We kickstarted the session with a bang, with Kash showcasing this amazing Meteora music video from Doctor PreBallin and Little Unusual!
Perhaps our LP Army can create a crypto music supergroup next time😂
LP Army Boot Camp
This video was also part of our call for budding liquidity providers to sign up for the first LP Boot Camp, which had over 400 signups!
Watch the Boot Camp sessions:
- Day 1: https://twitter.com/i/broadcasts/1RDGllnNWNEGL
- Day 2: https://twitter.com/MeteoraAG/status/1779177132478128131
- Day 3: https://twitter.com/MeteoraAG/status/1779541597568586119
LP Army Member Spotlight: Pland
We took the opportunity to highlight community member Pland who has been a huge contributor to our LP Army! A couple of his recent contributions:
1. Pland was able to identify some pools where users might have unintentionally burned their LP tokens and helped lock liquidity for them at his own expense by recreating the AMM and sending LP tokens to the system program!
For those who don’t know, Meteora’s LP token (which you get by depositing into a dynamic pool) works differently from the LP tokens from other DEXes. Burning your LP tokens distributes your liquidity to all the other LPs in the pool and it does not lock/burn your liquidity.
2. Pland also wrote a query using Flipside to create an unofficial points tracker based on data related to TVL, swap volume, and fees per pool per day on Meteora.
Big thanks to Pland for these awesome initiatives!
Dynamic Vaults discussion
Users and integrated protocols can deposit assets into Meteora’s Dynamic Vaults, and they are in turn transferred to and from various lending protocols like Kamino, MarginFi, and Solend for extra yield. The max allocation of assets to lending protocols is based on a combination of yield optimization and risk mitigation strategies to help funds remain as secure and accessible as possible.
Vaults are also integrated with dynamic pools, so idle assets that are in dynamic pools are also dynamically allocated to external lending protocols to generate additional yield.
To safeguard user’s assets from potential bad debt, vaults have a safety mechanism such that whenever a lending pool utilization reaches 80%, all assets are withdrawn immediately.
However, in recent times this current mechanism has led to a couple of challenges.
Firstly, lending utilization on external lending pools is very high recently (especially for USDC) and sometimes even exceeds 90%. This means most of the assets inside a lending pool is utilized by borrowers. As 90% > 80% vault threshold, assets in vaults do not enter those lending pools at all to earn more yield. This means that vault yields have been relatively low. Secondly, Meteora’s sudden withdrawals of large amounts of assets would also suddenly push utilization rates and borrowing rates higher for the lending pools.
As such, we are deploying a new update to our vault thresholds to be able to capture better yield from lending protocols, while making it less detrimental to borrowers. This new update would introduce a new parameter called the “Relaxing percentage threshold”, which would leave a % of capital in a lending protocol indefinitely, even when utilization rate is very high and the potential risk of bad debt becomes higher.
For example, if the relaxation threshold is set at 10%, with $10M in TVL in the vault reserve, and we have assets in a Solend pool, $1M would remain in the Solend pool (won’t be withdrawn back to Meteora), even if utilization rate for the pool is at 95%.
To mitigate the sudden raising of utilization and borrowing rates due to a sudden withdrawal, Otto suggested having a schedule to remove assets gradually over time. For example, if the relaxation threshold is at 10% of the vault reserve, instead of keeping 10% in the Solend pool indefinitely, we can gradually remove 1% every week if a withdrawal is required when the utilization rate is high.
Since there’s a risk of leaving 10% of the vault reserve in the lending pool when utilization is high, Durden also suggested creating some form of insurance / insurance fund to further safeguard users’ capital. Currently, this could be covered by the Meteora team.
If you have more ideas around how we can improve Meteora’s dynamic vaults, let us know!
Recent Product Updates
- DEX Screener is integrating Meteora’s dynamic pools to track all pool events. DLMM pools are already tracked.
- We’ve started the first of multiple scalability upgrades by migrating one of our backend systems. Note that during such upgrades the Meteora UI would have a 3–4 hours downtime.
- Preparation for Sharky LFG launch (powered by DLMM) on Tuesday, 16 April
- Points dashboard still delayed as we focus on core DLMM improvements and features to support new tokens and memecoins
Thank you Pland, Otto, Durden, C2yptic, and others for your contributions!
ICYMI, read Community Call Recap — 3rd April
And watch our DLMM Strategy Sessions:
- DLMM Strategy Sessions #1: https://x.com/MeteoraAG/status/1755962478364893316
- DLMM Strategy Sessions #2 ft. @OttoCatalytic and @GeekLad: https://www.youtube.com/watch?v=TVilL1plhCE&t=2s
- DLMM Strategy Sessions #3 https://x.com/MeteoraAG/status/1770074834015506497
- DLMM Strategy Sessions #4 https://x.com/MeteoraAG/status/1772612619662471383
