Symphony of the Week: Fantom of the Opera, Yearn Boosted
Dear Friends and fellow Ludwigs,
The future looks bright… the future looks boosted!
This week we are psyched up on the beat, boosted. Stepping into the strobe lights and letting all things dissapear around us. More! DJ, boost it louder, all night! Dance with us to symphony of the week!
At Beethoven X we like to enjoy all kinds of music, rock, jazz, classical, trip hop, each symphony is unique in its design. So while we may applaud the show, it doesn’t mean we think you should buy a ticket.
About this Melody
When this piece gets played, we drift off to places that not too long ago never existed. A place where you never have to worry about if all the instruments are playing: A place where every dollar used is put to work!
One of the first symphonies through the Beethoven Boost-o-matic and the world’s first weighted boosted pool: Fantom of the Opera, Yearn Boosted (FTMUSD)
Liquidity for the week gained a total of $290k (14.6%), closing the week at $2.3m. The increase was primarily driven by new deposits into the pool, over the course of the week there was a 9% increase in FTMUSD shares.
From a volume perspective the early part of the week saw a gradual increase in volume before there was a sharp decline. The 27th saw the lowest 24h volume with $75k. However, the 28th saw a complete reversal reaching $179k, this was the high for the week
The boosted pools bring a new dynamic to the reward table. Historically liquidity providers would only get swap fees and, if applicable, farm emissions. Now extra yield is generated from capital, that was previously sitting idle, being put to work. The table below shows us that FTMUSD enjoys the benefit of four revenue streams.
Over the week APRs were consistently above 60%, the low of 60.95% was on the 23rd while the high of 65.21% was on the 25th. Four different sources of revenue for one deposit, this symphony pushes the boundaries. As the TVL in the pool grows, so does the value of deposit going to yearn, this will in turn increase the boosted APR
One of the most interesting things about the boosted pools is its ability to facilitate trading while allowing idle capital to be put to use.
Utilisation is the measure of how effective the liquidity is being used for trading, this is a simple formula: 24h volume/ liquidity.
As a benchmark we can refer to the original Fantom of the Opera symphony. For the same time period it held an average liquidity balance of $31m and has an average utelisation rate of 8.85%. The highest point in the week was 12.21%.
If we look at its boosted version, the average liquidity balance over the week was $2.1m, with an average utelisation rate of 5.57%. Its highest point for the week was 7.88%.
If we stop at this point, it looks like the boosted pool isn’t doing that well, however there is more happening here.
Once we factor a large portion has been deposited on yearn and is not available as trading liquidity, we see the picture start to change. On average only $580k in liquidity was available for trading.
When we compare volumes to trading liquidity, we can see that the average “effective utelisation rate” was 20.73%.
Not only is the boosted pool putting idle capital to work, it is also using the liquidity made available for trading more effectively. As boosted pools get integrated into aggregators, we hope that this will continue to increase.
The future looks bright ….the future looks boosted.
Here is a good read about how the boosted pools are constructed.
Here is a great place to find knowledge in Twitter thread format.
Here is an another amazing Twitter thread that continues to break down the concept in bite size playable bars.
Here is a recording of Beethoven and Balancer discussing the topic together with FTM Alerts.
Not Financial Advice
This feature should under no circumstances be considered financial advice. Each Beethoven X pool is unique and carries the risks of all the underlying digital assets. Featuring on the Symphony of the Week is only a review of past performance. It doesn’t not represent an endorsement of any of the protocols or their digital assets. Beethoven X users should only invest according to their individual risk limits.
Remember that a liquidity pool is only as good as its weakest token. If a token were blacklisted, infinitely minted, frozen, or exploited in any other way, the value of a pool could go to 0. Beethoven X is never liable for losses incurred through using our UI or the Beethoven X protocol. Be careful, and do your own research.