Hi Index Community!
This is Brian from Visor Finance, and I wanted to get the community’s response for utilizing Visor Finance to conduct liquidity mining on top of Uni v3. I understand based on a prior post by @overanalyser that liquidity mining on DPI-ETH is tapering down, and that the plan was to use a short v3 staking contract. However, I just wanted to get our proposal out there, if not for the DPI-ETH pool, then possibly for future products down the road as we believe our product will provide the better experience for the team and the community.
This proposal from Visor Finance offers Index Coop the ability to conduct liquidity mining and liquidity provisioning on Uniswap v3 through Visor Phantom, which is an enterprise-level tool suite for managing and incentivizing liquidity on Uniswap v3.
Visor Finance actively manages liquidity on Uniswap v3. An LP simply mints a Visor Vault NFT and deposits the base assets of an LP pair into the vault. There is no need to deposit the LP tokens, and by simply depositing assets into a Visor Vault, the LPs permission Visor do the rebalancing and optimization automatically on Uni v3, saving both time and gas fees.
Visor additionally funds a research organization called Gamma Strategies (https://www.gammastrategies.org/) which is dedicated to researching optimal strategies on Uniswap v3.
Visor Phantom’s enterprise-level tool suite allows any DeFi project to co-manage and incentivize liquidity on Uni v3 with Gamma Strategies. The strategies implemented are flexible and tailored to the particular wants and needs of individual DeFi projects. The Index community and team will also have the ability to sign off on any strategy that is being employed as well as manually control different aspects of the strategy such as rebalancing, fee collection / re-investment, and liquidity mining emissions.
The problem is that the current infrastructure (Uniswap v3 Staker Contract) for liquidity mining is disadvantageous for the following reasons:
1. Manual Price Range Management: LPs need to manage the price range themselves, and will NOT earn fees or liquidity mining rewards if the current price is not within their specified price range
2. Manual Compounding: The Uniswap v3 staker contract requires the LPs to manually collect fees and re-invest those fees back into position, incurring gas fees in the process
3. High Gas Costs: Index Coop LPs need to pay for gas when (a) providing liquidity on Uniswap v3, (b) staking / unstaking LP tokens, (c) claiming rewards, (d) rebalancing positions, and (e) collecting & re-investing fees back into the LP position. This is likely the main drawback to the Uniswap v3 Staker Contract
Visor Phantom offers Index Coop a user-friendly way to collect & re-invest fees, rebalance positions based on guidance from Gamma Strategies, and/or rebalance positions based on strategy endpoints on behalf of all of the LPs.
These functionalities can be easily accessed by the team by simply sending commands through a Telegram bot. Additionally, the price ranges will be co-managed by Index Coop and Gamma Strategies, and Index Coop will be able to sign off on the strategy being employed through the Visor Phantom tool suite.
Visor Phantom’s liquidity mining layer will also allow for gasless subscribing to liquidity mining rewards.
To summarize, Visor Phantom offers the following advantages:
1. Automated Price Range Management: An automated strategy (co-managed by Gamma Strategies & Index Coop) will manage price ranges so that liquidity is placed in optimal fee earning position, and LPs do not need to monitor and manually adjust the position themselves
2. Automated Compounding: On a regular basis, fees are collected and rebalanced back into position on behalf of all the LPs, saving them significant gas costs and allowing for a more profitable strategy
3. Significant Gas Savings: LPs pay for gas to deposit & withdraw the base assets on the Visor interface. They can gaslessly subscribe to the Index Coop liquidity mining program and because the gas fees for rebalancing, fee collecting, and re-investing is split amongst all the LPs, there are significant gas cost savings for each liquidity provider
We propose using Visor Phantom for Index Coop’s liquidity mining program for the DPI-ETH pool, but if not, then potentially for a future Index product down the line.
I’m happy to gauge the community’s thoughts and would love to stay in touch going forward.