An overview of what is happening in the crypto markets, summarised daily by Crypto Finance AG Senior Trader Patrick Heusser in the market commentary.
Market commentary
Good Morning!
In addition to the collaboration efforts of the "big two", Yearn Finance and Compound, we are also seeing some cool developments in the DEX space.
One of the big problems for LPs (liquidity providers) and the various DEX pools (asset pairs) is IL (impermanent loss). I wrote a little bit about this when telling you about my SUSHI SWAP adventure. At that point, it was one of the unhedgeable risks.
Rahul Rai, who is deep into the DeFi and derivatives space, has started to tackle this problem in his "Impermanent Loss Hedge Total Return Swap Litepaper".
The paper is quite technical, including formulas that go way beyond my understanding. But there are also some examples in it that are easy to understand. What strikes me most is the fact that with each of the developments, my vision (my 5-year vision that we discussed in one of our podcasts) is starting to materialise.
The power and responsibility goes from big banks and client advisors back to the client/trader/investor. Or, have you ever tried to ask for a TRS (total return swap) for an index, or a basket of assets at the counter of your bank? These kinds of products are only available for UHNW (ultra high-net-worth) clients. DeFi makes it possible to offer these products to everybody who has an ETH address and a wallet.
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