I’m proposing to buy $50k of LFNTY at the IDO. They wrote an extensive report and analysis of their platform and tokenomics in a series of 6 articles, starting with this one.
Here is also an infographic summing up the key parts.
In a nutshell:
- Lifinity is an innovative approach to AMMs, combining an uniswap v3 AMM with an oracle, essentially moving the range in line with oracles to minimize impermanent loss
- their approach was also mentioned by MGNR (large crypto market maker) as a very innovative and effective take, in this thread
- because of their highly concentrated liquidity and high capital efficiency, they are able to capture large volumes with relatively little TVL. This creates very high farming fees without the need for liquidity mining
- The tokenomics are mainly focused on transferring liquidity from external LPs to protocol-owned, rewarding veLFNTY holders. They use a voter-escrowed system to distribute fees and “bribes” from external protocols looking to use their liquidity system. The POL also makes it harder to fork them
- The team is clearly very competent as they built one of the few really innovative protocols on Solana. They also improve further their system, e.g. by adding dynamic fees based on volatility (link)
With regards to locking, there is an obvious advantage in locking for longer period (a discount up to 50% is provided for 4 year locking). At the same time, the 20% allocation of the team has a 6-month cliff and then linear unlocks which could put some sell pressure. A lockup of 6months would provide only a ~6% discount vs the unlocked price.
Finally, Lifiinity is still a “young” project and, as we all know, things in this industry can change dramatically quick, and locking up our tokens would deprive of optionality in how to adapt to changes.
Given the above, I propose we deploy $50k from our treasury in the IDO but do not lock them as ve LFNTY.
Agree not to lock the tokens
Following up on this proposal to suggest we increase our position on LFTNY. While the token has decreased around 50% from IDO (in line with the rest of the crypto market), the protocol has kept growing and generating revenues. Even with little TVL they manage to be among top DEXs on Solana, for example the SOL-USDC pool with just $1.5m in TVL had a 24h volume of $3m.
In the past months they have generated around $150k in revenue per month, which translates to around $1.8m of annual revenue vs ~$40m FDV.
Moreover they have also several partnerships in places where Lifinity provides their liquidity/market-making infra to projects to bootstrap liquidity, for example Marinade, Lido, and UXD.
Also, contrary to many other protocols, there is a clear link between revenue and token as the revenues are distributed in part to those who lock tokens and part to buy back tokens. For example:
Finally, I would also buy some Flares NFT which were used initially by the protocol to bootstrap liquidity. These are bought back using trading fees from that capital + royalties and can be staked to obtain LFNTY which was reserved for NFT holders and will be distributed until May 2023. Given that not a lot of flares are staked it seems a good way to lower our cost basis and even after the staking is finished there will still be buying pressure from the buybacks.
I’m not sure if I missed the vote, but I support deploying more. This seems like one of the more legitimate programs as there seems to be real revenue (not so quasi self-minted token) driving distributions.
Thanks, we haven’t voted yet as a couple members of the community wanted to do more due diligence
I think we left plenty of time for due diligence. I would suggest 1000 SOL to be deployed with a max of 5 flares and then rest in LFNTY, subject to liquidity
Yes I agree, maybe can DCA some LFNTY over 1 month or so just to make sure we minimize the risk on the entry point