Pooling wBTC with DeFiZap.

Huge shout out to Cooper Turley from DeFi Rate for helping us with this tutorial! 💌


When it comes to leveraging DeFi protocols, it can be difficult to know where to start.

Here at DeFiZap, we aim to make it easier to access interesting opportunities in DeFi - saving you time, effort, and transaction costs.

Today, we’re happy to unveil one of our most requested Zap series yet - wBTC pooling on Uniswap.

Why Wrapped Bitcoin(wBTC)?

We created these Zaps to provide BTC liquidity on Ethereum, giving BTC users access to tools that are otherwise inaccessible while further incentivizing the usage of wBTC within DeFi platforms at large.

Due to its scarcity, we believe there are potentially lucrative returns to be made on early Uniswap liquidity provisions.

wBTC Pooling options with DeFiZap:

Just like our LINK Zaps, wBTC Zaps will consist of the following options:


ETH Bull?

Name: wBTC LLP: 100% ETH Exposure.

Description: Earn fees on wBTC Uniswap pool while retaining ~100% ETH exposure.

Theory: ETH price (measured in DAI) will increase at a faster pace than wBTC (measured in DAI). Meaning you will have to pay more BTC to get ETH.
Goal:
Acquire more ETH.

BTC Bull?

Name: wBTC LLP: 100% BTC Exposure.

Description: Earn fees on wBTC Uniswap pool while retaining ~100% BTC exposure.

Theory: BTC price (measured in DAI) will increase at a faster pace than ETH (measured in DAI). Meaning you will have to pay more ETH for BTC.

Goal: Acquire more BTC.

Not sure?

Name: wBTC Unipool.

Description: Earn fees on wBTC Uniswap pool with no additional exposure.

Theory: ETH and BTC will both increase/decrease at relatively the pace pace in terms of DAI.

Goal: Get exposure to both BTC and ETH if you believe their price will remain correlated.

To get started with any of these options, simply visit our Zap Explorer and look for the wBTC Zap names described above! 

How It Works.

For our wBTC LLP Zaps, we use Fulcrum to take out a 2x long position, effectively allowing you to retain exposure to the asset of your choice (in this case ETH or wBTC) while capturing fees from the wBTC pool directly.

For our Unipool Zaps, we simply divide your entry token between ETH and wBTC and enter the wBTC pool directly.

What’s Next?

Behind the scenes, we’re gearing up for the launch of AntiZaps (or UnZap) - an intuitive way to exit your positions and withdraw liquidity from Uniswap in a single transaction and into a single token of your choosing.

Our ultimate goal is to provide users with easy entry and exits to some of DeFi’s most popular products, and we believe ‘Zapping out’ is a huge step in that direction.

Interested in pooling with Uniswap but worried about how to track your returns for tax purposes? We’ve got you covered.

With DeFiZap you’ll be able to enter with one token (say ETH or soon DAI) and exit with that same token, easily allowing you to track your profits.

To be one of the first to hear about these updates and more, follow us on Twitter!


Upcoming events:

Community updates:


Please note that DeFiZap is an experimental project. DeFiZap is not providing any investment advisory or recommendation service. By using DeFiZap or its services, you agree that you are using the Services at your own risk and that you will not and do not hold DeFiZap or its team members liable should the services not perform as per your expectation. DeFiZap is not a licensed financial advisor under any law. Please consult your own independent investment advisor before making any investment decisions.


The Ultimate Guide to Uniswap.

Learn how automated market making works and how you can add liquidity to start earning exchange fees.

🦄What is Uniswap?

Uniswap is a protocol for automated token exchange on Ethereum.

Most exchanges maintain an order book and facilitate matches between buyers and sellers. Uniswap smart contracts hold liquidity reserves of various tokens, and trades are executed directly against these reserves. Prices are set automatically using the constant product market maker mechanism, which keeps overall reserves in relative equilibrium. Reserves are pooled between a network of liquidity providers who supply the system with tokens in exchange for a proportional share of transaction fees. Learn more about constant product (x*y=k) market maker mechanism.

The Uniswap Exchange is an opensource front-end interface for traders and liquidity providers to easily interact with Uniswap’s smart contracts.


