Evmos Relaunches, SPool Farms, & Aurora's Ecosystem

MAY 04, 2022 • 9 Min Read

Joo Kian + 2 others

DISCLOSURE: DELPHI VENTURES HAS INVESTED IN ETH, CELESTIA, AND CRYPTO UNICORNS. MEMBERS OF OUR TEAM ALSO HOLD NEAR, RECEIVED EVMOS AND DIFF AIRDROPS, AND ARE PARTICIPATING IN THE STATED FARMS ABOVE. THESE STATEMENTS ARE INTENDED TO DISCLOSE ANY CONFLICT OF INTEREST AND SHOULD NOT BE MISCONSTRUED AS A RECOMMENDATION TO PURCHASE ANY TOKEN. THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND YOU SHOULD NOT MAKE DECISIONS BASED SOLELY ON IT. THIS IS NOT INVESTMENT ADVICE.

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Chart of The Day: Evmos Relaunches to TVL Spike

  • After an unsuccessful upgrade during its initial launch in March that led to the team halting the entire chain, Evmos re-launched last week on Apr 28th.
  • With a fresh start, Evmos started gaining TVL on its various native projects, with Diffusion Finance taking the lead as its native DEX. To check if you have an EVMOS or Diffusion airdrop, visit Diffusion.fi and click on “Claim Diffusion Airdrop” to claim it. You can also yield farm on Diffusion in the USDC/WEVMOS pool (311% APR) and DIFF/WEVMOS (723% APR).
  • Evmos’s TVL has been rising consistently and just crossed $10M. We will have to see when Evmos releases more native projects if it can attract users, and their capital, back onto the chain.
  • For more, Delphi members can revisit our Cosmos ecosystem overview here.

Airdrops, GameFi and Guild Staking & Stablecoin Farm

[Excerpt from May 2nd DAO Insights]

  • Spool serves as DeFi middleware, that allows users to participate in a subnet of yield generating protocols in a risk diversified, automatically managed, and efficient fashion. Learn more about it here.
  • Yield calculations can be found here. To access Ethereum, you’ll need to configure your MetaMask to run Ethereum’s Mainnet.
  • Bridge: You can use Synapse Protocol to bridge assets over to Ethereum. Ethereum uses ETH for gas.
  • Tokenomics:
    • Total Supply: 210M
    • 65% (136.5M SPOOL) of the total supply is reserved for the community via. Reward Distribution which is controlled DAO controlled

Notable Unlocks:

  • 10% (21M SPOOL) has a 6-month lock and then will be vested linearly over 24 months by the Founding DAO
  • 20% (42M SPOOL) has a 6-month lock and then will be vested linearly over 24 months by the Ecosystem, Advisors, and Builders

Genesis Spools

  • Genesis Incentives Program for the Genesis Spools entails a rewards pool of 3M SPOOL tokens
  • The new Genesis Spools went live on April 26 and will continue for 3 months
  • Spool currently supports the following protocols: Aave, Compound, Convex, Curve, Harvest, Idle, Yearn
  • The two main Spools are defined by: a low-risk Spool with a low-risk tolerance set to “-8” and a high-risk Spool with a high-risk tolerance set to “+8”, on a scale that ranges from -10 to +10
    • Risk tolerance can be best defined as the willingness of a user towards taking on relatively more risk for more yield.
  • Genesis Spools is not to deliver maximum yield or to access cutting-edge high yield strategies. Instead, the intention of the Genesis Spools is to showcase and validate the architecture of the Spool contracts on mainnet.
  • For more, Delphi members can see the latest Yield Insights here.

Aurora: Another EVM Chain, or the Beginning of Near?

[Excerpt from a Delphi Pro Report]

What is Aurora?

  • Aurora is the EVM (Ethereum Virtual Machine) implemented as a smart contract on Near. An important distinction here is that it is a smart contract on an L1, not a rollup posting to an L1. Before diving further we should have a high-level understanding of Near, the sharded blockchain that Aurora is built on.

Ok, so what is Near?

  • Near is the latest L1 to garner attention in crypto due to its $800M+ ecosystem fund and the momentum of Aurora. A PoS chain with dynamic sharding and 2-second finality, it is viewed in some aspects as the ETH 2.0 roadmap. There are differences, however, as Near’s use of dynamic sharding is how it plans to scale vs Ethereum being rollup-centric. Another big difference vs other ecosystems is that they are not trying to depend on one environment or language. While Rust is the main language native to Near, if a developer wants to use the EVM (Aurora), Substrate (Octopus Network), JavaScript, whatever, they can. From a user perspective, the goal is that they will be able to use apps built using any of these languages seamlessly. Cross-contract calls are what allow Near to compose like this, and there are already some things happening between Near native apps and Aurora.

