Saddle Finance is an Ethereum-based Automated Market Maker specializing in low-slippage, high-efficiency swaps for pegged assets built on liquidity pool architecture. Saddle sets itself apart from other conventional stable swap AMMs with its Flash Loans and Virtual Swaps to support instantaneous non-collateralized loans and high-volume trades using synthetic assets. So robust is their architecture that they power SushiSwap v2 and Iron Finance’s pegged assets pools.
Like many AMMs, Saddle emits 1.25 million SDL tokens weekly and employs vote-escrow tokenomics to allow the community to determine how much SDL emissions each liquidity pool receives. However, Saddle liquidity providers have not yet utilized vote incentives to optimize emissions flows and promote greater community engagement.
That is all about to change — for the better.
We believe in the power of decentralization and deep liquidity. We married these core tenets together when we created pitchFXS: a liquid wrapper for FXS with access to native veFXS yield, gauge incentive yield, and LP compatibility. As of today, we are expanding its integration to Pitch Snapshot voting.
We’re intimately familiar with the importance of democratizing DeFi governance, which is why we’re launching our own Snapshot to democratize Pitch’s on-chain governance. Like all Snapshot spaces, Pitch’s is completely public and participation is unrestricted.
Most importantly, Pitch Snapshot voting is powered by pitchFXS, so on-chain governance for our protocol is fully integrated into our liquidity ecosystem. This means that you can vote with the same token with which you farm and stake, but without needing to lock it for a separate governance token
Programmability and capital efficiency are central to the vote incentive marketplace. That is why Pitch Money was one of the first DeFi vote aggregation products that allowed protocols to customize pitching costs. The Capital Efficiency Ratio in our Governance Console allowed protocols to specify how much they are willing to reward voters for each dollar they earn in emissions. But how can we improve this further with voters as our first priority?
The goal of the Governance Console’s Capital Efficiency Ratio was twofold: de-risk the pitching process and retain incentive programmability. But the CER still placed protocols one abstraction from their voters.
As with the CER, protocols can specify a precise price per vote figure to maximize ROI, lower incentivization costs, and aid with price discovery. However, with Priced Pitches, voters also benefit from increased reward transparency.
The May 2022 stablecoin crash was catastrophic. It slashed over $17 billion in crypto’s market capitalization. To say that the crash affected stablecoins would be a huge understatement. But for Frax—DeFi’s first fractional-algorithmic stablecoin protocol—the peg has remained robust. This is in large part due to Frax’s locked liquidity system. In fact, locked liquidity has protected the stablecoin against sell pressures and mitigated against freefall.
Locked liquidity is a tried and true method of defending pegged assets, and its yields for doing so are invaluable to the ecosystem. But how can you take your yield to the next level?
By using Pitch’s veFXS treasury to further boost your LP tokens.
Welcome to the July 2022 Pitch Dev Update!
Beginning this month, our team will highlight key accomplishments in our development cycle for the community.
When we launched pitchFXS one month ago, we mentioned native Snapshot voting as one of the main advantages to holding pitchFXS when compared to other wrapped governance tokens. After countless hours of excellent work from the development team, we are almost ready to push native voting integration live.
We’ve processed millions of dollars worth of vote incentives over the past six months. How could we use additional DeFi legos to bring them to the next level?
Dopex’s new release, Curve Interest Rate Options (IRO), are financial derivatives where the underlying asset is the yield on any Curve liquidity pool. They’re like their TradFi counterparts, but they’re permissionless and entirely on-chain. Like traditional options, traders have the ability to purchase existing contracts or write their own calls and puts, where the writer has complete freedom in specifying strikes, spots, expiry dates, and leverage. They are the latest addition to the Curve ecosystem and make it even more sophisticated.
Why do these work?
“You say you want a re[ve]lution”
– The Beatles, 1968
A DAO is only as strong as its community, and its community derives its strength from its governance. While staking and transacting with a protocol ensures its financial posterity, few governance tools have been developed to support its on-chain life beyond infancy. We’ve written lots about the challenges in DAO governance – namely, voter apathy – and we’re excited to present some numbers that substantiate that writing below.
Seasons are relative to your position in space and time. A freezing January evening in Vancouver coincides with a blistering afternoon in the Australian desert. While the bears up north are left hibernating, those down south rampage about.
The same can be said of DeFi and CeFi. As highlighted over the past few posts, innovation in decentralized finance continues at a blistering pace, much of which is due to the seminal “Gauge System” pioneered by Curve Finance.
The idea is simple: instead of emitting inflationary tokens to arbitrary liquidity pools, the DAO decides which pairs are most warranted to receive rewards. Furthermore, one can only participate in this governance process if they “vote-escrow” their tokens, locking away the liquidity for a period of time. The longer you lock, the more power you get.
The result? A healthy “gauge economy” on Curve, filled with many different liquidity pools that each vie for a share for CRV emissions.
DeFi winter is coming, they say. Macro conditions are at a crossroads, and some of the largest crypto lenders and funds have gone completely underwater. Many people have called the last few weeks “crypto’s 2008.” Indeed, perhaps winter is already here. Hope has faltered in the realm of crypto’s town hall: Twitter, and trial and tribulation beset the countless contributors who left their conventional careers to experiment with DAOs.
But cold as it may be -- building continues.
For it is not decentralized finance that is faltering. It is the opaque, centralized gates into DeFi, which we call CeDeFi, that are experiencing systematic contagion and collapse. Uniswap, Aave, and Frax are all proceeding according to plan. The trusted loans that broke the lender’s back in ordinary web2 businesses were programmatically prevented on-chain, and indeed, web3 innovation continues to happen at breakneck speed. While cadres of suit-clad financiers scramble to alleviate their impending insolvency, the Frax and Curve DAOs have just partnered to shift the paradigm of decentralized liquidity.
Frax and Curve: the hub of DeFi
DeFi governance is expensive and time-consuming.
It’s bad for the small fish: on-chain voting costs money every week, pricing out anyone who can’t afford Ethereum’s volatile gas prices. Additionally, vote-escrowed tokens, the most popular governance design today, don’t allow for vote delegation, creating an enormous problem of voter apathy and burnout.
It’s bad for the big fish: large institutions who hold fiduciary obligations to investors (which demand reasonable liquidity) can’t meaningfully participate in governance without mummifying their position. Onboarding meaningful amounts of capital into DeFi governance tokens is almost impossible if an investment partner must decide between 1) virtually no intrinsic yield, or 2) virtually no liquidity.
Everyday life is filled with problems. Lenders are insolvent, dollars are inflating, and the very foundation of web3 is being ridiculed by some of the world’s biggest leaders. But while Crypto Twitter is more bearish than ever, builders across the ecosystem are still heads down creating the future. There is noise in the signal if you listen closely enough.
For example, classical election systems are opaque and ripe with controversy, but individuals and institutions are actively designing digitally native governance that remedies many of these problems. Blockchains are the free market’s ultimate sandbox, and while none of these novel economic or governance protocols have scaled to a trillion dollars or a billion users, progress is certainly abound. Lots is left to be done, but we’re to help.
What is Pitch?
Pitch is a DAO that builds governance and economic infrastructure for web3. We have become one of the space’s biggest liquidity incentive platforms in web3 since our February 2022 debut, processing millions of dollars of rewards for the FXS and CRV ecosystems.