Rising over 70% in a week, how does SteakHut V2 build DeFi’s “liquidity layer”?

V2 will become the “liquidity layer” for DeFi across multiple chains and DEXs, which means capital efficiency, automated strategies, real returns, and friendly user experience across the ecosystem.

Written by: Luccy

On November 14, SteakHut completed a seed round of financing led by ys Capital, with participation from Blizzard, Avalaunch, angel investors, BenQi founder Hansen, Camelot founder Ironboots and GMX founder Coinflipcanada.

SteakHut is a LP dynamic management + liquidity mining platform based on Trader Joe. The price of its native token STEAK has increased by 70.80% in the past 7 days. According to data from coingecko, as of the time of writing, the price of STEAK is US$2.13.

In addition, the team announced the launch of the new SteakHut Liquidity V2 on November 21, 2023, which is the first decentralized market making platform for Web3, which brings unlimited possibilities to SteakHut’s products and opens the door to attracting The door to more users.

Liquidity management solution based on Trader Joe’s

SteakHut belongs to the UniV3-Fi track project. Since Uniswap V3 is based on the ETH main network and the Uniswap ecosystem is relatively closed, the LP user ecosystem of Uniswap V3 is also relatively closed. The user portraits are mainly institutions, quantitative teams, arbitrage robots and DeFi Degen, DeFi retail investors have less growth.

As a V3 Fi project, this also limits SteakHut’s user growth in disguise. So from this perspective, the development of SteakHut and STEAK’s rise of over 70 per week are due to TraderJoe. According to DefiLlama data, as of this writing, TraderJoe is Avalanche’s third-largest DEX by trading volume.

Since SteakHut mainly serves TraderJoe, Trader Joe’s success also means SteakHut’s success. SteakHut’s growth logic mainly comes from TraderJoe V2’s adoption of the DLAMM (Liquidity Book) mechanism and its share growth in the Avalanche and Arbitrum ecosystems.

Last August, Trade joe launched the v2 version of “Liquidity Book”. Liquidity Book introduces centralized liquidity to DEX, which is a way to use “price boxes” to disperse liquidity and then aggregate it to achieve “discrete centralized liquidity”. By grouping liquidity, the liquidity of asset pairs is arranged into different “discrete bins”, each bin has a specific price, allowing users to provide liquidity to multiple bins at the same time.

The method of building discrete centralized liquidity on Liquidity Books can be found in: “6 Ways to Build Discrete Centralized Liquidity, How Liquidity Book Changes the DeFi Landscape on Avalanche”

Simply put, Trade Joe V2 AMM is similar to an order book, using discontinuous liquidity. The minimum price accuracy is based on proportions rather than fixed values, and vertical aggregation liquidity brings better composability. Based on the transaction fees obtained by LP and Effective TVL for liquidity incentives.

Since in Trade Joe V2, liquidity is aggregated vertically through each bin, while in Uniswap V3, liquidity is aggregated horizontally. The main benefit of vertical aggregation is that it allows liquidity to be fungible.

Currently, Trade Joe V2 dominates on Avalanche, is growing in influence on Arbitrum, and provides much-needed funding efficiency on the BNB chain. As Trade Joe V2 continues to grow, liquidity management will become critical. This is where SteakHut comes on the scene.

Build DeFi’s liquidity layer

Using SteakHut Liquidity, users can deposit tokens into liquidity containers with specific price ranges. This basically automates the liquidity management process for users to stay in relevant areas, and most importantly, users gain as much benefit as possible from providing LP rather than token emissions.

These rewards include considerable real-world benefits. Specifically, users who deposit LP tokens into SteakHut will receive 80-97% of the platform’s total revenue. The remainder belongs to users who staked STEAK tokens. Since the maximum supply of STEAK is only 5 million, all rewards paid to STEAK token holders will be paid in the form of JOE tokens.

In addition, STEAK follows in the footsteps of JOE and becomes a full-chain fungible token (OFT). This means supply is distributed across Avalanche, Arbitrum, BNB Chain, and wherever else JoeV2 will most likely expand in the future.

Features of SteakHut Liquidity V2

Building on SteakHut Liquidity, the team announced a new SteakHut model, the SteakHut Liquidity V2. According to the official blog, it has the following characteristics:

• Automated Liquidity Strategies: Break down entry barriers to centralized liquidity with automated liquidity strategies, back-tested and designed to maintain liquidity optimization.
• Permissionless vault creation: Easily create and manage your own liquidity vault directly through the SteakHut platform.
• Composable Liquidity Allocation: Leverage our flexible smart contracts to deploy up to 20 liquidity ranges per vault and enjoy liquidity allocation across fee tiers.
• Improve capital efficiency: Optimize your liquidity with SteakHut, automatically repositioning and rebalancing liquidity. This helps create a deep and capital efficient market for your token, all managed seamlessly from a single platform.
• Centralized liquidity farm: Earn additional income on concentrated liquidity positions through SteakHut’s farm option, thereby increasing your liquidity returns.
• Earn performance fees: Create and manage your own liquidity strategies and share them with your community to start earning performance fees.

Among other things, a permissionless vault means that a DAO can create a custom policy that only applies to its members. Moreover, the vault is part of SteakHut’s “Liquidity as a Service” (LAAS) program. During the construction period, SteakHut is also cooperating with as many well-known DeFi projects as possible. Therefore, some community members call it the “liquidity layer of defi”.

Reimagining Liquidity

SteakHut has taken the needs of liquidity providers into consideration and curated an experience that provides a retail-friendly and institutional-grade market making solution for managing on-chain liquidity. With SteakHut Liquidity, you have access to the most composable and flexible smart contracts in the Web3 ecosystem, giving you control over your liquidity.

Liquidity providers will be able to access a range of automated liquidity strategies for all key CLMMs directly from the SteakHut dApp and can incorporate custom strategies or easily deploy their own and have full control over their entire portfolio directly from one professional platform.

SteakHut Liquidity V2 is completely license-free. Deploy your own pool, select up to 20 liquidity ranges, and take full control with SteakHut’s inventory management tools.

The suite of liquidity management tools allows liquidity managers to dynamically and proactively manage liquidity strategies based on market conditions. This will enable liquidity managers to deploy risk management into their strategies and deploy capital more aggressively.

Swapping tokens also enables flexibility in liquidity management, allowing strategists to change a token’s vault ratio as needed. Slippage limits and DEX aggregation allow exchanges to be completed with minimal impact and controlled by administrators.

SteakHut’s subgraphs allow liquidity providers and managers instant access to all key metrics and deep insights into their liquidity strategies. This enables users to reliably track performance against key benchmarks, view token composition to create hedging strategies and view revenue data.

SteakHut is creating a “liquidity layer for Web3” with smart contracts designed to allow cross-compatible liquidity management of all key CLMMs across multiple blockchains. This will enable liquidity providers and market makers to easily manage and optimize liquidity across all major AMMs and blockchains through a dedicated platform. Users can directly switch between blockchain and CLMM to manage a diverse portfolio of liquidity strategies.

SteakHut debuted on the Avalanche blockchain before being deployed on Arbitrum One and Ethereum mainnet, and will expand to all major blockchains and CLMM. Considering that Trader Joe’s and its Liquidity Book are already performing well, STEAK’s position will be even more solid once the LB narrative gets hotter.

Reference Reading:

1.Introducing: SteakHut Liquidity V2；

2. Compared with Uniswap V3, what problems does Trader Joe’s Liquidity Book solve?