Get ready for #Cosmos growth in 2023! Levana is excited to be a part of this adventure. The Levana path to launch is clear, and you can read our blog post blog.levana.finance/levana-in-2023… or scroll down below to learn more about Levana’s exciting plans for 2023
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This tweet thread is long, touches on a wide variety of subjects and is targeted to a few different audiences: Cosmos Bulls, Perps enthusiasts, NFT fans, GameFi fans, and scifi/fantasy geeks.
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For the best experience, you may prefer to learn more via these blog posts
2023 General Levena Update (start here) blog.levana.finance/levana-in-2023…
NFTs and Perps - blog.levana.finance/nfts-and-perps…
Levana vs Other Perps - blog.levana.finance/levana-estimat…
Levana Side Projects - blog.levana.finance/feb-2023-updat…
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2023 General Levena Update (start here) blog.levana.finance/levana-in-2023…
NFTs and Perps - blog.levana.finance/nfts-and-perps…
Levana vs Other Perps - blog.levana.finance/levana-estimat…
Levana Side Projects - blog.levana.finance/feb-2023-updat…
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If you prefer to learn more via a video or audio message, stay tuned, there will be a Twitter spaces and youtube video which will cover most of these topics
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Outline:
Year end summary 6-9
Levana’s Progress 10-22
Levana Perps vs GMX and others 23-47
NFTs and Perps 48-56
Other Levana Projects 57-68
Path to Launch 69-75
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Year end summary 6-9
Levana’s Progress 10-22
Levana Perps vs GMX and others 23-47
NFTs and Perps 48-56
Other Levana Projects 57-68
Path to Launch 69-75
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2022 was a hell of a year, but we are more excited than ever for what's in store for Levana in 2023, and you should be too.
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If you are not sure what the state of the market looks like, we recommend watching this excellent update on the market outlook for 2023 from @danku_r
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https://twitter.com/danku_r/status/1605602050561101826
Internally there has been a lot of restructuring and work on rebuilding the team; marketing efforts have wound down, the headcount was reduced by 80%, and new leadership has come in to help bring the Levana vision to market.
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We come to 2023 welcoming a new project manager, head of product, head of R&D, legal team, and more.
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Levana's Progress...
Progress on building the first fully collateralized modular perps dex in crypto has been significant. You can play with the most recent beta version here on the Osmosis testnet beta.levana.exchange.
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Progress on building the first fully collateralized modular perps dex in crypto has been significant. You can play with the most recent beta version here on the Osmosis testnet beta.levana.exchange.
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We are excited to include robust features such as
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After months of limited success in attracting large traders interest to the updated Perps technical design, the decision was made to rebrand the Perps platform to focus on the needs of institutional trading desks.
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The rebranding of the Perps platform to appeal to institutional players has already shown positive results. Levana contributors are in productive talks to bring large trading desks interested in a GMX for Cosmos in anticipation of our launch scheduled for Q2 this year.
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A comprehensive risk assessment of the platform was created to highlight the various advantages for traders and liquidity providers to use Levana perps over other platforms.
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Currently, our primary focus is on bringing our perps platform to market. Levana perps is unique for a number of reasons:
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1) The biggest risk to current leverage programs is insolvency - - Levana Perps is designed to prevent insolvency through the unique design the core team has created over the last 9 months.
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2) Levana Perps will be the first to offer Leverage trading for #Osmosis @osmosiszone. Osmosis continues to grow as the central hub that binds the #Cosmoverse together.
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https://twitter.com/sunnya97/status/1621011329661259776?s=46&t=QDh2C3mliVR6cqWyU4pa_Q
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3) Levana will launch with one market: #ATOM
The plan is to add additional markets over time, but start with one concentrated market.
The choice to launch with only an ATOM market is to focus on a single pool, build liquidity and trading volume, and grow.
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The plan is to add additional markets over time, but start with one concentrated market.
The choice to launch with only an ATOM market is to focus on a single pool, build liquidity and trading volume, and grow.
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ATOM is the heart of #Cosmos, with the largest daily trading volume and as @DonCryptonium and @chjango mention in this recent interview, all entry points to Cosmos are leady by the ATOM token.
