What problems is izumi solving for Uniswap V3?

LPosted on Bybit in December, izumi finance is the first programmable liquidity mining protocol that optimizes liquidity allocation and allows the protocol to accurately and efficiently deliver rewards at certain price ranges. A week after the release on Polygon in January, his USDT/USDC group grew to provide 70% TVL for Uniswap.

Promising iZi, the protocol token grants users veiZi, and holding veiZi generates up to 2.5 times more incentive in Uniswap V3 liquidity mining. In addition, it is possible to participate in the governance of the DAO initiating votes or proposals.

In this article, we will explain the unique features of izumi. DeFi model and how the protocol managed to grow so quickly.

How izumi solves Uniswap V3 pain points

Uniswap V3 was hailed as a great update to Uniswap because LP tokens were replaced by LP NFTs for liquidity mining. The liquidity provided by LP is limited to a certain price range, from zero to infinity.

Uniswap V3 allows users to centrally provide liquidity and improve capital efficiency.

However, the cryptocurrency market is highly volatile and most liquidity providers cannot keep track of the LP price range to adjust. This leads to impermanent loss. This is one of the reasons why Uniswap V3 has yet to overtake Curve.

This is how izumi intends to solve this problem:

fixed range which solves the liquidity problem of stable coins and anchor the assets in the Uniswap V3 range.dynamic range solves the problem of low returns for liquidity providers on Uniswap V3 by allowing users to offer liquidity with a dynamic price range.A side opens liquidity withdrawal in half LP token (e.g. USDT) and deposits the other half (iZi) to izumi LiquidBox for staking, reducing temporary losses.C-AMM Bridge it is a cross-chain feature that will be released soon. Supports multi-chain users to test Uniswap V3 LP NFT token liquidity mining, improving capital efficiency for higher returns.

Statistics about izumi

At this point, based on data from DeFi Footprint 360 (Project Operation Data Analysis Dashboard), I will analyze izumi’s TVL distribution across different public chains and LP token pools, as well as its user and competitor data.

1. TVL Distribution

izumi TVL is concentrated on two public chains, Ethereum and Polygon. Ethereum TVL is about $13 million, or 66.7%, while Polygon TVL is about $6.5 million, or 33.3%.

In terms of specific models, Liquidity Mining provides TVL primarily from fixed range and dynamic range models. TVL for Farming is higher than Staking (One Side).

– Agriculture: fixed range and dynamic range

izumi has amassed $19.50 million in TVL in less than 90 days since its launch. iZUMi’s USDT/USDC Farm Pool TVL on Polygon has reached $6 million, which is more than 70% of the total USDT/USDC TVL on Uniswap V3 Polygon.

Footprint DeFi 360 – Liquidity by ChainFootprint DeFi 360 – Top Pools by Liquidity

– Stakeout: One Side

You can commit to having iZi to earn rewards according to the One Side model.

In terms of public chain distribution, iZi primarily engages on the Ethereum chain, which is the opposite of Farming. The main reason for this is that the gas fee at Polygon is lower, which makes it easier to extract liquidity mining revenue.

As for the distribution of users that promise iZi, it is mainly concentrated on Polygon, with relatively few players on Ethereum.

Of the pool equity distribution, the USDC/USDT pool is most popular. There is more than $870,000 of iZi pledged in the Ethereum USDC/USDT pool.

8% of Ethereum users compromised more than 93.65% of iZi. It could be inferred that most Ethereum whales have large amounts of iZi. He deposited a large capital for the model.

Footprint DeFi 360 – Total Stake by ChainFootprint DeFi 360 – Total Stakers by ChainFootprint DeFi 360 – Top Pools by Total Stake

2. User data

In February, izumi attracted more users by posting tasks to capture flow, but user retention showed a small amount of churn.

In terms of chain distribution, fewer users on Ethereum, mainly big whales. More users on Polygon with the most general players.

DeFi Footprint 360 – Total address per chain

– New directions

As an emerging project, izumi’s general user growth trend is upward. In February, 99.54% of the growth came from Polygon.

Footprint DeFi 360: Number of new addressesFootprint DeFi 360: Percentage of new addresses per chain

– Active addresses

Judging by the active addresses, users are concentrating on Polygon. Mainly, Polygon users are quite active in February. This is roughly similar to user additions and farming growth.

DeFi Footprint 360 – Monthly Active Address by Chain

– Value of transactions per active address

Monthly transactions per active address show a decreasing trend. The main volumes are the result of the whale activity on Ethereum in December. Since January, retail investors have been active but trading in small amounts.

DeFi 360 Footprint: Number of monthly Txn value per active address

3. Competitors

Uniswap V3 Liquidity Providers suffer from large temporary losses, the most prominent problem today. according to a study Per Topaz Blue and Bancor, more than 49% of liquidity providers lose money on their investments in 2021 due to temporary losses.

Many Uniswap V3 liquidity management protocols have emerged to address temporary losses, including izumi. Other examples include Alpha Vault (Charm Finance), Gamma (formerly Visor Finance), and G-UNI (Gelato Network).

– The key features of the protocols are as follows

Alpha Vault (Charm Finance), is the first Uniswap V3 liquidity management protocol. Automation of liquidity rebalancing management.G-UNI (ice cream network) converts Uniswap V3 LP NFT tokens into replaceable LP. earning rewards by mining on Uniswap V2.

Spectrumformerly Visor Finance, implemented active liquidity management in Uniswap V3 to reduce LP token slippage.

izumi financethe first programmable mobility management protocol Uniswap V3.

– TVL Contrast

The highest TVL protocol is G-UNI (Gelato Network) at $580 million, followed by izumi at $19.50 million. Gamma is in third place with $11.17 million ahead of Alpha Vault’s $8.41 million.

Footprint analysis: Gamma TVL, Alpha Vault and G-UNIFootprint DeFi 360: izumi TVL

4. iZi Token

The price of iZi is trending down, which is related to the current general downward trend of cryptocurrencies and the impending bear market.

The token price fluctuates around $0.05 and the trading volume stays at a daily average of around $160,000.

Footprint Analysis: iZi Price and Trading Volume

Some thoughts

izumi’s user growth is concentrated on Polygon rather than Ethereum, and farming remains more popular than staking.

izumi You might consider integrating with a public chain like Solana for a lower gas fee than Ethereum. Perhaps, the C-AMM Bridge model will be a useful innovation once it is released.

Date and author: March 16, 2022, Grace

Data source: footprint analysis izumi finance dashboard & DeFi Footprint 360

This piece is contributed by footprint analysis community.

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