Open-source software is a growing industry that allows forks to be easily made. “aggregation theory” — the investor thesis that the winner should build on top of and integrate as many applications as possible — caught on as a promising idea during DeFi summer.
Middleware DeFi Aggregators like 1inch (formerly Oasis), Matcha (formerly Oasis), and Instadapp all have pursued the idea fully, but this theory hasn’t worked out for most (Jupiter is one exception in Solana World).
Ethereum DEX aggregators, despite theoretical expectations, haven’t outcompeted Uniswap.
Instadapp is one of these DeFi aggregators that was built on the top-notch DeFi protocols such as Uniswap Maker Aave Compound Curve.
Instadapp, after spending two years developing the product, has reinvented. Instadapp evolved from being builders of an aggregator to become a platform, with a DeFi-ready product. Fluid. Instadapp’s original Instadapp remains separate as a yield-aggregator.
Instadapp’s pivot has been quite successful: Fluid currently has $1.2 billion in TVL across its money market, while the Fluid DEX on Ethereum is seeing about $428 million in 7-day trading volumes — currently the third-largest DEX behind Curve and Uniswap.
Take a step back for a second. What is fluid?
Fluid is a whole ecosystem of superapps, not just one. The protocol’s foundation is Fluid’s liquidity pooling layer. On top, it has its own DEX application (launched early November), a money market app and many other vault apps.
Fluid’s suite is heavily influenced by DeFi’s tried and tested primitives. These include Uni v1 auto-rebalancing, Uni 3 concentrated liquidity, Aave’s rate of utilization curves, Maker Vault’s debt limits, etc.
But it also brings to the table a slew of original DeFi innovations — namely more capital-efficient ways of liquidity provision — through its “smart collateral” The following are some examples of how to get started: “smart debt” features.
As an example, Smart Debt allows the borrower to convert their debts into trading pair as liquid for a fluid DEX trading pool.
So, on Fluid DEX traders can make trades between assets when someone else is in debt. The borrower can continue to maintain a loan, while also earning trading fees that offset their original debt.
To sum up, “smart debt” Creates liquidity the opposite of how it is normally done, by having LPs deposit their liquidity and then receive a token from an AMM (i.e., LPs would seed liquidity with two tokens before receiving an LP).
Trading pools such as USDC/USDT that have $20 million in liquidity and are technically worth zero TVL, but which actually represent $0 USDC/USDT on Fluid DEX.
“Smart collateral” On the other hand, LPs can take their LP position from lending and rehypothecate it as collateral for AMM liquidities on the Fluid DEX. This will allow LPs the opportunity to earn DEX Trading Fees on top of their lending fees.
This is not technically new — DEXs in the past, such as Cream Finance, have experimented with enabling the use of LP tokens as collateral — but Fluid is managing to execute it more efficiently.
“In Fluid DEX v2, we plan to allow users to select their ranges on both collateral and debt, which will be a breakthrough,” Blockworks has spoken to DMH, the chief operating Officer of Instadapp.
Fluid’s Governance is determined by the token INST. It has been a long-time dead token until the recent pump of 4x in the past month.
The new governance proposal that was published yesterday seeks to convert the INST liquid to FLUID with a 1:1 conversion ratio, without any dilution of total supply or alterations.
After reaching a revenue target of $10,000,000 annually, Fluid will launch a token-buyback program in order to increase the value of tokens.
The proposal would also spend an additional 5% tokens on FLUID liquidity, and 12% to pursue CEX listings and market-making.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
