Bunni liquid locker Liquis has recently announced an impending airdrop to swETH holders, with more details to follow shortly.
In this Twitter Space, we were joined by Scholar from Liquis for a discussion about our collaboration, how to boost your swETH yield, and the future of LSTs.
In case you missed it, here are the top questions from the event.
What is Liquis?
Liquis is like Curve's Convex for Bunni, which is a liquidity provider built on top of Uniswap v3 that Swell users may be familiar with.
In the past it was hard for upcoming protocols to build substantial liquidity on Uniswap v3 because they could not incentivize it, and if there is no liquidity there is no volume. To be able to democratize this efficiency of Uniswap v3, the Timeless Finance team, which is the team also behind Bunni, built the same model that helped popular liquidity providers such as Curve and Balancer to grow on top of Uniswap.
As a protocol built on top of Bunni, Liquis users can allocate their LIT tokens to the team and receive the liquid version of it called liqLIT. This liquid token earns the real yields that you earn on Bunni without being locked in, meaning that you can sell it at any point in time.
What brought Swell to Liquis?
One of the benefits of Liquis that is potentially overlooked is their tokenomics model. Liquis uses a flash loan system to execute the options on behalf of users and returns a more conventional yield to users than they might be used to.
How does swETH fit into the picture and what pools are available on Liquis?
Upon launching, Liquis set aside 10% of the token supply to give away to protocols who are currently integrated with Bunni or will be integrating in the near future. As a launch partner, Swell is amongst the list of protocols that have received an allocation of the token supply which is able to be used to vote and drive emissions to swETH pools.
On the Liquis app, you will be able to see two swETH pools as well as the GRAI/swETH pool. For users to be eligible for the upcoming airdrop they will need to LP in one of these swETH pools and stay in the pool for 30 days from the official campaign start date. Stay tuned for more info on this.
All swETH pools on Liquis are also eligible for pearls in the Swell Voyage.
What makes Bunni and Liquis well-suited to LSTs?
One thing an LST protocol absolutely needs is liquidity. Uniswap is one of the most efficient platforms to build liquidity on because it can bring high levels of concentrated liquidity from day one.
Players like Swell can greatly benefit from building liquidity on Uniswap, and that is why we are well suited for not only Swell, but other LSTs to build on.
What is Swell’s liquidity strategy going forward?
Swell holds a thesis that the requirements for swETH liquidity will go down once withdrawals are enabled. At the moment we have been very vocal on our push around liquidity because users need to be able to exit their position. This is something we are trying to facilitate through the secondary market however once we have the withdrawal feature live that requirement reduces.
At the moment users can buy swETH at a discount on the secondary market but once we enable withdrawals in Q1 2024, users will be able to claim that underlying ETH 1:1, making the liquidity requirements a lot easier for Swell.
Thank you to everyone for attending this Twitter Space.
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