This walk-through goes over 3 main functionalities available on Uniswap today:

A. Swapping tokens.

B. Adding liquidity.

C. Removing liquidity.


A. Swapping tokens on Uniswap.exchange

1. Connect with Metamask and you’re in. No log-ins or KYC. This does not cost any gas.

2. Once you are in, choose which tokens you would like to trade. Keep in mind you will have to ‘unlock’ each token for trading if this is your first time using Uniswap. This right here is one of the most annoying steps for end users. For this you will need to pay a small gas fee (~$0.06).

3. Click swap to proceed with your exchange and confirm your Metamask popup. Again this transaction will require some gas.


B. Adding liquidity: DIY.

Liquidity providers earn exchange fees (0.3%). But calculating Uniswap pool returns is not this straightforward. Please refer to this post for additional research.

1. Adding liquidity requires depositing an equivalent value of ETH and ERC20 tokens into the ERC20 token’s associated exchange contract.

For example, if you want to add 1 ETH to the ETH/SNX pool, you will need to match your ETH deposit with SNX.

So you will need to either swap 0.5 ETH into SNX or deposit 1 ETH’s worth of SNX using the exchange rate at the moment of your deposit. So first let’s swap 0.5 ETH for SNX. (Exchange rate as of this writing: 1 ETH = 106.838121 SNX).

As you can see I’m actually swapping a little bit more than 0.5 ETH in order to make sure I have enough SNX to provide equivalent amount in case the exchange rate changes by the time I make the second transaction. Here’s my transaction which ended up costing ~$0.25 in gas.

2. Once you have SNX, you will have to navigate to ‘Pools’ tab and ‘unlock’ SNX tokens. Here’s my transaction which ended up costing ~$0.15 in gas.

3. Finally, you can select SNX as your deposit token and if you click on your balance on the right, maximum possible amount will be applied. Click Add Liquidity and confirm your Metamask Transaction.

Liquidity tokens are minted to track the relative proportion of total reserves that each liquidity provider has contributed. They are highly divisible and can be burned at any time to return a proportional share of the markets liquidity to the provider.

Here’s my transaction which ended up costing ~$0.50 in gas.

Adding liquidity on your own summary:

3 Metamask interactions.


B. Adding liquidity in a single transaction using just ETH with DeFiZap.

Alternatively, DeFiZap allows you to one-click add liquidity to Uniswap Pools using just ETH.

DeFiZap auto-converts part of your ETH to DAI or SNX and then adds liquidity to the DAI or SNX Uniswap Pools. You receive back Uniswap liquidity tracking tokens.

Here’s my transaction through UniPool SNX Zap which ended up costing ~$0.90 in gas. As you can see I simply sent 1 ETH to this Zap and here’s what happened:

  1. 0.505 ETH was swapped for ~53.943 SNX.

  2. 0.495 ETH + equivalent SNX tokens (53.029) were used to add liquidity to SNX pool and mint 0.1784 uniswap liquidity tracking tokens which are always sent back to the user.

  3. Remainder 0.914 SNX which didn’t end up getting used for pooling is sent back to the user.

Adding liquidity through DeFiZap summary:

1 Metamask interaction (vs. 3) + $0.90 in gas fees (unchanged) + more efficient use of assets for pooling.


C. Removing liquidity

1. Navigate to ‘Pool’ tab and choose ‘Remove Liquidity’ from a drop-down of choices.

2. Select your liquidity token (in our case SNX) and you will see your balance show up on the right. Once you click Enter Max, you will see how much ETH + SNX you will receive if you remove all of your liquidity from this pool. Here’s my transaction which ended up costing ~$0.23 in gas.


Additional learning resources:

Knowledge Base:


Feel free to share with anyone who wants to learn more about Uniswap.

Share


Disclosure: This is not investment advice. Please consult your own independent investment advisor before making any investment decisions.

Pooling with DeFiZap.

Introducing new LINK Unipool, LINK LLP, and 2xLINK LLP Zaps.

🚀 Ethereum Bull?

Use LINK LLP or DAI LLP to retain 100% ETH exposure and choose which pool you want to support/generate most fees from based on volume.

🔗 Chain Link Bull?

Use 2x LINK LLP to retain 100% LINK exposure while still generating ETH<>LINK pool trading fees AND doing your part in improving overall liquidity for LINK.

☯️ Neutral?

