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AllianceBlock Liquidity Mining — Development Update

The AllianceBlock Liquidity Mining product is the first of many products to be released that will form the foundation of the AllianceBlock ecosystem. The Liquidity Mining Product will seamlessly integrate with the AllianceBlock Protocol — our blockchain-agnostic layer 2 protocol that bridges traditional and decentralized finance and build the foundation of the next generation of investment banking infrastructure.

At the heart of AllianceBlock is our vision to connect Traditional Finance markets (TradFi) with Decentralized and Digital Assets markets (DeFi) bringing new financial opportunities to both worlds. Such disruption, however, does not happen overnight and can be achieved only by the process of systemic innovation and gradual improvements. One of the first steps on our journey is to bring sufficient liquidity to DeFi ecosystems and prime them to accommodate transaction volumes and liquidity demands associated with global financial markets.

The Development Process

At AllianceBlock we continuously strive to improve what we have created. We believe in many small iterations in short time periods versus major releases with a lot of newly bundled features in larger time spans. Because our Liquidity Mining Program is a community orientated product, we collect input from the community after each release to help inform our roadmap.

With many different protocols out there at the moment (Uniswap, Balancer, Bancor, Mooniswap, etc.), each with their own pros and cons, we strive to add additional protocols that make sense and, in doing so, give users a choice to determine which protocol best suits their needs and preferences.

Adding an additional protocol is not always straightforward. Not only do you need to take ample time to test every aspect of the new protocol, each protocol introduces its own way of interacting with smart contracts, calculating pool ratios, and having different solutions with regards to slippage, etc. At the same time our code needs to be as generic as possible in order to keep the product maintainable, which will come with its own challenges of course. Therefore, support for additional protocols are not churned out weekly as quality reigns over quantity.

Having a good UX is really important to us, we don’t want users to put their funds at risk by accident. That’s why we put a lot of effort into improving our UI with each release as well. We follow best practices and always look at minimizing the complexity, so our UI is as straightforward to use as possible.

We can honestly say that the AllianceBlock Liquidity Mining Program is a huge success. We have seen the amount of holders rise steadily, the amount of liquidity over the combined pools increase significantly, and the feedback from the community has been astoundingly positive.

In this article we want to present our roadmap for the AllianceBlock Liquidity Mining product for the coming months. A lot of exciting features and protocols are on the way, let’s get cracking:

The Roadmap

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Disclaimer: Our development approach is agile, so the direction is subject to change if the situation requires so. Please note that this is a rough roadmap which is frequently reviewed.

Background: we use React with Redux for the frontend, with Material-UI components for the design.

In this version we have reworked the page to not have a dropdown for the protocols (Uniswap/Balancer) but actually have all available pools (Liquidity Mining Campaign: LMC) in the same page, regardless of the protocols. The LMCs belonging to different protocols are grouped together visually. Data from the LMC contracts is done through the browser, by the user, directly from the Smart Contract.

In addition we have improved our (JavaScript) SDK, with better slippage calculations and more generalized support for additional protocols. On the backend side we set up CI/CD (GitHub Actions) for better release testing and quality assurance.

Finally, we have significantly improved the user experience through implementing and/or improving all MetaMask events (changing networks, connecting your wallets, etc.) and implementing full page loaders and indicators that show transactions still pending.

In the AllianceBlock Liquidity Mining product we would like to be able to calculate the APY of LMCs that have multiple assets as reward (e.g. with the WETH/ALBT/FRONT pool). We achieve this through getting the equivalent value of the assets in USD and comparing the staked asset in its respected USD value. The APY will be moving around due to the price changes but it will offer important information to each user.

This improvement adds a field for each LMC that shows the trading fees in USD that you have accumulated since your liquidity provision. In order for this to be calculated, a backend system needs to be introduced. In the backend system for every user and for every liquidity provision, the time and size of the Liquidity Pool token’s underlying assets are recorded.