Back to Aurora

  • As said prior, Aurora is the EVM deployed as a smart contract on Near. Since it is a smart contract it does not need a separate validator set or to rely on sequencers and verifiers like a rollup (although it does need relayers). Aurora shares the same security like any other contract on Near. This means that there is a lot of work removed for Aurora: it does not need to get separate validators, worry about consensus, storage, or any other tasks that a blockchain would need to handle.

  • Being implemented as the EVM means developers can use all of the normal tooling available in the Ethereum ecosystem and the look and feel of Aurora will be the same. Users can simply use Metamask and pay gas fees in ETH and developers have access to tools like Truffle and Hardhat for their smart contracts written in Solidity or Vyper. It is the same Ethereum experience but on Near. Now, while ETH is the native asset in Aurora and used for gas, the Near blockchain only accepts NEAR, and so Aurora needs to use relayers to make this experience work. The process is as follows:
    1. User signs an Ethereum transaction (e.g. with Metamask) and sends to the RPC
    2. RPC wraps the tx into a Near tx and sends to the Aurora contract on Near
    3. Transaction is verified and the original tx is sent to the Aurora engine contract
    4. Aurora engine contract parses the tx and executes it, calculating gas in ETH
    5. ETH is paid to RPC for tx
  • In simple terms, what has happened is that NEAR was used for gas (paid by the relayer) to execute the contract on Near with the relayer collecting ETH from the Aurora user. In a rational, completely free market, we would expect the ETH collected from the Aurora user to be slightly more than the relayer paid in gas fees on Near (to compensate for the service). While anyone can run a relayer, right now this process is heavily incentivized by the Aurora Labs RPC. Transactions were 100% subsidized (i.e. free) in the past, but in February there was an emergency update to implement 1 gwei minimum gas due to excessive load (bots) from a new game called MoonFarmers (games and nft mints tend to be the worst offenders). There is little incentive for someone to run their own relayer and pay the full NEAR gas fee while Aurora is subsidizing. Aurora wants to subsidize gas fees in perpetuity and is one of the main reasons for running the Aurora validator (to be discussed later). Combine this with Near’s sharding technology and mostly empty blockspace at the moment and you have an enticing environment for EVM developers.
  • As should be clear, while Aurora looks and feels like the EVM, and many users will be onboarded from Ethereum, it is not really an Ethereum scaling solution as all settlement, data availability, and execution is on Near. In other words, all of the economic value on Aurora flows to the NEAR token, not ETH. You could probably call it an EVM scaling solution though.

The DeFi Ecosystem

  • The Aurora ecosystem will look familiar to other EVM chains but in its infancy. Back in November, Trisolaris (a Sushiswap fork) was pretty much the only used protocol on Aurora and nearly the entirety of Aurora’s $150M TVL. This was mostly the case throughout 2022 until the launch of two more primitives – the money markets Bastion and Aurigami. From the end of February until now these two have driven Aurora’s TVL by $1B to sit at ~$1.4B total. The Aurora EVM has close to 3x the native Near TVL today (in fact, if you go to DefiLlama, Aurora shows up in the main section whereas you need to dig through the filter to find Near).

  • Bastion has been, by far, the largest driver of capital to Aurora. Their lockdrop hit $300M in March and they announced a $9M raise from notable funds a few weeks later. Due to the lockdrop and heavy incentives on the platform there is a negative borrow on stablecoins at -1.5%. This makes Bastion one of the cheapest places to borrow in crypto and will continue to drive more capital to Aurora. Other money markets can’t compete with a negative borrow and being the same EVM experience people are familiar with, the switch is simple (just bridge and change Metamask to the pre-populated Aurora RPC). This bootstrapping/paying for liquidity phase by Bastion has kicked Aurora activity into the next gear. While not organic usage, it will spur activity nonetheless and continue to drive users. The other money market, Aurigami, is in a similar boat to Bastion as having just done their own raise in February and their public IDO upcoming on May 5. Money markets are arguably the most important primitive before an ecosystem can start to grow and Aurora now has two that combine for ~$1B at extremely attractive rates. The ecosystem is going through an explosive phase but has been driven by three protocols so far: Trisolaris, Bastion & Aurigami. With Near’s $800M+ ecosystem fund, AURORA incentives from the DAO (i.e. cheap fees), and continued venture capital interest, it’s unlikely the momentum will stop. You can check out the full ecosystem here.
  • For more, Delphi members can see the full Delphi Pro Report here.

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Joo Kian + 2 others