CVP Proposal: Gamma

Approved CVP
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Introduction

Gamma is a protocol for non-custodial, automated, and active management of concentrated liquidity. Gamma currently supports fourteen blockchains and twelve decentralized exchanges. The protocol manages approximately $75m in TVL and over 300 pairs that utilize various automated strategies and incentive programs.

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With this Community Verified Project (CVP) application, we hope to take the first step in participating in the Metis ecosystem.

Tech Utility

Gamma is known as a Concentrated Liquidity Manager (CLM) or Concentrated Liquidity Market Maker (CLMM). This is a class of protocols that are designed to deal with the unique challenges posed by concentrated liquidity. These challenges include managing liquidity pools correctly, mitigating impermanent loss (IL), deploying incentive programs, and more.

Yule

Gamma’s key feature is the vault. Gamma’s vaults allow users to deposit liquidity into supported liquidity pools in a non-custodial manner and utilize proper strategies. These strategies optimize performance by maximizing fee production, minimizing impermanent loss, and creating optimum liquidity conditions for the supported pool and traders using those pools. Vault performance is viewable on our analytics suite. Gamma also supports several in-house and 3rd party platforms for protocols to reward incentives to liquidity providers, including our own “GammaChef” rewarder platform and Angle Merkl. Finally, Gamma offers protocol liquidity and treasury management services to various projects.

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These applications are all critical to the health of the Metis ecosystem by creating stable and efficient channels for liquidity to flow into the ecosystem.

About Us

Gamma is a global team developing concentrated liquidity solutions since its creation. Gamma has collaborated with various AMMs and blockchains to supply backend liquidity management services and support. The team comprises business development, strategy, frontend, backend, data analytics, marketing, social media, documentation, and community management.

Security

We have been through three significant audits by ConsenSys Diligence, Arbitrary Execution, and Certik. All major issues have been mitigated and resolved. We have several other security measures, including active monitoring, TWAP checks, deposit caps, and routine stress testing.

Uniqueness Factor

Gamma will be the first to bring concentrated liquidity management to Metis. Our cross-chain and AMM model experience allows us to integrate and assist projects on Metis efficiently. Gamma has extensive experience in the liquidity sector and has created a sustainable funding path to support the project indefinitely.

Alignment with Metis

Concentrated liquidity has proven to be significantly more capital-efficient than older liquidity models. By bringing concentrated liquidity management to Metis, we are leveling the playing field with other blockchains and providing the Metis ecosystem with critical infrastructure. Gamma benefits by gaining more experience with another innovative blockchain and opening up a whole ecosystem of potential partnerships.

Current Deployment Status

Gamma has begun building infrastructure to deploy on Metis. Gamma is currently in discussions with projects that support concentrated liquidity on the Metis blockchain. Gamma has begun deploying backend and frontend infrastructure with Metis, and any contract deployment will be added to this section as added.

Integration Roadmap

September 2023: Setting up critical Metis infrastructure

October 2023: Deployment of backend and support for a concentrated liquidity AMM

November 2023: Frontend support on Gamma.xyz with analytics

Links

Website

Documents

Twitter

Github

DeFiLlama

Discord

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Welcome Gamma to the Metis ecosystem.
Exciting times ahead :grinning:

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Gamma’s widespread support across fourteen blockchains and twelve decentralized exchanges showcases its commitment to non-custodial, automated management of concentrated liquidity.:clap::+1:

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How does Gamma differentiate itself from other DeFi protocols in terms of automated management of liquidity and what unique features or advantages does it offer to users and liquidity providers?

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" Gamma’s key feature is the vault . Gamma’s vaults allow users to deposit liquidity into supported liquidity pools in a non-custodial manner and utilize proper strategies ."

Can you expand on the term “proper strategies”?

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  • What are some of the strategies that Gamma uses to optimize performance and minimize impermanent loss?
  • How does Gamma support incentive programs for liquidity providers?
  • What are some of the security measures that Gamma has in place?
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Feels good to welcome Gamma to the Metis ecosystem :heart_eyes:

You mentioned that Gamma has undergone three significant audits and has several security measures in place. It’s great to know that you take security seriously. Can you provide more details about the security measures you have in place and any specific findings or improvements resulting from the audits?

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Hello.

In the Integration Roadmap, you’ve outlined your plans for setting up infrastructure and deployment. What specific projects or use cases within the Metis ecosystem do you envision working with in the initial stages, and how will Gamma actively contribute to Metis’ growth beyond providing liquidity management?

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Liquidity is a crucial aspect of every blockchain, and it’s essential to address security measures against hacks and the presence of a compensation plan in case of any incidents.

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Welcome onboard…

You know Metis platform is known for its speedy transactions, coming on the Metis Network is a different ball game. How fast does it take a transaction to be confirmed or should I say how long?

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Hi team!

How does Gamma’s approach to concentrated liquidity management differentiate itself from other protocols in the DeFi space, particularly in terms of addressing challenges like impermanent loss and liquidity pool management?