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We have added support for Balancer LMCs, including multi asset reward pools. Release of Balancer support was immediately combined with the successful launch of the first fully audited multi asset reward pool together with Frontier.

Support for Bancor LMCs is nearing completion. In general they will behave similarly to the Uniswap LMCs (and are automatically balanced).

Mooniswap LMCs will behave similarly to Uniswap LMCs.

To further extend our list of protocols, Sushiswap will be added as well. Like Mooniswap, it will behave similarly to Uniswap.

v2.0 will be an important milestone where several LMC features will be improved significantly and limitations of the underlying smart contracts will be removed.

Firstly, the limitation of having just one LMC per Liquidity Pool token introduced by the Uniswap Staking fork will be removed.

Secondly, the user will be able to see all LMCs they are participating in — active or finished — and act upon them. The system will have two distinct areas (Work in Progress) where people will be able to see the LMCs they are participating in and another to see all active LMCs.

Thirdly, a major step forward from the v1 contracts will be the introduction of the “IOU balance”. Each time a user provides their Liquidity Pool tokens to the LMC, an IOU balance will be issued representing a receipt for their stake. This IOU balance will be tracked in the LMC contract and the LMC lock contracts (see below).

Finally, the new LMCs will have a lock (cooldown) period. During the lock period, the user will not be able to withdraw their staking rewards. If the user withdraws their stake during the lock period they forfeit their rewards and bonuses. The user will be able to choose a lock scheme (duration) and get a bonus reward for longer locks. The different lock schemes will be represented by several “lock contracts” where the reward and bonus is calculated and the end of the lock is determined.

The UI, through the lock contracts, will provide both consolidated information about the time until unlock in every contract and detailed information for each lock contract. In the first version, the consolidation will be done on the frontend. The bonus reward will be shown next to the staking reward (already visible in the UI).

This will allow for staking similar to LMCs with the stake being locked until a certain period elapses. Users that stake ALBT will be able to see their gains “grow” in real time.

To improve the user’s experience, we will enable them to quickly exchange their fiat to crypto without leaving the website. For this we will use the following widget: https://docs.partners.liquid.com/widget-integration/js-embedded-widget

An analytical dashboard will be created in order for each user to see overall information about their positions and the system.

The analytics board will start with a list of all LMCs and basic information about them, like:

  • Amount of the assets staked (position), with the amount and token name
  • Amount of reward to be claimed, with the current amount and token name
  • APY, with different calculations based on the pool reward type

For each LMC and staking pool we will have more detailed info. There will be user specific information, but also more general information. The user specific information will contain details with regards to their liquidity provision (position). The general information will be for the LMC in general.

A barrier -that still remains largely unsolved- for some liquidity providers is “impermanent loss”. A theoretic loss that can occur when the price of one or more assets in the pool moves significantly. We are working on a feature that allows hedging against Impermanent Loss. Which means, no matter the price movements of the pooled assets, the miners will always be protected.

We will delve deeper into Impermanent Loss Hedging and how we solve this in a future article.

After v2.0…

Right now the roadmap stops at v2.0. Fortunately, we have major plans ahead. v3.0 will be packed with even more exciting features and possibilities. The focus is now set on developing and releasing all remaining features from this roadmap in Q1 2021. During Q1 we will release more information about what’s coming next…

About AllianceBlock

AllianceBlock is building the first globally compliant decentralized capital market. The AllianceBlock Protocol is a decentralized, blockchain-agnostic layer 2 that automates the process of converting any digital or crypto asset into a bankable product.

Incubated by three of Europe’s most prestigious incubators: Station F, L39, and Kickstart Innovation in Zurich, and led by a heavily experienced team of ex-JP Morgan, Barclays, BNP Paribas, Goldman Sachs investment bankers, and quants, AllianceBlock is on the path to disrupt the $100 trillion securities market with its state-of-the-art and globally compliant decentralized capital market.

Website | Telegram | Discord | CoinGecko | White Paper | Green Paper | Token Economics Paper

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Bridging Traditional Finance and Decentralized Finance

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