DeFi Raiders AMA X Timeless FI

Introduction

In this section, Relentless introduces the guest speaker, Dakota from TimelessFi. Dakota explains his role as the leader of the growth unit for Timeless and Bunny.

Introduction to Dakota and TimelessFi

• Dakota is the leader of the growth unit for Timeless and Bunny.

• Timeless is a yield market that allows users to long and short yield. The main problem it solves is capital efficiency.

Use Cases for TimelessFi

In this section, Dakota discusses two main use cases for TimelessFi: boosted yield and hedging.

Boosted Yield

• Boosted yield can be achieved by selling nyt tokens after staking PYT and ETH tokens.

• The boost number in the user interface represents the value of PYT divided by the cost of the native underlying asset.

Hedging

• Hedging involves protecting oneself against changes in borrowing costs or yields going up or down.

• PYTs should go up in value when yields are expected to increase while NYTs trade opposite to that.

Understanding PYT and NYT Tokens

In this section, the speaker explains the concept of PYT and NYT tokens and where they can be utilized to earn yield.

PYT Token Utilization

• When a user mints a token, it splits between PYT and NYT.

• At present, the yield earned by PYT is only from the underlying asset within Timeless ecosystem.

• The yield cannot be taken into a lending protocol or borrowed against at this point in time.

XPYT Token Usage

• XPYT is the token that can be used in other protocols.

• There are no protocols set up yet for XPYT but it will likely be adopted as collateral due to its auto-compounding feature.

• Anywhere that allows borrowing should accept stable coins like USDC or LSDS as strong collateral.

Yield Hedging with Timeless

In this section, the speaker discusses how yield markets in web 3 trade differently compared to actual markets.

Yield Market Trading Differences

• Yield markets in web 3 do not trade exactly one for one with actual markets.

• The price of ETH losing $100 may not necessarily impact what the lending market associated with USDC on AVE is.

• When stable coins lost their peg two weeks ago, the underlying yield on AVE for Tether went through the roof (90 APY).

Speculation and Hedging

• Correctly predicting and creating models around these concepts will be where hedgers make their bank or speculators make their profits.

Introduction to Timeless Protocol

In this section, the speaker introduces Timeless Protocol and its unique features.

Tokenization Model

• Timeless Protocol has developed a tokenization model that allows users to engage in speculation, yield hedging, yield boosting, and earning fees with one technical token or underlying position.

Perpetual Yield with No Maturity Date

• Unlike other protocols that have a maturity date, Timeless Protocol offers perpetual boosted yield with no risk of liquidation and no maturity. This makes it easy for users to stack their assets without worrying about expiration dates.

Variable Rate vs Fixed Rate

• Timeless Protocol is a variable rate protocol with no maturity date. The boost fluctuates based on the yield rate, making it unnecessary to have a maximum boost or maturity achieved with boost. Compared to fixed rate protocols like 88 mph, variable rates make things less complicated and theoretically easier to get deeper liquidity.

Pricing PYT

• Timeless Protocol allows people to speculate on the yield by creating boosted yield in perpetuity without risk of liquidation in the form of PYTs (Perpetual Yield Tokens). The price of PYTs is not set every day but rather determined by the market through exponential discounting.

Understanding PYT and NYT

In this section, the speaker explains how PYT and NYT work in relation to the underlying asset. They also discuss how to switch between the two depending on market conditions.

PYT and NYT in Relation to Underlying Asset

• PYT is worth a fraction of one percent of the underlying asset while NYT is worth half of the underlying asset.

• If PYT is worth 99% of the underlying asset, then NYT is worth 1% of the underlying asset.

• Buying NYT at 1% of the underlying asset can result in a massive return if the market comes back into balance.

• If PYT trades at half the value of the underlying asset, it only doubles in value when it goes to an extreme.

Switching Between PYT and NYT

• Switching from PYT to NYT is advisable when you want to exit a trade.

• If you're buying NYTs to speculate on a huge move to downside in some yield market, it's advisable to manage your position actively.

Active Management Requirements for Yield Markets

In this section, the speaker discusses how much active management yield markets require. They also explain that it depends on what sector you are speculating on and what your end goal is.

Active Management Requirements for Yield Markets

• The amount of active management required for yield markets depends on various factors such as market swings, volatility, and end goals.

• Different types of yield can be used in web 3.0 protocols such as staking rewards from Lido and lending markets on Aave.

• The amount of active management required depends on what sector you are speculating on and what your end goal is.

• Assets with smaller yields (sub 4% APY) tend to be more volatile than those with larger yields.

Passive vs Active Management

In this section, the speaker explains the difference between passive and active management. They also discuss how the lack of maturity date in PYT makes it easier for passive investors.

Passive vs Active Management

• If you're managing a treasury and plan to collect passive income, then you don't need to manage your position actively.

• PYT's lack of maturity date makes it easier for passive investors since they can collect passive income without having to manage their positions actively.

• Active management is advisable if you want to place your positions in certain ways but not have to be too active.

Short-term vs Long-term Trading

In this section, the speakers discuss the importance of considering one's trading mindset and how long they plan on holding a position.

Benefits of X PYT

• The auto-compounding feature of X PYT is discussed, as well as its ability to allow users to move PYT to other protocols while still earning yield that is not locked in.

• Using X PYT can lead to better efficiency and gas savings by not having to constantly take yield and buy more PYTs or go elsewhere.