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https://twitter.com/DonCryptonium/status/1618597345360502788
4) Levana is modular, i.e. It can be deployed on multiple chains simultaneously, such as @JunoNetwork, @TeamKujira, @terra_money, @SeiNetwork, @Injective_ and more within the Cosmos ecosystem.
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5) Levana uses crypto collateral and intends to add liquid staking markets such as @stride_zone stATOM. Money markets such as @mars_protocol are already preparing this integration. On Levana you can LP, or go long/short, while getting staking rewards
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https://twitter.com/stride_zone/status/1615358655930531841?s=20&t=jSQ2UJSiRMwJxrqzNvjXtA
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6) Levana aspires to have a gamified onboarding experience that will help introduce a new audience to trading perps - this onboarding will be designed to educate users on the concept of perps, trading signals, trading strategies, etc. osmosis.crew3.xyz/questboard
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Levana vs others...
We looked at GMX, GNS, and similar networks, and we think they are a critical step forward in how Perps DEXs should be designed; we took the good and integrated it into Levana, and the bad, we worked to improve. Levana intends to be the “GMX” of COSMOS.
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We looked at GMX, GNS, and similar networks, and we think they are a critical step forward in how Perps DEXs should be designed; we took the good and integrated it into Levana, and the bad, we worked to improve. Levana intends to be the “GMX” of COSMOS.
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GMX: The GOOD
-Uses crypto collateral to reduce the risk of insolvency
-Peer vs. Pool provides a better UX for most use cases vs order books
-Able to Support any asset
-Referral Program
-NFT integration
-Fully on chain
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-Uses crypto collateral to reduce the risk of insolvency
-Peer vs. Pool provides a better UX for most use cases vs order books
-Able to Support any asset
-Referral Program
-NFT integration
-Fully on chain
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GMX: THE BAD
-Not capital efficient; many pools are <15-20% utilized
-High fees (we will address a fee comparison later in the thread)
-Contagion risk between markets because of pooled multi-market liquidity (GLP Risk)
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-Not capital efficient; many pools are <15-20% utilized
-High fees (we will address a fee comparison later in the thread)
-Contagion risk between markets because of pooled multi-market liquidity (GLP Risk)
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-No mechanism to inspire delta-neutral markets (dynamic funding rates)
-Cannot easily add new markets
-Cannot easily port to a new chain
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-Cannot easily add new markets
-Cannot easily port to a new chain
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Comparative Analysis of other popular Perps products.
It is difficult to directly compare fees between various perps platforms in the market. Still, through various spot tests and assumptions, we have mapped out the estimated fees of a reasonable scenario:
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It is difficult to directly compare fees between various perps platforms in the market. Still, through various spot tests and assumptions, we have mapped out the estimated fees of a reasonable scenario:
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Imagine you open a long perps position with $100 USD of collateral and leave that position open, paying a funding rate and/or borrow fee for a period of 7 days.
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Given various market conditions and using historical funding rates/borrow fees, we see that the actual cost of opening such a position for a week can range from $2-$20. One of the goals of Levana Perps is to provide decentralized access to perps swaps at a competitive rate.
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It’s worth noting that the numbers for GMX, dYdX, GNS, Apex, and Perpetual Finance were calculated by opening actual positions. In contrast, the numbers for Levana are projected based on assumptions that will need to be confirmed after the mainnet launch.
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Fees Estimates are difficult to get right, but there are a number of fundamental reasons why we suspect that Levana will offer competitive fees vs. other perps products. Let's break it down.
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GMX has borrowing fees but no funding fees. Orderbook perps like dYdX, Apex Pro, and GNS have funding fees but either no borrow fees or static borrow fee. Levana Perps has both, so how can the sum be lower? Let's dive in.
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First, the borrow fees. On GMX, full position size (which is scaled with leverage) is borrowed from LPs. On Levana Perps, a fraction of that can be borrowed by limiting the maximum gains (an innovative feature invented for Levana Perps).