Diversify + earn trading fees using one of our Unipool Zaps.


Trades on Uniswap cause price slippage, especially as trade sizes get larger relative to total liquidity within a pool (example: ETH/LINK trading pair pool) causing more slippage. So for Uniswap to function well and allow large trades it also needs large liquidity pools.

So how does it work? 

“Liquidity providers can be anyone who is able to supply equal values of ETH and an ERC-20 token to a Uniswap exchange contract. In return they are given tokens from the exchange contract which can be used to withdraw their proportion of the liquidity pool at any time. Whenever someone trades your pool’s token pairs the trader pays a 0.3% fee which is added to the liquidity pool. Since no new liquidity tokens are minted, this has the effect of splitting the transaction fee proportionally between all existing liquidity providers.” - great summary by Pintail.

As you can see if you are a LINK Bull who wants to keep 100% LINK exposure, you will need to convert half of your LINK to ETH to be able to add liquidity to the ETH/LINK pool (remember you have to supply in equal values of ETH and LINK).

NOTE ON IMPERMANENT LOSS: If LINK doubles in price you still get ~95% of that upside. If it triples in value you get ~90% of that upside. Meaning you will almost always receive around the same # of LINK+ETH that you put in PLUS your portion of generated trading fees up to that second. 

But what if you want to capture LINK upside even on the portion you have in ETH which you added to the pool?

Introducing 2X LINK Leveraged Liquidity Pooling.

What if I only have LINK?

You would need to convert it to ETH first but keep in mind after using this Zap you will go back to 100% LINK Exposure plus generate pool fees plus eliminate impermanent loss on the way up while helping LINK liquidity in DeFi.

We are actively working on any ERC20 input as well as:

  • Pool bridging to help you 1 click switch between pools.

Note: when you use DeFiZap, you mint & receive the same liquidity/position tracking tokens as when separately using Uniswap, Compound, Maker, Synthetix, Fulcrum etc. on your own - just less time wasted.

DeFiZap doesn’t spread your ETH into 'top 10 on coinmarketcap' - Zaps inject ETH into financial protocols built on top of Ethereum, furthering user adoption.

What happens after?

ENS Instructions:

We’ve integrated ENS capabilities to allow users to access DeFi opportunities simply by sending ETH to human-readable addresses directly from their Ethereum wallet. Just input “2XLINKLLP.DeFiZap.eth”, tweak the gas limit to 5,000,000 and boom! You’re now LINK/ETH Pool Liquidity Provider on Uniswap with 100% LINK Exposure.



Everything we’ve done so far has been purely based on constant user feedback, keeping education at the core of our approach.

Current progress:

1 Month since official launch:

💸 3500+ ETH deployed into DeFi

🥰 by 245 unique users

⚡️ via 705 Zaps

❌ 3631 txs eliminated

🕑 60.5 hours saved for end-users.

  • Our new 2x LINK LLP Zap includes a small convenience fee used to improve our development and educational efforts which further user adoption in DeFi. We have big plans to help democratize access to making a living from creating financial instruments and are extremely excited to build this together with you.

Community love:


Please note that DeFiZap is an experimental project. DeFiZap is not providing any investment advisory or recommendation service. By using DeFiZap or its services, you agree that you are using the Services at your own risk and that you will not and do not hold DeFiZap or its team members liable should the services not perform as per your expectation. DeFiZap is not a licensed financial advisor under any law. Please consult your own independent investment advisor before making any investment decisions.

DAI Leveraged Liquidity Pool DeFiZap Tutorial.

Learn how to add liquidity to Uniswap Pools while retaining 100% ETH Exposure.

Uniswap 🦄@UniswapExchange
Huge shoutout to @DeFi_Zap for their fantastic work improving the user experience of interacting with Uniswap pools!
defizap.com/zaps

Nodar.DeFiZap.eth@NodarJ

Today we're proud to release our biggest UI update+NEW⚡️cDAI Unipool: 1-click add liquidity to cDAI/ETH pool on @UniswapExchange using just ETH. What does this do? It allows you to earn a portion of 0.3% fees generated on the trading pair while still earning interest on cDAI. https://t.co/2Lh5TCkmKE https://t.co/ECDw9eZyew

For those who have been keeping up with what we’ve been up to here at DeFiZap, we’re constantly looking for interesting opportunities in DeFi!