• Building on Uni V3 was chosen due to its capital efficiency and because the team believes Uni Swap is doing many things right.

Bunny Liquidity Engine

This section covers Bunny, which enables projects relying on Uniswap V2 or Sushi Swap liquidity to migrate over to Uniswap V3 and access concentrated liquidity.

High-Level Overview

• Bunny takes a Uniswap V3 LP token (currently an NFT) and turns it into an ERC20 token, allowing protocols to keep their existing infrastructure while saving on gas.

• Bunny offers utility for smaller LPS looking to save money on transactions by being more capital efficient.

• Gauges are mentioned but not discussed in detail.

Introduction to Liquidity Engine

In this section, the speakers introduce a liquidity engine and a token called LIT. They explain how voters can direct gauge emissions in a similar fashion to other genomic products.

Liquidity Engine and LIT Token

• The team created a liquidity engine that added gauges forked from the Curve code.

• The team also created a token called LIT (Liquidity Incentive Token).

• Staking LIT allows voters to direct gauge emissions similarly to other genomic products.

• Voters can go in and direct gauge emissions in a similar fashion that you would see with curve or balancer or any other genomic product really.

Benefits of Using Tokens Over NFTs

In this section, the speakers discuss why tokens are more friendly than NFTs for most protocols. They also talk about gas optimization and how it is more gas-friendly.

Advantages of Tokens Over NFTs

• Protocols are built to be more token-friendly than NFT-friendly.

• Gas optimization makes tokens more gas-friendly.

OLED Model Explained

In this section, the speakers explain how OLED works. They describe how V-LIT holders vote on gauges or but yep and direct emissions to LP providers.

How OLED Works

• V-LIT holders vote on gauges or but yep and direct emissions to LP providers.

• Emissions are paid in O-LIT which is an option to buy LIT token at a discount.

• The discount is 50, which means that the number accounts for you paying the difference between the discount and the underlying.

• You provide wrapped ETH along with the equivalent amount of OLED token to get back LIT in return.

• Staking LIT allows users to lock it for a certain period of time.

Conclusion

In this section, the speakers conclude their discussion on Liquidity Engine and OLED.

Final Thoughts

• The protocol's treasury will always be collecting funds regardless of market conditions.

• The team has modeled out how OLED works with having in reference to Foo article.

• Keeping the hills of Timeless in mind, staking LIT is a healthy choice for long-term perspective.

Introduction

In this section, the speaker introduces the project and talks about how it is rapidly increasing in value over time. They also mention having a strong team that has been around for a while.

Project Introduction

• The project is rapidly increasing in value over time.

• The team behind the project has been around for a while.

Goals of the Growth Unit

In this section, the speaker talks about their goals for the growth unit, which include educating and bringing attention to the rest of the crypto community about what they are doing.

Goals of Growth Unit

• Educate and bring attention to what they are doing.

• Bring attention to how thoughtful their team has been.

Making Defi More Attractive

In this section, the speaker talks about how different protocols are starting to build projects that can be sustainable for a long period. They also discuss how making defi more attractive will help attract more people and money into it.

Making Defi More Attractive

• Different protocols are building sustainable projects.

• Making defi more attractive will help attract more people and money into it.

V-Lit Boost

In this section, the speaker discusses V-Lit boost and its importance in receiving rewards from LPS. They also talk about how owning Lit, staking it, and getting V-Lit can lead to a 10x boost.

V-Lit Boost

• Need to have V-Lit to receive boost from LPS.

• Owning Lit, staking it, and getting V-Lit can lead to a 10x boost.

Foo Documentation

In this section, the speaker talks about Foo documentation and how it is not live yet. They suggest going to their Discord channel for more information.

Foo Documentation

• Foo documentation is not live yet.

• Suggest going to their Discord channel for more information.

Boost Calculation

In this section, the speaker discusses boost calculation and how it works. They also mention that there are calculators on their website that can help determine boost.

Boost Calculation

• There are calculators on their website that can help determine boost.

• Need to have the same percentage of the pool that you're LPing as you have percentage of V-Lit.

Capital Efficiency

In this section, the speaker talks about capital efficiency and how they chose the 10x boost.

Capital Efficiency

• Chose 10x boost based on trying to make everyone as capital efficient as possible.

Understanding the V-Lit Boost

In this section, the speaker discusses how the V-Lit boost makes up for not getting 100% from other sources like O-Lit.

The Benefits of V-Lit Boost

• The V-Lit boost compensates for not getting 100% from other sources.

• The tokenomics of V-Lit are well thought out and optimized for longevity and health of both end-users and the protocol.

• Educating the crypto community about what they're doing is a priority for growth unit.

Roadmap for Layer Twos

In this section, the speaker talks about their engineering roadmap and plans to add OLED incentives to layer twos.

Engineering Roadmap

• The engineering team has produced a roadmap that includes adding OLED incentives to layer twos.

• Polygon, Optimism, and Arbitrum are going to be targeted first.

• They need to find a solution to bring gauge incentives to L2's.

Exciting Future Plans

In this section, the speaker talks about exciting future plans and how they plan on educating people about their work.

Future Plans

• There have been many requests from different protocols interested in working with them.

• They plan on educating the entire crypto community about what they're doing.

• Looking forward to following up after they've fully launched.