Over the past year, LiquidDriver has established itself as a dominant force in the unfolding battle for governance power, with a focus initially on the untapped potential of the Fantom chain. The last nine months alone have seen 18 million dollars of revenue generated, with an average total value locked (TVL) of 47 million dollars. More broadly speaking, TVL has seen steady growth denominated in $FTM. The protocol has boldly pushed DeFi, certainly on Fantom, into uncharted territory, through a range of innovative features (with a few major ones named below):
- Building out xLQDR, a vested version of LQDR that captures the revenue generated by the platform.
- Developing a “Convex-style” system on top of existing Fantom protocols, utilizing key ecosystem tokens such as Spirit’s $inSPIRIT and Hundred Finance’s $HND
- Providing increased liquidity for xLQDR holders, via innovative FNFTs (financial non fungible tokens) and other wrapped derivatives created by LiquidDriver’s partners — for example, cLQDR.
- New UI and the release of the Shadow Farms — the ultimate maximization layer of SpiritSwap and beyond
Master Gauges is a brand new Liquidity-as-a-Service product designed and developed by the core Liquid Driver team. Inspired by the Curve gauge voting system, the Master Gauges product will allow xLQDR holders to vote on gauges to set $LQDR emissions.
Master Gauges provide a solution to the notable negative consequences of liquidity mining programs. Instead of renting their liquidity through the long term planned emission of their governance tokens, DEXs (decentralized exchanges) can outsource their liquidity mining program to Liquid Driver. As a result, DEXs can now adjust the incentives on top of their liquidity pairs however they see fit. When this system is used appropriately, it is designed to drastically reduce capital inefficiencies.
But, more than just being a simple Liquidity Hub, the Master Gauges product opens the door to direct financial management of any DEX’s liquidity — an area that has been ripe for innovation.
A Cross-chain Liquidity Hub & Bribing Marketplace
Let’s explore the Master Gauges product in greater detail.
Every DEX onboarded on the platform will have its own Master Gauge — with the option of a number of its liquidity pairs listed as a Layer 2 Gauge on top.
A share of total $LQDR emissions would be allocated to the Master Gauges, with weights set according to the results of the vote. The same would be true for the Layer 2 Gauge.
With both voting rounds implemented, xLQDR holders would get to vote twice during the 14-day epoch:
- They vote for Master Gauges
- They vote for Layer 2 Gauges
In essence, the higher the bribe, the higher the likely allocation to the said DEX or pool.
The process is fully on-chain and quasi-permissionless, whitelisting for master gauges will be subject to a DAO vote . The entire experience will be available directly on LiquidDriver’s dApp — a pioneering feature that perfectly demonstrates LiquidDriver’s commitment to improving the DeFi experience for the user.
Utility matters and the Master Gauge product has been built with a great deal of utility, specifically for xLQDR holders, baked right in. However, a point of pain for DeFi users across the cryptosphere has been the methodology and approach undergirding the informal bribing markets that have naturally flourished on other chains . These informal bribing markets have a great deal of friction for the user. They are a hodge-podge collection of user driven, manual and time consuming actions that need to be carried out repeatedly. They are inherently user unfriendly.
To address this issue, LiquidDriver has developed a highly intuitive bribing marketplace on top of the gauges voting interface. Master Gauges and Layer 2 Gauges owners will be able to add custom bribes to xLQDR holders to incentivize votes for their gauge. Once they have staked or delegated, xLQDR holders will then be able to claim the bribes directly through Liquid Driver’s native UI.
Users who want to maximize their returns but do not have time to actively participate in the process can delegate their votes to the protocol — meaning all they have to do is reap the rewards.
Potential Benefits & Use Cases
- Capital efficiency
The recent establishment of bribing markets was followed by prices finding an equilibrium at around $0.5 spent on bribes for $1 worth of token emitted. LiquidDriver’s bribing market will be driven by free trade forces that should ultimately lead to a bribing price close to the one set at an aggregate level.
In LiquidDriver’s model, both protocols and DEXs can bribe xLQDR holders, leading to a combined reward mechanism that increases the profitability of each LQDR held. Additionally, the expectation is for the system to be balanced with protocol driven demand for xLQDR — as a result creating strong locking demand on LQDR.
- A far-reaching liquidity layer
An increasing number of DEXs and Money Markets are implementing veTokenomics in order to align their desire to reward long term investment with the liquidity providers’ wish to make consistent, healthy profit. As a result of this the protocol forgoes its Liquidity Mining program to veToken holders.
In the event of a temporary non-alignment with veToken holders interest, the Master Gauges product can be used by partner projects to bring back power to their hands, allowing them to rebalance their rewards across the LPs they think are best suited to their long term horizon.
- A cross-chain liquidity hub
Master Gauges will be first launched on Fantom. The intention is to then quickly and efficiently expand the product to be cross-chain, with the initial focus on Polygon, Optimism, Arbitrum and Avalanche.
Hence, in the event of a liquidity crunch on any given chain, DEXs can still utilize the Master Gauges product to rebalance its TVL accordingly.
- An automated process available directly to users via LiquidDriver’s native UI
The emergence and evolution of the veTokenomics model has naturally been followed by the establishment of a (predominantly informal) bribing market. Currently, protocols submit their bribes to veToken holders through a mess of different communication channels — mainly Discord and Twitter — and then manually send the bribes to each portfolio.
This process is highly time-consuming, manual and continues a great deal of overall waste. With Master Gauges, protocols will now be able to submit their bribes directly on the LiquidDriver UI, before being automatically sent to xLQDR participants.
Over the past year, LiquidDriver has repeatedly demonstrated a hunger to improve and level-up the accessibility and power of DeFi tools. Master Gauges represent the next major leap in the long term vision of the team and will give even greater control back to both partner protocols and individual users. It’s an exciting time to be a pirate!
Links to begin your journey can be found here.