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Cash-And-Carry Meets DeFi
Nicolai Søndergaard
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Key Takeaways
8 min read

  • Lumis: Employs an application-specific sequencer to enable seamless integration of spot trading, derivatives, and lending markets, addressing issues like impermanent loss and MEV attacks. Its delta-neutral stablecoin and synthetic ETH vaults offer a slightly new take on yield farming.

  • Ethena: Utilizes delta-hedging strategies to maintain the stability of its synthetic stablecoin (USDe) while generating yields through staking and funding rates. A Reserve Fund mitigates risks from market volatility, funding rate fluctuations, and collateral devaluation.

Introduction

This article explores two protocols using delta-neutral strategies: Ethena, which has recently gained traction for its innovative stablecoin model, and Lumis, a stealth project offering a novel approach to liquidity provision and hedging. By examining their respective mechanisms, we assess how these protocols address challenges such as market volatility, liquidity risks, and efficiency in yield generation.

For those familiar with finance and trading, some of the underlying concepts might resonate with a cash-and-carry strategy, though adapted with additional layers of complexity unique to DeFi. The central question remains: how do these approaches compare regarding safety, scalability, and yield potential?

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