Sense Protocol is a new structured derivative protocol that can be used to build yield primitives. It is similar to Element Finance, Yield Protocol, Swivel Finance etc. The project is founded by Josh Levine and Kenton Prescott, both are former software developers and architects for MakerDAO, one of the oldest and most trustworthy projects in the DeFi space.
Currently Sense Space Pools are live on the Ethereum mainnet with WETH/wstETH options which you can use to earn ETH 2.0 staking rewards on your idle ETH. The pools have a cap size, so you can deploy funds there as long as the cap remains unfilled, or if it gets increased in the future!
Disclaimer: Sense protocol is a very new protocol. There is no guarantee of any airdrop or retroactive rewards. And even if there is one, it could take a very long time. There could be smart contract risks, loss of peg from using staked derivative products and other unforeseen risks in using structured defi derivative products.
Steps to deploy your funds:
1. The current deployment of Sense allows you to earn staking rewards on your ETH, leveraging Lido’s liquid Ethereum staking. For this, you will need either WETH (which you can get quickly from Metamask’s inbuilt swap feature) or wstETH (Wrapped stETH that you can obtain from Lido)
2. Head to the website of Sense Protocol (www.app.sense.finance). You can see multiple tabs - Yields, Fixed Rates and Pools. At first sight, it may look like a there are a lot of options, especially for those new to derivative yield bearing assets in defi.
However, we will see how to make the best use of the protocol as a regular defi user and deploy funds in Pools tab. Here, you can deploy your ETH while also having exposure to staking rewards as well as principle protection. You can see Spaces (sP-wstETH + wstETH pools) for various maturity terms like Jan 2023, Dec 2022, and even one for as long as 5 years - June 2027.
You can choose any pool that you want to deploy some capital into, and click on manage liquidity. For a medium term pool, we will go with Dec 1st 2022 which should expire in around 6 months.
3. In the pool page for the maturity term, we will add our WETH or wstETH here. I have some wstETH already in my wallet, so we will try to add this. You can add WETH too if you prefer.
In the dialog box, select how much of WETH or wstETH you want to add. The LP share balance and relative share will update in accordance with how much you are adding.
Once you select your contribution, you have to first approve the token WETH or wstETH as per your choice, and then click on add liquidity.
4. Once the transaction has confirmed, you can go to the Portfolio page from the top and see your current positions.
That is all, you have now added liquidity to the Sense Space pools!
Wen token? Be prepared to wait!
Note for airdrooop hunters: Sense Protocol is backed by big VCs like Bain Captal, Dragonfly, TheLAO etc which indicates the potential for a governance token in the future. However do note that the team repeatedly says that there are no plans for airdrop or retroactive rewards.
The devs have discussed a governance system that can replace the core team in the factory onboarding process for new yield bearing assets.
It would make sense to pool funds here if you have spare capital to deploy with a long term view. A similar primitive product developed by Element Finance had a token airdrop recently but had filtered out those with low volume deposits.
