Sunday, July 14, 2024

    LEVEL: The Omnichain Liquidity Marketplace Launches on Arbitrum

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    Since inception, LEVEL has designed a protocol to serve as a functional alternative to centralized counterparty risk. After half a year of product testing, it’s finally time to expand, and the LEVEL DAO has determined that Arbitrum will be the next ecosystem where Level will be deployed on.

    LEVEL’s Success Story

    LEVEL has experienced phenomenal growth. In just the first month, LEVEL witnessed a notable $320 million in volume traded, generating over $400k in fees and bringing in more than 1000 community members.

    As a testament to the product-market fit they found, it took just 55 days for the ecosystem to hit $1 billion in trading volume, leading to collecting $8.3 million in fees during that time – going from strength to strength with over $20 billion traded in the first half of 2023 alone!

    Impressively, the most significant daily trading volume was $339 million on April 14, 2023, accounting for around a third of the total volume across Perp DEXs (Delphi Digital).

    A Quick Look On-Chain

    • Total Volume: $17.4 billion, of which leverage trading volume accounts for $14.5 billion
    • Total Collected Fees: >$22 million

    Interestingly, these collected fees are distributed to:

    • LLPs (supply-side revenue) = 45%
    • LVL Stakers (protocol revenue) = 10%
    • LGO Stakers (protocol revenue) = 10%
    • DAO Treasury (protocol revenue – redeemable against LGO) = 30%
    • Reserved for Protocol Development (5%)

    Assets Under Management (AUM): $30 million

    During this time, LEVEL has established itself as the leading perpetual decentralized exchange (DEX) on BNB Chain, rivaling even the likes of GMX – a significant achievement considering the difference in total value locked (TVL) and market cap.

    Setting itself apart from competitors, LEVEL wrote its own codebase from scratch and pioneered the tranche system in DeFi. By leveraging its innovative dual tokenomics model (LVL and LGO), which perfectly fits a perpetual DEX platform, LEVEL has created a strong protocol growth value momentum-based model, reflected in the simultaneous growth of platform volume and Treasury assets. This has resulted in achieving close to $10M in treasury liquid assets.

    Last but not least, LEVEL is taking DeFi on-chain governance to the next level, with more than 19 DAO Proposals submitted.

    Truly decentralized governance, driving rapid iteration in product and incentive models for a fast-paced marketplace.

    Why Arbitrum?

    Even at a glance, Arbitrum looked like the most immediate choice for LEVEL, and this sentiment resonated with the majority of their community.

    All new possible chains were evaluated according to their:

    • Liquidity
    • User profile
    • Daily active users
    • Daily number of TXs

    Arbitrum crushes all of these criteria, securing itself as the fourth chain by TVL, thanks to its deep liquidity and a DeFi-native user base. An equally important factor included the sustained growth of unique addresses in the network, even after the ARB Airdrop.

    Many critics speculated that activity on Arbitrum would sink after the airdrop. Nonetheless, the daily transactions on the network are steadily increasing, averaging around 1m per day — close to ATH if one does not take into account the days of the airdrop.

    Considering these factors, it is understandable why the DAO voted for Arbitrum, securing 53% of the total votes across 4 options.

    Arbitrum is the home of DeFi, and a place full of open collaboration. The composable nature of DeFi on Arbitrum offers endless possibilities for new products and partnerships with other protocols. Some remarkable examples include:

    • Yield Aggregators
    • Money Markets
    • Other Derivatives (e.g., hedging, structured products)

    Furthermore, this Layer 2 protocol is a fantastic fit for LEVEL as it houses a native niche of perp DEX traders who can benefit from the ecosystem’s incentivized program for traders, shrewdly configured to drive protocol and treasury growth.

    While the expansion to Arbitrum is the project’s main priority, LEVEL is not stopping there.
    LEVEL will continue to expand in its goal to become a key piece of the wider omnichain infrastructure.

    Practical Developments

    Cross-chain infrastructure is being built to cement the marketplace as an omnichain protocol.

    As part of these developments, LEVEL is migrating the LVL and LGO tokens to the ‘Omnichain Fungible Token’ (OFT) standard.

    The ultimate goal is to enable the cross-chain aggregation of fees distributed to its stakeholders so that LEVEL users can earn yield anywhere in the ecosystem.

    The DAO treasury will also be united across the entire ecosystem, meaning LGO redemptions against the treasury will occur on all chains.

    Following the recently approved proposal, LEVEL is utilizing LayerZero’s technology to bridge 5M LVL to Arbitrum, to bootstrap liquidity and trader activity through auctions and other incentive programs.

    They have also begun migrating:

    • LVL/USDT Liquidity — to make LVL tokens more accessible to users on Arbitrum, LEVEL migrating the entire LVL/USDT pool (currently ~ $713,214) to Trader Joe Arbitrum ensures that new users trading for the first time will have the liquidity to access LVL tokens.
    • LEVEL Trading Pool Liquidity — enabling access to all trading features, migrating 3,555,192 Senior LLP (currently ~ $4,061,500) from the BNB Chain to seed trading liquidity on Arbitrum (50% of the protocol-owned Senior LLP supply).

    Future Plans

    When it comes to future footprints, a key priority for Level Protocol is for the DAO to steer Level’s journey towards exceptional growth.

    LEVEL also remains committed to delivering an exceptional user experience, ensuring that their customers receive premium service and can trade using a top-notch UX.

    Further solidifying its position in the DeFi space, LEVEL is actively seeking, discussing, and moving forward with several partnerships with additional Tier-1 projects, enabling them to expand its reach and utility across the industry.

    LEVEL’s success to date was achievable through the tremendous support from its community of users. Expanding to a cross-chain liquidity marketplace, the marketplace will release a first-in-kind utility-based NFT in just 60 days. All of these unique items will be exclusively for LEVEL’s community of users, with allocation retroactively determined based on interactions with the protocol on both Arbitrum and BNB Chain.

    Three categories will correspond to the three main facets of LEVEL:

    • Stock Broker’s Vest, Earned through proving yourself as a trader. The life blood of any financial hub, a Trader needs to look the part at his desk.
    • Auctioneer’s Hammer –A key group of mechanisms at LEVEL, Auctions serve to widen the reach of the ecosystem as a whole. Embody the power of the Auctioneer with their Hammer.
    • Tattered Farmer’s Hat – LEVEL wouldn’t we be anywhere without liquidity. LPs take on risk enabling the entire marketplace to function. It ain’t much, but it’s honest work.

    LEVEL’s vision is to become a leading omnichain trading platform, and their recent expansion to Arbitrum marks the first step towards realizing this goal.

    Expanding their services into other DeFi sectors is another avenue they are exploring. The goal is to become a multi-chain liquidity aggregator where fragmented liquidity across different ecosystems can be unified in a single pool, allowing users to trade, swap, and borrow seamlessly.

    LEVEL is excited to embark on this omnichain journey, transforming the way people engage with DeFi and revolutionizing their trading experience.

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