Hello Aloe Community! It’s been a while since our last update, and we’d like to catch you all up to where we are.
Aloe Blend Refresher
As of November 17, 2021, half of all Uniswap V3 liquidity providers had negative returns. Aloe Blend is our first step towards fixing that. Blend is a system to provide liquidity on Uniswap without forgoing other yield-earning opportunities. Rather than concentrating liquidity more than Uniswap V2, which increases IL risk, Blend aims to preserve the 50/50 asset ratio while productively deploying assets that aren’t used in the current trading range.
These deployments are powered by silos, which can connect Aloe to any yield-earning strategy. Each silo manages a specific asset — for example, one could deposit USDC into Yearn and another could put ETH in Compound. At launch we will support Compound, Rari Fuse, and Yearn strategies. This system is flexible, and future products and integrations can be built on top of it. Of particular interest are the permissionless lending markets on Rari Fuse and Euler, which can provide yield on new assets as soon as they launch.
In normal operation, Aloe Blend performs at least as well as Uniswap V2 for its LPs, and depending on the silos, can grow much faster. It is scalable because it needs no parameter tuning before deploying, and no governance after deploying. And for traders, the overall liquidity that is available is the same as Uniswap V2. Blend also brings fungibility back to the LP space, solving the problem that Kain pointed out on Twitter. Protocols can now own or incentivize liquidity on both Uniswap and lending markets simultaneously.
Aloe Blend will be launching with a permissionless model. This means that anyone can deploy an LP pool for arbitrary ERC20 assets, and connect to any silo for higher yield — be it their own custom code or one of our existing implementations.
Aloe Blend will be decentralized, permissionless, and immutable from day one. There will be no admin access, no backdoors, and no multisig, just like Uniswap. We’re releasing it as a public good — an infrastructural upgrade to LP tokens. There will be no protocol fee for using Aloe Blend. All returns go directly to LPs or to subsidize rebalances (strategy execution cost). And don’t worry, rebalances are permissionless too. This means that devs who integrate Blend don’t have to worry about tuning parameters.
The core Aloe Blend contracts are currently under audit from BlockSec.
The Aloe Blend pool factory and user interface go live on Feb 1st, 2022.
Our beta pools for Aloe Blend have been running for the past few months, and we’ve collected a lot of data about their performance and tested the limits of the previous contract structure. As such, we’re winding them down and disabling deposits until the full mainnet release of Aloe Blend.
Aloe Labs is excited to announce a strategic investment round lead by Dragonfly Capital with large contributions from Delphi Ventures and Neo. Additionally, we’re thrilled to have both Santiago R Santos and Nick Chong onboard as angels as we set out to make liquidity provision easy and efficient. Special thanks to Celia Wan, Tom Schmidt, Rob Sarrow, Tom Shaughnessy, Ashwath Balakrishnan, Ali Partovi, Jenny Wang, Guillaume Lambert, Jai Bhavnani, Dariya Khojasteh, Kaito Cunningham, and Ethan Lippman for helping Aloe Labs move forward and grow.
Looking to the Future
The Aloe protocol aims to make passive liquidity provision and portfolio management accessible to everyone. While Blend provides a much-needed infrastructural upgrade, other strategies offer higher yields and require specific administration and tuning. Aloe Strategy Vaults are DAO-governed vaults that will manage liquidity positions through novel decentralized governance structures. These vaults are launching in Q2 2022.
If you’re a developer or financial engineer and want a sneak peek at what Aloe Strategy Vaults will look like, take a look at the strategies in our Uniswap V3 simulator on GitHub. You may recognize some concepts from the Uniswap’s Financial Alchemy paper, one that we’ve come back to time and time again to evaluate the merits of different strategies.
Alongside Aloe Strategy Vaults, the ALOE governance token will be distributed. Further details around the mechanics of the token will be described in the coming weeks. We expect the tokenomics to be based around forward-looking commitments, in-line with the lockdrop and liquidity bootstrap auction (LBA) pioneered by Delphi Labs.
Stay tuned, and we hope to see you all in the Aloe Discord and on Twitter!
— The Aloe Labs Team