Our latest release of Unipool Zaps allows anyone to start earning trading fees by adding liquidity to Uniswap Pools using just one token (currently ETH but soon DAI as well).

See how Uniswap works.

DeFiZap auto-swaps ~1/2 of your ETH into entry ERC20 tokens required to match for the pool, effectively allowing you to start earning liquidity fees without having to go out of your way to supply both sides of the pool. This is extra useful to help Liquidity Providers measure their returns.

Comparison Holding a Single Token Type

The demand for these Unipool Zaps has been phenomenal but there are two questions we are noticing users keep needing help with:

  1. If ETH/USD goes up, do I lose the upside of that via contributing liquidity to these pools?

  2. If 1/2 of my ETH input is converted into entry ERC20 tokens (DAI, MKR, SNX, etc.) doesn’t this mean I will loose out on half of my profits if ETH price shoots up?

    If you do not want to loose your ETH exposure while still being able to add liquidity to the DAI/ETH Pool, today we are launching a new Zap to help you do just that: DAI Leveraged Liquidity Pool.

So how does it work?

  1. Visit https://defizap.com/zaps/llpdai and choose your ETH input amount. (DAI input coming soon.)

  2. 34% of your ETH input is used to open ETH Long position with 2X leverage on Fulcrum. For example, if you were to input 1 ETH, 0.34 would be used to buy ETH with 2x leverage giving you exposure to ~0.68 ETH.

  3. 66% of your ETH input is used to add liquidity through DAI Unipool Zap. For example, 1 ETH input would result in 0.66 ETH being allocated to adding liquidity to the DAI/ETH pool thus further splitting ~1/2 of 0.66 ETH into DAI. Bringing your ETH exposure down to ~0.33 ETH.

  4. In the end:

    1. Your ETH exposure remains ~100% (0.68 ETH + 0.33 ETH)

    2. Eliminate impermanent loss on the way up while increasing loss on the way down while retaining 66% of Uniswap fees. So this Zap would be for someone who is bullish on ETH. (If you are bearish we are making a Zap which keeps your exposure 100% in DAI or other entry erc20s. And with Pool bridging you will be able to switch between pools in one click as your outlook changes.)

    3. Here’s my transaction: https://etherscan.io/tx/0x0e6d538914a31ae20fbf4cad0f1092633f70a7bfd9b6a739945f469a5cb2a9b3

      NOTE: Margin positions are subject to liquidations in case the price drops below the liquidation price. Please review your liquidation price + interest fees before using this Zap on https://fulcrum.trade/#/trade.

      • As of this writing, with Ethereum price ~$130, your liquidation price would be around $70.

      • Current interest rate you have to pay the amount you borrowed to place the margin trade (0.34 borrowed since we did 2X leverage) = ~6.4%

      • This means that if you are anticipating the price of ETH + generated pool fees to be greater than 6.4% interest expense, you should consider Leveraged Liquidity Pools.

      • Here’s an example of SAI/ETH pool returning annualized 23.88% in fees to liquidity providers. As you can see, your job is to decide which pools you think will generate most fees (aka have the most trading volume).

What happens after you use a Zap?

  • Visit https://uniswap.exchange/remove-liquidity to remove liquidity from Uniswap.

  • Visit https://fulcrum.trade/#/trade to manage your leverage positions.

    We can’t wait to launch AntiZaps to help you 1 click withdraw/exit positions from multiple protocols in 1-click back to your preferred asset.

What’s next?

DAI Leveraged Liquidity Pool Zap is using 2x ETH long position to keep your ETH exposure. We will be launching support for additional pools.

Additionally, we are working on CDP LLPs which help you retain 100% ETH exposure by locking up part of your ETH input into a CDP and drawing DAI required for pool entry.

Note: when you use DeFiZap, you mint & receive the same liquidity/position tracking tokens as when separately using Uniswap, Compound, Maker, Synthetix, etc. on your own - just less time wasted.

DeFiZap doesn’t spread your ETH into 'top 10 on coinmarketcap' - Zaps inject ETH into financial protocols built on top of Ethereum, furthering user adoption.

ENS Instructions:

We’ve integrated ENS capabilities to allow users to access DeFi opportunities simply by sending ETH to human-readable addresses directly from their Ethereum wallet. Just input “DaiLLP.DeFiZap.eth”, tweak the gas limit to 5,000,000 and boom! You’re now DAI/ETH Pool Liquidity Provider on Uniswap without loosing your ETH exposure.

In the future, we plan on further enhancing on-boarding experiences with a number of Venmo-like tools to make the process as friendly & digestible as possible.

Paired with some cool new Zaps we have coming up PLUS the ability to create your own Zaps - we ultimately aim to allow our users to create the most valuable DeFi combinations possible! ⚡️🦄📈⛽️💸💱☢️🤑⚡️

In the meantime, be sure to stay up to date with all things DeFiZap via our new Twitter account.


All current available Zaps are free to use and we don’t control or hold any users’ funds. If you are providing awesome UXs for end-users you could supercharge your tool with custom Zaps. It will be up to you whether you want to charge your end-users fees, again that is up to you. Hit us up if you are interested in integrating DeFiZap:

Join us on Discord

Integration example with Pools.fyi:

Blocklytics@blocklytics
⚡️🦄 Oh, Zap! @DeFi_Zap x @blocklytics Add Uniswap liquidity in a lash on
pools.fyi, where liquidity providers find the best pools and track their earnings.f

Resources:

⚡️ Explore available Zaps.

⏯ DeFi Tutorials.

⚙️ DeFiZap Github.

Community love:

Recent Twitter love:


Disclosure: This is not investment advice. Please consult your own independent investment advisor before making any investment decisions.


🎁Gift the power of DeFi this holiday season.🎁

User adoption starts with you!

In the spirit of the holidays, we’re happy to introduce Zap Gifting⚡️🎁 - giving you the ability to send any Zap to any Ethereum wallet.

What does this mean? Before Zaps automatically minted liquidity tracking tokens to the address form which funds were sent, this new feature allows you to input a different destination address.

🦄 Make your friends Liquidity Providers on Uniswap and show them how Automated Marketing Making works under the hood.

💰 Show them the power of compounding interest through platforms like Compound or Fulcrum.

🎓 Help your friends understand the difference between lending, pooling, and staking as they experience DeFi platforms first hand.

User adoption starts with you! Here’s how it works:

  1. Just like our normal Zaps, users come in and select the Zap of their choice. We’ll take your ETH (and soon DAI) and break it down into its various components. For more detailed explanations on how any particular Zap works, you can check out our tutorials here.

  2. Click “Gift This Zap” and enter Ethereum address that will receive Zap’s proceeds.

  3. You just gave your friends instant access to DeFi.

    NOTE: When using DeFiZap, you mint & receive the same liquidity/position tracking tokens as when separately using Uniswap, Compound, bZx, Synthetix, etc. on your own. So when you send a Zap, your friends receive these SAME EXACT LIQUIDITY/POSITION TRACKING TOKENS to their wallet.

In order for you to gift someone a Zap, they must have a unique Ethereum address. It’s important to note that exchange wallets DO NOT currently support most Zap components, meaning that we’d recommend that they are using something like MetaMask.

For gift recipients who are new to Ethereum, we recommend showing them this tutorial to set up their first MetaMask wallet.

What’s the Goal?

From day one, we’ve wanted to make DeFi as accessible as possible. The ability to gift Zaps is a step in the right direction for helping new users understand how Decentralized Platforms are different.

We’ve also integrated ENS capabilities to allow users to get into Uniswap pools simply by sending ETH to human-readable addresses. In practice, users access interesting opportunities in DeFi directly from their Ethereum wallet. Just input an address like “MKRUnipool.DeFiZap.eth”, tweak the gas limit to 1,500,000 and boom! You’re now MKR/ETH Pool Liquidity Provider on Uniswap.

In the future, we plan on further enhancing the on-boarding experience with more Venmo-like tools to make the process as friendly and digestible as possible. Paired with the ability to customize your own Zaps, we ultimately aim to allow our users to create the most valuable DeFi combinations possible.

In the meantime, be sure to stay up to date with all things DeFiZap via our new Twitter account.

🎅Happy holidays!🤶


Huge thank you to Cooper Turley from DeFi Rate for helping us write up this post and our recent content! 💌


Disclosure: As usual this is not investment advice. Please consult your own independent investment advisor before making any investment decisions.

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