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This, in some cases, lowers the take profit price, but this is frequently worth it, especially for high-leverage positions where the fees hurt the most, and far away take profit prices are rarely needed.
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The utilization ratio of the funds in liquidity pools is critical. Unutilized funds need to be paid for from the borrow fees of the utilized part. A low utilization ratio makes fee rates higher than necessary (UR on GMX today is high because the market is all long)
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In Levana Perps, the borrow fee rate change is defined by the utilization ratio, not the fee rate itself. This makes borrow fees sticky and allows for a high target utilization ratio even for assets with a low cost of capital.
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In Levana, borrow fee rate change is defined by utilization, not the fee rate itself. This makes borrow fees sticky and allows for high target utilization ratio even for assets with low cost of capital.
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In GMX you often see low Utilization Ratios of 10%-20% on btc and eth or stablecoins, which is just wasteful.. (when BTC/ETH UR is high, stables are low and vice versa)
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Orderbook perps have the protocol solvency dependent on the riskiest listed assets, and GMX has the LP pool impairment based on the riskiest asset. The fees reflect that added spillover risk in risk-premiums of the fees.
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Levana Perps has very separate risks between the listed trading pairs. Opening up new markets, and deploying on multiple chains means it is very important not to let the risks of some assets spill into others.
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Funding fees need to be aggressively sensitive on order book perps because of the solvency of the protocol. By extension, traders depend on the balance of the open interest. Because of that, funding rates can swing from very positive to very negative and back.
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Furthermore, artificial slippage, a Levana Perps feature designed to reduce the impact of market manipulation, is defined by the net open interest, just like the funding rates, which takes much of the burden away from the funding rates to balance the net open interest.
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There is also usually no cap or extremely high cap on the funding rates, which is required to have a chance at normalizing the protocol function in case of a meltdown of the asset price. But this does sting a lot for the losing side on the perps.
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GMX, on the other hand, does not have insolvency risks to the protocol; offloading the risks to liquidity providers doesn't have funding rates, effectively having zero sensitivity to net open interest.
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This removes a funding fee from traders altogether, but not the fee burden represented by that fee. This is because LPs take on the market risk of net open interest, and the borrow fees will be higher to cover that risk premium.
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Levana Perps takes the middle way in regard to funding rates by setting the sensitivity and the rate cap low enough to make the fees smaller and more predictable, but high enough to lower the net exposure of the LPs.
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Risks and fees go hand in hand; lowering protocol risk can lower fees!
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NFTs and Perps
Incorporating NFTs into a Perps platform has shown to be successful for GMX, dYdX, and GNS. Each has different use cases supported by community development.
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Incorporating NFTs into a Perps platform has shown to be successful for GMX, dYdX, and GNS. Each has different use cases supported by community development.
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GameFi was an integral part of Levana's evolution through DeFi. We see these two worlds co-existing in our ecosystem, providing certain premium benefits for Levana NFT holders, potentially unlocking features such as higher leverage, lower fees, and other perks TBD.
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The GMX community lead project, Blueberries, which integrates into GMX, includes an independent roadmap with features such as customization, mirror trading, exclusive Discord integration, and more.
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Similarly, dYdX’s NFTs, Hedgies are used for trading fee discounts and team-based trading competitions.
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Gains Networks NFTs, GFARM2, include a boost to LP rewards, access to trading bot APIs and spread reduction.
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While NFT with Levana Perps will start with simply hatching eggs and burning dust, the opportunity to create unique experiences for LPs and traders via NFT integration is exciting. We anticipate it will help Levana stand out from the other Perps products on Cosmos.
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Levana NFTs - After the launch of perps, we anticipate egg holders will be able to merge dust and eggs into their perps account to hatch their eggs; this will result in the creation of Dragon NFTs, which may be used for premium benefits in perps and future Levana products.
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One of the exciting things about #Cosmos is the ability to launch apps on multiple chains and still maintain interoperability. While the Levana NFTs live on #Juno, and the 1st instance of Perps will be on #Omosis, IBC NFTs means cross chain support.
