How’s your bera market, folks? We at Mellow think it’s a great time to build and focus on tech.
Our main goal is to create a robust ecosystem for building DeFi strategies — provide users top-notch safe yield-generating products built on top of Mellow and help other protocols to get sustainable funds and pools management.
Sooo… The Day is coming! Yes, we’re ready to show you what our team has been building for more than a year. We’re announcing Mellow Protocol launch!
The protocol is deployed and will be launched for the first users on November 17th.
Mellow will be available on Ethereum mainnet first.
We want to bring the best experience to our users and will start with limitations that will help to gather feedback and make the launch more robust.
Here’re the raw facts:
- Date — November 17th
- Initial TVL limits — 500k per strategy, will be increased gradually after the launch
- Gated access — LobsterDAO NFTs and DegenScore Beacons holders
- Gated access period — ~1 month
At the launch, strategies with completely different approaches will be available — Boosted UniV3 and Fearless Gearbox. Also, Mellow already has a strategy built on top of the protocol by Voltz Protocol — Mellow-Voltz LP Optimizooor, we’re excited that our vaults already help other protocols to build their strategies.
Consider UniV3 ETH/USDC 0.05% pool and assume we’d like to put our liquidity into the [1000, 2000] price range (we refer to it as the Domain price range). How can we do better than just providing it directly into the pool?
The trick is to put only a tiny portion of liquidity into a really narrow price range earning the same fees as direct providing. As soon as the price risks going out of the narrow range, rebalance the interval to cover the price safely.
The liquidity requirements for UniV3, in this case, are significantly lower. The rest of the liquidity is allocated to Yearn. Thus the overall returns are higher for the UniV3 Boosted strategy.
Concentrated liquidity and swaps risks
The strategy has the same risk as the underlying UniV3 position with the Domain price range with one exception: if the rebalance happens when the price is out of the narrow price range. In this case, there are two key differences:
- Boosted UniV3 swaps at a better price than UniV3
- UniV3 gets fees for the swap, Boosted UniV3 pays fees for the swap
Generally, a better price gives much more benefit than fees loss so Boosted UniV3 will perform better than UniV3. However, there are some edge cases when the price move is too little to compensate for the loss of the fees. In these rare cases, the Boosted UniV3 position will perform slightly worse.
For more details and formulas see our article about the tricks with Uniswap V3:
Uniswap V3 Voodoo Magic Fuckery
Heyhey, everyone, we’re back in town! Hope you had a great time with your yields in DeFi while we kept quietly…
This strategy allocates the tokens into Gearbox Protocol to get the leverage and puts them into the Curve pool. Then the strategy deposits Curve LP tokens into Convex where the juicy yields live.
The strategy implements the backstop module:
The backstop module monitors the position’s health factor and has pre-defined deployment parameters when the strategy can be stopped. Under the specific market conditions, Backstop Module automatically triggers Closing Credit Account to avoid liquidations.
For more details see the detailed article on the Fearless Gearbox:
Fearless Gearbox strategy by Mellow
Mellow Protocol sees itself as an integration layer for DeFi that enables building automated strategies integrated with…
Mellow-Voltz LP Optimizer
The strategy was built by Voltz Protocol, and we’re proud that the team chose Mellow to work on their strategy, details are described in the article in Voltz Protocol blog:
Introducing the Mellow-Voltz LP Optimizooor
The initial Mellow LP Optimizer is available for the Voltz Protocol stETH pool, meaning LPs just deposit ETH into the…
The trick — it’s already live and can be used via Voltz dapp interface.
Code & audits
Initial strategies are under audit right now and the reports will be published soon.
Protocols, integrations and further strategies
Besides the initial strategies, there’re more to come and some new strategies are already WIP and will be released soon.
We see Mellow not only as a solution for LPs, but also as a protocol for protocols that provides strategies for native protocol tokens and treasury management.
As an integration layer, we’re open to collaboration and integration with any protocols, feel free to contact us in Discord if you want to discuss your strategy ideas or have requests for integrations to implement your strategy.
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