Logarithm had an outstanding year, we’ve build our first delta-neutral strategies for Uniswap and built our initial community. We want to create new strategies with basis trading for exotic assets this year and build an on-chain public derivative crossing infrastructure on top of that liquidity.
During the last year, we also realized that our first strategy of LPDfi is still premature for the current market stage. We wanted to diversify and gain exposure to other markets while the LPDfi scene is maturing.
This year Logarithm Finance aims to become a leading on-chain public derivative crossing infrastructure.
We believe that demand for the perp DEXs liquidity will have a major impact on the market in the following year. That's why we want to incorporate this narrative into our roadmap and stay on edge with the market.
We are transitioning into a new market phase where on-chain leverage is set to be one of the major growth areas. On-chain basis trading yields higher returns than basis trading on centralized exchanges due to the limited number of professional trades on-chain. This results in more favorable funding rates and more opportunities for lucrative yields. Furthermore, we can see how assets are evolving into productive assets. On-chain basis trading offers the opportunity to earn extra profit from these products and build the infrastructure for optimized perps and public derivative crossing infrastructure.
Logarithm Finance had an amazing journey last year. We successfully bootstrapped the community, initiated the LPDfi narrative, and launched the beta. We achieved many planned milestones and are excited to continue our journey by introducing an updated roadmap for 2024. Over the past few months, we have conducted market research and expanded our team with new talent to become stronger than ever.
Moving forward, Logarithm is not just a liquidity layer for LPDfi protocols anymore. Starting with basis trading strategies that cater to exotic assets on-chain and generate the best yields on both Ethereum and Arbitrum, Logarithm will be able to build up the required infrastructure and liquidity to transition itself to a complete on-chain public derivative crossing infrastructure. Logarithm products can be accessed with a simple click of a button, as always.
We plan to release our basis trading strategies for exotic assets starting this year to build a foundation for Logarithm Prime.
We will interact with multiple layers and protocols, combining unique pairs to build most yielding basis trading strategies. Logarithm Prime will be the protocol build on top of that liquidity.
We are currently running the beta with our closed community members. The beta focuses on testing our basis strategies for GMX V2.
The current beta test is running with capped vaults while we await the audit from Hexens. We will uncap our vaults when we are ready with it to unleash the TVL.
Our first product was the Nautilus Vault that that was effectively managing uniswap v3 positions with elastic ranges to maximise the yield from market making with hedging on GMX. It creates top market yields in low volatile environment.
LP + Hedge
Hedging was the part of Nautilus that transformed to Logarithm Basis — a hedging module for exotic on-chain basis trading. Exotic basis trading brings edge to vast market participants while providing juicy yields and exposure to productive assets
Spot + Hedge
With the existing on-chain derivative infrastructure Logarithm will be able to provide users with the prime on-chain leverage, where long and short positions are matched p2p without leaving the perimeter of Logarithm providing tighter spreads and better funding rates across all markets
Here is the list of products currently under development for 2024. We may add more products as we go along, as the market evolves and provides us with more inspiration to build. Last year, we dedicated time to building a testing engine that allows us to quickly deploy and verify the strategies using historical data. This has been immensely helpful in promptly identifying potential outcomes and allocating resources wisely.
By having access to numerous on-chain liquidity venues Logarithm will be able to optimize user's leveraged position by constantly rebalancing and settling against the most capital efficient platforms. For both long and short positions the effective funding rate will be the average between effective long funding and effective short funding rate. This would mean that if longs pay shorts, then longs will pay less then on GMX and shorts will receive more then on GMX.
Logarithm will execute ETH strategies using a variety of LST or tokens LRT tokens, depending on the users' risk preferences. This approach will provide an additional source of APY to our basis strategies and give us exposure to staking and restaking markets.
We are still in the process of building LPDfi and plan to make our first integration this year. However, it is not the current area of focus for the team right now, as the market is still in the seed stage and many products are not yet live. Once there is a demand for LPDfi, we will continue to lead the narrative.
The funding rate on GMX and other DEXs is an attractive opportunity during the bull market. Due to inefficiencies of on-chain markets perp dexes tend to have higher funding rates then the centralized ones. Our plan is to create strategies for on-chain basis trading with a verity of assets.
We aim to develop strategies on various decentralized perp dexes using exotic assets. For on-chain perp dexes it is usually true that the highest funding rates are set for assets that have low or absent liquidity on the chain where the perp dex resides. This creates on opportunity for cross-chain execution. Basis trading strategies are low maintenance and can be executed in asynchronous conditions and thus are best candidates to be implemented cross-chain.
At its core, we want to focus on strategies that involve leverage on-chain. We believe perp market will continue dominating crypto. Starting with the GMX V2 we plan to integrate multiple prominent perp dexes among various chains to widen up our portfolio of available strategies.