Visor will make Uniswap's moat even bigger
Visor makes liquidity provisioning profitable and simple for all investors
This article is about the evolving conversation around capital efficiency in the liquidity provision space. Uniswap is changing the game and we’ll review some anecdotal evidence.
Before we get into Uniswap, I will reiterate I’m a big believer in Curve and Ethereum’s explosive stablecoin ecosystem. Curve has the best token economics and incentives model in DeFi, has extremely strong network effects across protocols and now other blockchains, and has enabled the tremendous amount of growth seen. I’ve previously written about Curve ahead of the Convex launch, and believe it’s the most important DeFi primitive…tied with Uniswap.
Uniswap is the most disruptive decentralized exchange and automated market maker (AMM) in all of finance. Uniswap is a protocol that allows trustless, permissionless swaps between any two assets for which liquidity exists. Originally, Uniswap’s pools were created by users and new protocols for exchanges and token launches, and were not incentivized. Uniswap’s UNI token was the biggest airdrop in cryptocurrency ever and shook up the DeFi landscape. In order to distribute the UNI token, Uniswap launched incentivized liquidity mining to build depth in the most popular and useful pools. While the merits of the UNI token and governance model can be debated til the Unicorns come home, the humble devs have focused on building a sustainable protocol that can compete and win against large centralized order books, like Coinbase.
Uniswap has been focusing on improving liquidity depth for low slippage swaps and capital efficiency for liquidity providers. The launch of Uniswap V3 has been a moderate success on mainnet, however, high gas fees and the Optimism (Ethereum scaling) delay have been a bump in the road. The launch brought the story of PleaserDAO, who came together to purchase the beautiful Uni V3 launch art. This Bankless episode is worth a watch to learn about PleaserDAO, an extremely successful DAO of Ethereum enthusiasts who invest in culturally significant NFTs.
One of the most significant changes between Uniswap V2 and V3 is the move from 50/50 liquidity pools to LPs defining a range of prices/ratios for their asset pairs. Uniswap V3 liquidity providers receive a NFT that represents their position.
Many Uniswap critics have complained the new model is confusing and expensive compared to the 50/50 LP methodology utilized in Uni v2 and Sushiswap. However, LP’ing on Uniswap V3 has been extremely lucrative for some:
Brandon Curtis is the smartest guy you’ve never heard of in blockchain. A true OG, talented coder, and cryptoeconomist. It’s worth paying attention to his sometimes brash takes.
Being a Uniswap V3 liquidity provider requires active management of your position by watching the ratio of the asset pairs. It can be expensive moving capital from range to range (Ethereum gas fees), and time consuming.
VISOR
Enter Visor. Visor is a new DeFi primitive that utilizes the power of personal vaults for liquidity management. Visor allows users to mint a unique non-fungible token that directs liquidity to the various vaults they build on top of. Visor has built on top of Uniswap V3 and helps protocol users manage their liquidity positions through their “Supervisor,” asset management infrastructure, that controls price ranges and directs profits. Visor says these transactions only require a signature, meaning they are gasless, once a user onboards liquidity to their vault.
Currently, Visor is in a private beta, with ~$1.3m of capital spread across VISR/ETH, ETH/USDT, and TRU/ETH pools. VISR stakers currently earn 100% of the fees. Pay attention to the Visor Twitter to find out when additional deposits are available. Visor plans to list the top 15 Uni V3 pairs in the coming weeks.
Impressive APY for a WETH-USDT using the best “Gamma” strategy - an actively managed LP position on Uni V3. Visor is funding the creation of these Gamma strategies due to the complexity and R&D required for optimize LP’ing with Uni V3.
25% of the VISR tokens have been distributed and they plan on expanding incentives for liquidity mining once they uncap the deposits. It is a good idea to mint a personal Visor NFT while gas prices are low in anticipation of the next phase of liquidity mining.
Epilogue:
One of the biggest brains in DeFi has an excellent thread on Visor that could’ve saved you a lot of time! Read below: