium: Twitter Spaces
Show: The Optimist
Show Title: Equilibria <> The Optimist
Show Date: October 16, 2023