Vesper Finance AMA Summary
by Kamil S
Coinmetro CEO Kevin Murcko and Vesper Strategy Lead Zane Huffman answered questions about cryptocurrency, blockchain, & VSP! Here’s a summary in case you missed it.
Vesper Finance is a family of DeFi yield-aggregating products. ETH, Polygon, Avalanche are some of the chains we use.
Commitment to security, multiple audits, long history in the crypto space…Vesper is designed to be bulletproof. We have a very modular engineering architecture and create more nuanced and complex strategies. All of this together more holistically positions Vesper uniquely for different endpoints: protocols, custodians — exchanges like Coinmetro.
We’re very near deployment on a multi-collateral, multi-mintage, synthetic asset platform. Meaning you can have all these different coins posted as collateral and we can produce all these synthetic outputs. The reason for this is there are a lot of non-Ethereum native tokens and there is an appetite for them to get access to DeFi yields. We can do that. We also have a lot of tools to help you go cross-chain. Stay on the cheap chain, manage your position, enter and exit, and you can still get the premium yield that typically requires premium gas.
Engineering is focused on more products and improving what we have. Vesper needs to be sustainable where coins can continue to earn good yield, indefinitely.
Because it’s so composable, modular, and easy to integrate, our entirely separate business development teams are getting integrations where Vesper is like a DeFi middleware engine connecting different institutions, custodians, etc.
Vesper is multi-chain enthusiastic. Vesper wants to be poised to service all of these different chains. Our cross-chain ambitions mean that we can go to chains that don’t necessarily have a big DeFi platform, (e.g. Harmony) and we can then send it over to big DeFi hotspots.
Situated for both futures:
- Cross-chain without having to do individual work on each chain.
- If all of DeFi does coalesce on one chain (e.g. ETH Mainnet) – with our modular backend – every time there’s a new DeFi endpoint, we can build out support and match it in everything else.
We would love to have all of our tokens be offered on Coinmetro and other exchanges. Where our fit lies is, ‘I’m a user on Coinmetro, I’m holding these tokens and I can also go out and earn yield on them.”
If it is supported by any of our existing strategies, then we can support it. Last couple of months we have started to build out our business development operations with new partners and worked on creating pools.
Vesper has a performance fee which is if pool gets yield, we also get some of it. Furthermore, with the withdrawal fee, we also take a bit of it. We are planning to restructure to having one fee, which will only be taken on the earnings and in a much more modest way.
Why Vesper instead of a stablecoin? Good sustainable yield that is boosted and if you hold the VSP token you can deposit it and earn a share of the revenue as well.
Now that we have Vesper Staking, it will be quicker to add more pools that Vesper supports.
In Grow pools, you deposit an asset and earn more of that asset. In Earn pools, you deposit an asset and the yield converts to another asset. Earn pools route through Grow pools. For example, the Earn DAI pool ETH routes through the DAI Grow pool. In terms of yield sources, we focus on high TVL, a lot of time in the market, secure, our own due diligence, strategies being audited. At the end of the day, it’s all conservative, secure and sustainable.
Revisions to the Tokenomics (vVSP)
The way that vVSP works now: you deposit, 24 hours lock-up, you get more VSP and there are no restrictions on it. The APY fluctuates allowing people to hop in and hop out. We want to prioritize long-term users of the ecosystem. With vVSP, we want to transition into some type of model that combines what Curb and Convex do into one. Lock-up for some duration, increasing weight depending on lock-up, but also the ability to transfer to other accounts and trade on other markets.
In terms of the decentralization plan, automate whatever we can automate. Everything is autonomous on VSP, except two things:
- Pulling API calculations and taking those and passing it into a rebalance action on the blockchain.
- The other part is how Vesper continues to improve and grow and we see that as differentiating the things we do into work-streams: marketing, engineering, growth, community, etc.
Having the token holders having some form of responsibility to assess what those work-streams are doing, how they are being compensated, etc. We want to remove the human element as much as we can.
It will reduce the volatility. Removing withdrawal fees for pools means we are earning pretty consistently on TVL across the board. In terms of having it so that there is a lock-up element, it reduces the flow to VSP. Both of those combined will give us a more predictable APR.
When you deposit different assets, it goes into a contract and that sends to other contracts to earn yield and compound or convert. The way to know how many tokens of those you control is by having vXYZ tokens. Basically, it is a receipt saying “I own this much of the pool”.
Uniswap V2 uses it, pretty common. Not necessarily something you need to actively manage. When you deposit you have the same number of v ‘whatever’ until you withdraw. What it does unlock is that if you tokenize your position you can also integrate into something else.
There could be a future where a vUSDC position is collateral for another token and you could still get yield on that collateral and go use it as something else.
We can have an Earn pool that pays out in that token. We have a DAI Earn pool that enables you to earn fractionalized cryptopunk tokens. You can yield your way into a punk. If it is the output, then it is easy to do but if it is the input, it needs to have some yield source.
Thanks to everyone who joined us. We’ll see you next time! Make sure you’re subscribed to the Coinmetro YouTube channel.
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