March 2023: Community Update
TLDR: Protocol launch went well, as shown through key metrics:
- lvUSD/3CRV Curve Pool: ~$6.8M TVL and ~27% average APY
- Borrowers / Leverage Takers: ~$4M in TVL and ~130% average Gross APY
Now, At Archimedes, it is a moment to learn, plan, move fast (and repeat), together with our community of G(r)eeks.
Fellow G(r)eeks, it’s been a rewarding month for both Archimedes and our community. We’re thrilled to provide you with the first update following the Protocol launch. As much as we are excited about our successful launch late in February, we also understand this is just the beginning. And for us to continue building a successful protocol, we listen to our users, and learn, while “devs do something” (aka, move fast). With that in mind, we focus this report on those aspects.
Let’s take a look at what we were able to accomplish in our first month of product being live:
- Successful launch: Both our novel Leverage Engine and Dynamic Emissions have worked as designed, with no unexpected behaviors. Both lenders and borrowers of Archimedes are earning top of market yields, with March averages at 27% APY and ~130% Gross APY respectively.
- State of Lending: We currently have ~$6.8M in our 3CRV/lvUSD Curve pool, and we continue to grow with consistent top of market APY. Our curve pool has largely remained balanced.
- State of Borrowing: We have had 11 Rounds of Leverage to date and have had 35 users taking leverage with a total sum of ~4M lvUSD (leverage) taken and, as expected, no liquidations have happened. We anticipate that we will be able to provide statistically significant data on returns and APYs in the next updates. We are currently offering leverage readily when available, with discounted fees on Mondays and Thursdays.
- SVB/Signature/Other Bank Runs and Stablecoin deppegs: As much as we are sorry for the DeFi users and projects seriously impacted by this event, we are happy to inform you that our ecosystem remained resilient throughout the stablecoin depegs. We would like to highlight two main observations from the event:
— Arbitrage Opportunity for Borrowers: As a first learning for us and our users, with the stablecoin depegs, users closing their positions during the widespread depeg weekend were able to enjoy APYs of 3 to 4 digits. Our team also explains how a user can take advantage of this strategy here.
— Liquidity Impact: Our lvUSD stablecoin in our Curve pool followed similar pegging behaviors to USDT and OUSD, regaining peg quickly after a few days. We also lost ~50% of liquidity in our Curve pool, which we have already mostly recouped.
- Community: Our community gave us great deals of feedback, both constructive and positive. We continue to listen to our users and our wider community, so that we can build better. The Archimedes core-team is tirelessly prioritizing and working on the feedback we receive from you all! Join our Discord and see our latest announcements for a detailed update and to provide us with your input!
Now with full context, we can dive into the major learnings from our first month.
What have we learned?
Thanks to our community of actively engaged members, we were able to talk to more than 15 users over the last month, to gather detailed feedback and insights about their experience with Archimedes. We have learned a great deal from you and we really appreciate it!
You haven’t had the chance to tell us what you think yet? There are a few ways to do so:
- Tell us about your experience with Archimedes in less than 2 minutes: here
- Submit suggestions, here: https://archimedes.nolt.io/
- Prefer a more personable approach? So do we! Join our Discord, submit your suggestion there or reach out directly to the team.
- Schedule time with our Head of Marketing & Business Development
For borrowers, Archimedes has launched its first strategy with OUSD. Our OUSD strategy includes: no liquidation mechanism, leverage of ~9.7x, Gross APY of ~45–130%, position lifetime of 370 days, and relatively longer lockup periods for relatively low risk.
Based on user interviews and behaviors, we quickly learned that:
- Our User Interface introduced unnecessary complexities for the user.
— Devs did something: We have significantly simplified the UI and we continue to work on and release improvements
- As much as OUSD enables a relatively low risk leverage strategy, users are not willing to stay locked for long periods in DeFi.
— Devs did something: We have adjusted our position lifetime from 370 to 31 days as well as the fees accordingly, with two leverage rounds run with that new configuration
- For the following, Devs are doing something and we’ll discuss later in this report:
— Additional and more familiar assets will drive more demand
— 10x is too risky for some users
— Despite the intrinsic relatively higher risk, assets with higher APY will likely attract more users and will enable a more sustainable marketplace with real yield
— L1 is expensive for most users
For liquidity providers (LPs), Archimedes has launched a Curve pool with weekly ARCH rewards based on our Dynamic Emissions, returning 15–100%+ APY to LPs, with average return of 27%.
Similar to borrowers, our LPs gave us some insights on how can build better:
- You’re a newly launched project, which naturally introduces more risk for LPs
— Nothing devs did or can do here besides consistency! And we have shown it so far as you can see in the yield graph above.
- For the following, Devs are doing something and we’ll discuss later in the report:
— Diversified rewards will help attract more LPs
— There is no reason for me to hold Arch and I just sell it the moment I get it
Archimedes has launched the ARCH/USDC Uniswap V2 pool as well as on MEXC. ARCH has been used as the ticket to access leverage.
Our users gave us some great feedback on the ARCH token, for which Devs are doing something and we’ll discuss later in this document:
- Get into additional CEXs
- Develop additional utility for ARCH
- The circulating supply is low
- Potentially do an Airdrop
What is coming next?
As we move towards V2, our users’ voice is key in our prioritization process. With that said, our team is currently working on improving the product for all stakeholders involved: lenders, borrowers, and ARCH holders.
We are currently working on incremental changes and on our V2.
With the intent of moving fast, there are changes that require little to no engineering, and therefore less code audits and faster turnaround time.
With the intent to move fast, we’re working on:
- Adding more CEXs will help deepen liquidity of ARCH in the market
- Researching, considering, and scoping additional utility for ARCH:
— Providing ARCH as a reward for ARCH/USDC Uniswap v2 LPs or a different pool (Curve or Balancer)
— Creating a veARCH mechanism for ARCH staking
— Allowing ARCH staking to give boosted yields
- Potential Airdrop: The DAO may consider an airdrop in the future
- Diversified LP rewards: Deploy partnerships with projects such as Beefy, StakeDAO, etc.
- Opening new Liquidity Pools for both lvUSD and ARCH in Curve, Balancer, etc.
With the objective of improving Archimedes scalability, our team has already started refactoring our code, but we are also working to add new things:
- Adding new strategies for borrowers with higher APY than we can currently offer, such as: Convex pools such as stETH, FRAX, sUSD, alUSD, etc. This will not only make our yields more attractive to borrowers, but also for lenders from diversified real yield.
- Ability to change their leverage multiplier to lower (or higher? 😮) multipliers.
In addition to those, we’re also considering other changes down the road, such as going to more affordable chains (L2s). The list can be long and the team will continue to listen to user’s feedback to make the best decisions for the ecosystem as a whole. The Archimedes team continues to work hard to improve the product and the user experience, for glory.
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Learn more about the Archimedes project and how it generates real, stable top of market yields for users by visiting https://archimedesfi.com/ and following on Twitter, Discord, and Telegram.