Hello, everybody!
On February 6th the updated and improved Tsunami Exchange protocol was launched. In this article we will tell you what progress we've made since the launch, share facts about the platform and show you how the first waves on the way to the grand tsunami are emerging.
Enjoy reading!
Our team of 3 developers, a blockchain architect, designer, tester, analyst, community manager and technical writer has been nurturing ideas for the perfect futures trading platform since the first version of Tsunami. Dynamic trading, a proprietary oracle, minimal spreads between prices - the things we were going for, and the things that already exist.
Launch
Do you think it's hard to launch a protocol? The answer is mixed. To a person far from programming, it may seem something unrealistic, but more often than not even professionals face difficulties. The difference between a successful project and a not-so-successful one is how the team deals with these difficulties.
Without getting too deep into the technicalities, let's just say that we've been through a lot this week, but most of the adventure is yet to come.
First challenges
New projects are always a development. For some users it's a chance to try new things and for others it's a real challenge. So, on the first day after its launch, the protocol was put to the test. After discovering the manipulation of the XTN price, the team suspended the protocol. Due to this seemingly negative impact on the protocol, we discovered imperfections in the oracle, which we made edits to within the same day. Hardships harden.
First numbers
How do you measure the success of a new project? Most often with statistics about the number of users and the number of liquidity over time.
Share some of the data we gathered in a week of trading:
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almost 100 active traders have tried trading on Tsunami 2.0;
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more than 880 positions were executed on the new protocol;
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almost 700,000 XTN were provided as liquidity by the users;
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total trading volume for the week amounted to almost 11 m XTN;
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the maximum 24h volume was more than 4 m XTN;
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TSN staking (farming) APR for the week averaged about 20%.
Liquidity provision
One of the subjects of discussion last week was the topic of liquidity provision. You may refer to our recent article for a detailed acquaintance with the mechanics of this work.
To illustrate the current state of liquidity let's refer to the chart below (fig. 1). This graph, but with a different time interval, we have already considered in article, where you can find its detailed description.
Let us remind you that rate is the ratio between the amount of liquidity and the amount of money paid out to traders.
Looking at the broken line on the chart, you can see that liquidity providers are currently in the red by 0,01 units or 1% of the deposited amount. You may think this is a lot or a little, and a fair question may arise, "How does a positive APR come about?", now we'll help you figure it out.
In order to compensate for impermanent losses that are generated from paying traders a positive PnL, additional rewards have been added to the liquidity provision mechanics: 70% of all trading fees and 600 TSN per week from the Tsunami team.
A few more numbers
The cumulative PnL of traders during the existence of the new protocol was +30,000 XTN (Fig. 2). This means that it was paid from the liquidity vault (Omnivault). However, the liquidity providers paid only 6,500 XTN, rest was compensated by fees, liquidation penalties and XTN staking. And that's not counting the additional rewards in TSN tokens.
Now imagine the situation with a negative PnL. Even losing on the short side, liquidity providers win overall. In addition, the parameters of the protocol are variable, and it is important for us that both sides of the trades are able to profit.
Capital efficiency
When we say that Tsunami uses capital more efficiently than any other protocol of the ecosystem, we don't mean big marketing buzzwords, we're basing it on the data we have.
Capital efficiency is the ratio of the amount of trading volume a protocol can support to the amount of liquidity provided.
To understand this formulation, let's compare capital efficiency on WXNetwork and Tsunami Exchange using public data (Table 1).
Thus, we see that despite the similar 24h trading volume on the platforms, the capital efficiency on Tsunami is higher than on WXNetwork.
Transparency and trust
You may ask why we tell you all this. Our team believes the main principles of crypto are openness and transparency. We pay special attention to user experience, expanding our educational base, and we also plan to add a separate page with protocol statistics to our website. We are always glad to hear your opinion and answer your questions.
Provide liquidity, trade, stake tokens and open new horizons with Tsunami Exchange!
Thank you for reading.Always your Tsunami Team!