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https://twitter.com/shan3v/status/1620998884297428993
To simplify the messaging around the DeFi and NFT communities, a community lead discord was created for NFT holders, and a new discord will be launched focused on traders. To stay up to date on all of Levana, join the Community Telegram group: t.me/levanaprotocol
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In 2022, Levana was working on a number of projects simultaneously: Perps, Options Trading, Comic, a Novel, Games, and NFTs.
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At the end of 2022, we started spinning out many of these projects to smaller teams that can put more focus on each one.
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Let’s look at each project and the high-level vision to create the world of Levana moving forward.
Perps - this project remains in-house and will start the audit process in Q1 2023.
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Perps - this project remains in-house and will start the audit process in Q1 2023.
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Since increasing the team focus on Perps, we have improved productivity significantly. Over the past month, considerable progress has been made on bug fixes, the Earn page, and the history page, along with a robust test kit.
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Options - This project is on hold until there is evidence of product-market fit for Perps. We love options trading but recognize that we must focus on building one product at a time.
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In 2022 Levana released 3 games for the #Juno network, and built a 4th game, Council Labyrinth. This game will be hidden in Levana Perps after launch as an Easter Egg. Prizes will be awarded to brave adventurers that find the entrance to the Labyrinth and complete the quest
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GameFi - an internal P2E game has been put on hold and will be revisited after product market fit from the DeFi applications. There are a few teams that have created proposals for a Levana-themed P2E game, but it’s unlikely that any 3rd party game will be released in 2023
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Supporting 3rd party Devs - API access is a must-have for trading desks and game devs. Levana intends to release detailed docs to build on top of Levana Perps easily. With potential to integrate gamification elements to allow users to level up and earn rewards
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Book - the book was spun out and is being completed by an independent team and will be published as an NFT independently.
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https://twitter.com/Levana_protocol/status/1566941306097647621
Comic - The comic team has been working independently to continue the story of Levana, reworking much of the existing content to create a completed first graphic novel
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While all the art so far for the comic has been hand made, as @redphonecrypto demonstrated, an amazing story can be told using tools like midjourney and stable diffusion
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https://twitter.com/redphonecrypto/status/1606442152334082048
Rekt Dragons - We are monitoring the progress of Gravity Bridge, and once there is a stable and secure utility to migrate NFTs from Ethereum to Cosmos, we will create a token incentivization program to encourage RD holders to move their NFTs to Cosmos
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https://twitter.com/StargazeZone/status/1528499825817407493
Path to Launch...
Levana Perps is scheduled to go to audit in March of 2023. It is expected the audit process will take about 2 months, and Launch of Perps would happen after a testnet trading competition scheduled for May. Dates subject to change!
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Levana Perps is scheduled to go to audit in March of 2023. It is expected the audit process will take about 2 months, and Launch of Perps would happen after a testnet trading competition scheduled for May. Dates subject to change!
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Incentivized Testnet Trading Competition - Before launch, a trading competition will happen on testnet. Prizes will be awarded, and tokens will be available for all who participate when there is a token generation event. Sign up via the top banner beta.levana.exchange
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Competitions, especially team based, have shown great ways to improve engagement. The @CurveFinance wars, and later @astroport_fi wars demonstrated that teams perform better than individuals. More recently we have watched #Juno the Red/Blue DAOs
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https://twitter.com/JakeHartnell/status/1620977121635233792
We envision a future with the addition of subsequent gamified features to encourage user engagement and loyalty around Perps.
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Token Launch - After the launch of perps, the Levana token is intended to launch, and tokens may be claimable to users that have interacted with Levana products. Dragon NFTs staked in the perps platform may be eligible for additional token rewards.
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In conclusion, the world of Levana is moving forward rapidly, with the Perps project at the forefront. The team is focused on building a unique and exciting DeFi platform that includes the creation of Dragon NFTs, token incentives, gamification, and more.
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Keep an eye on Levana in 2023 as we continue to push the boundaries of what is possible within crypto. Join our telegram group t.me/levanaprotocol and sign up for our incentivized trading competition beta.levana.exchange
Blog format here: blog.levana.finance/levana-in-2023…
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Blog format here: blog.levana.finance/levana-in-2023…
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