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Hello @Tonie, thanks for your question and comments.

Gamma has several differences/advantages in the concentrated liquidity management space. F

  1. We are the largest liquidity manager in the space
  2. We have the most options with over 280 vaults with over $10,000 in TVL
  3. We have the most network support, with over 14 networks currently supported
  4. We have the most AMM support, with over 17 AMMs supported
  5. We’re the first to begin to establish ourselves Metis, and the first to work with a Metis native protocol
  6. We have been fine-tuning our strategies for over two years through challenging market conditions, including a bear market, a stablecoin depeg, numerous “black swan events”, and overall highly volatile and unstable trading environments.
  7. We’ve developed a variety of hedged strategies, which will be shipped to users over the next year
  8. We have first of it’s kind analytics, that show real vault performance compared taking into account impermanent loss and incentives
  9. We have validated dynamic strategies that work in a variety of conditions and networks
  10. We have special pegged strategies for assets like staked tokens, stables, and specialty tokens
  11. We are running sustainable operations, with protocol revenue that pays for expenses and employee costs
  12. We offer an innovative and low-cost staking program for users who want to add liquidity revenue to their portfolios

All in all, Gamma is a leader in the liquidity management space.

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Hey @ceeny007 thanks for your question. I’ve attached a link to our strategy page.

Strategy Overview

Gamma’s strategies vary from dynamic auto-rebalancing strategies that adjust to specific ranges to strategies designed to help hold a pegged price ratio.

Our strategies are designed to:

  1. Maximize the potential of the liquidity by making as much of it available to the trader as possible
  2. Reward the liquidity provider who is taking a risk by providing liquidity.

Satisfying both of those objectives requires balanced strategies that take into account a huge variety of variables. Each one of our vaults is backtested, analyzed, and then programmed to be managed correctly based on the pair and market conditions.

An example would be a vault rebalancing and changing its range based on the current price ratio of the assets. This is one of the simplest forms of management that we do, but there is much more.

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Thanks for your questions @Chieftain.

I’ll start by linking you to the Strategy Overview. To make a complicated story short, we have proprietary backtesting, tons of experience in challenging conditions, and a very durable algorithm that runs our strategies.

Our backtesting has been our backbone in evaluating pair types and their potential behavior going forward. Our experience has gotten us through stablecoin depegs (they all have), token hacks, teams that quit, high volatility, very poor market conditions, and more. Lastly. our strategies have been in development for over two years, and are constantly improving. We are near the release of a whole new class of sophisticated hedging strategies, which could change the entire landscape of LPing in concentrated liquidity. These strategies are currently being audited by a reputable auditor.

Incentive Overview

Gamma has two major incentive program types. An in-house solution called Gammachef, which allows us to distribute rewards to LPs who participate in incentivized vaults, and a 3rd-party solution called Merkl (created by Angle), which distributes based on off-chain computation. Both programs have advantages and disadvantages. It’s really up to the incentivizing party to decide.

Security Portal

Gamma has major audits from Arbitrary Execution and ConsenSys Diligence. As mentioned previously, our hedging strategies will be audited by OpenZeppelin. We also have safeguards like deposit caps, TWAP checks, and other on-chain security features.

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Thanks for your question @patoae

Gamma has major audits from Arbitrary Execution and ConsenSys Diligence. Our new hedging strategies will be audited by OpenZeppelin. We also have safeguards like deposit caps, TWAP checks, and other on-chain security features.

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Hello @Black322, thanks for your question.

Right now, we’re working with @HerculesDEX! I wasn’t sure if it was OK to publicize, but it’s pretty obvious, being that they’re working on concentrated liquidity. We’re happy to integrate where we can.

Providing concentrated liquidity management is crucial to getting concentrated liquidity working correctly on any AMM. The AMM is the backbone of any good network. So, we feel we can supply what some would call “critical” infrastructure. As the network space becomes more competitive, old-style flat liquidity is becoming more and more obsolete due to its large capital requirements. Concentrated liquidity has proven beyond a reasonable doubt that it’s effective and here to stay. WIth that, management must be an option to users to avoid the potentially expensive pitfalls.

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Thanks for your comments @grace

I’ve covered some details and provided links to our audits in this thread.

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Hello @Papijhaytu

We have a very simple transaction system when LPing. On a deposit, users approve each token (two transactions), and then deposit the tokens into our vaults (one transaction). If users need to stake for rewards (in some cases), they will approve and stake their LP tokens (two transactions). Users can withdraw in a single transaction.

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Hi @jakartinho

I’ll point you to a post I just did that addresses those concerns.

Answer

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Amazing :ok_hand: collaboration with Metis

No doubt that Liquidity is a crucial part of blockchains, and it’s important to address security measures against hacks and the presence of a compensation plan in case of any incidents.

My question is
What are the infrastructure that gamma is building deploy on Metis?

How does gamma minimizes Parmanent loss?

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