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Solving the fragmented liquidity problem with Concave’s big spoon method

How Concave is using the big spoon method to unify communities and a create sustainable and open DeFi ecosystem!

DeFi Slate 📈

Dec 16, 2021

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DeFi Slate Fam:

The decentralized reserve currency sector is a mess. The launch of multiple Ohm forks have contributed to the growing threat against Olympus DAO as they all fight for liquidity against each other.

Today, we take a look at ConcaveFi, a protocol that seeks to remedy this by acting as a cross-chain liquidity platform to align forks with Ohm’s original vision. We go over some theorized models that help explain why Concave is going to be way bigger than we can ever imagine it to be and why one should probably spend time in their Discord to collect the various roles.

Cheers,

- Wassie Capital

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Solving the fragmented liquidity problem with Concave’s big spoon method

Decentralized Reserve Currencies

One of the highlights of 2021 is that of the decentralized reserve currency space. From outrageous staking APYs, lucrative bonding discount ROIs, to pulling off crazy price multiples, it's no surprise then that this sector has been getting a lot of attention. What started as a project called OlympusDAO with the hope of building a community-owned DeFi infrastructure has since grown to become part of a new layer of applications that introduced concepts such as protocol owned liquidity (POL) and game theory mechanisms, features of what is now being dubbed, DeFi 2.0. This induced mania is comparable to that of the RFI craze last year, with multiple forks popping up every single day. The result is a crowd of degens, racing to find and get in on the next "Ohm Fork." But what if we told you, that instead of trying to catch the next big fork, catch the big spoon? Would you believe us? If so, stick around as we dive into ConcaveFi, a mysterious yet hyped up project in the Ohmniverse that is probably going to be way bigger than we can ever imagine it to be.

OHM Forks

One of the main goals of Olympus DAO is to build a decentralized reserve currency. But with so many Ohm forks out there, rather than being complementary, they end up competing against each other for liquidity in the hopes of amassing a large enough treasury to back their own reserve currency. This creates a landscape where market participants are more eager to jump onto the next Ohm fork in pursuit of higher staking APYs and heavily discounted bonds instead of staking (3,3) which leaves us with an interesting problem. Fragmented liquidity across numerous reserve currency protocols on various chains. This defeats the purpose of having a reserve currency in the first place.

ConcaveFi

Based on the available information and the little tidbits of clues scattered occasionally, Concave is a cross-chain liquidity project that aims to solve the fragmented liquidity problem across decentralized reserve currency protocols. Contrary to forks which branch out and end up competing with one another. Concave uses the spoon analogy to explain how it is possible to create a sustainable and open DeFi ecosystem by unifying communities to collaborate together.

A model that best explains how Concave will probably work is that of the prism:

A concave prism, (one-to-many) spreads liquidity from Ohm to the other networks
In the opposite fashion, a convex prism (many-to-one) concentrates liquidity from the other networks back to Ohm

With this loop and Ohm's plans to go cross-chain, it is speculated that protocols such as Tokemak & Inverse Finance will play an integral role in establishing Concave as the central hub in the Ohmniverse making it function like an index fund for Ohm forks. This sets Concave up in a great situation where it can not only protect but also fulfill and maximize Ohm's vision of establishing a decentralized reserve currency across multiple chains without the risk of fragmented liquidity.

Despite being one of the most mysterious and cryptic projects, there's no denying the hype behind ConcaveFi as thousands of users participate in a cooperative competition in their Discord to uncover the various roles which have been confirmed, which will unlock some form of whitelisting opportunity down the road.

If you haven't started, don't worry, there's still time for you to hop on the train.
- Wassie Capital

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⚠️ DISCLAIMER: Investing into cryptocurrency and DeFi platforms comes with inherent risk including technical risk, human error, platform failure and more. At certain points throughout this post, we might get commission for promoting certain projects, if this is the case we will always make sure it is clear. We are strictly an educational content platform, nothing we offer is financial advice. We are not professionals or licensed advisors.

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