Twister Finance Spinning Up

Twister Finance
5 min readMar 17, 2023

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An introduction to a new lend and borrow platform on Arbitrum, looking to enhancing capital efficiency within the Arbitrum ecosystem.

If you have any inquiries, feedbacks, partnership proposals feel free to contact the team at info@twisterfinance.com

Introduction to Twister Finance’s offerings

The protocol’s ethos is to allow users to collateralize yield generating assets and leverage up their returns by borrowing against these assets and buying more of the yield generating assets, this allows liquidity providers the ability to leverage up these yields.

An example of leveraging up these yields are illustrated below.

Using the following terms your Return on ETH will be:

After one loop the LTV (Loan to Value) would be 41%, which is relatively safe considering even if ETH halved in price to $825 you still would be below the liquidation threshold of 80% at ~69% (this includes a decrease in GLP as well). The annual return after one loop is now 12% on your original investment of 1 ETH.

After one loop LTV (Loan to Value) is 41%, which is relatively safe as even if your initial 1 ETH halved in price to $825 you still would be below the liquidation threshold of 80% at 58%.

After two loops the LTV would be 50%, the annual return on your initial ETH would now increase from 12% in Loop 1 to 16% after Loop 2. Here the risk has increased slightly but the LTV is still much lower than the liquidation threshold of 80%.

After three loops the LTV would be 60%, the annual return on your initial ETH would now increase from 16% in Loop 2to 23% after Loop 3. The risk for liquidation is definitely higher but would still take a drawdown of 40% in ETH price for a liquidation of your position to occur.

On launch the platform will have the following assets that will be available to use as collateral.

  • GLP (GMX)
  • SMLP (MUX protocol)
  • ETH
  • DAI
  • USDC
  • UNI
  • LINK
  • USDT
  • FRAX
  • WBTC

The assets you will be able to borrow are as follows.

  • ETH
  • DAI
  • USDC
  • UNI
  • LINK
  • USDT
  • FRAX
  • WBTC

The two assets that fit our scope of real yielding assets and will be available on launch are GLP and SMLP.

GLP is well known to most users on Arbitrum and is a juggernaut of the real yield narrative, averaging between 11%-65% in yield paid in ETH.

Simply put, all trades within GMX swapping, perpetual trading and liquidations take place through the GLP pool. Users can invest in GLP and receive protocol fees as rewards for providing liquidity.

The strengths of GLP are as follows:

  1. GMX’s huge volume and fees generated (Steadily growing)
  2. No impermanent loss
  3. Profits proven by history

SMLP is slightly different to GLP as it dynamically shares liquidity across multiple utilization routes, including on platform margin trading and third-party DEX mining, seeking to significantly increase the revenue generation. The protocol will preferentially reserve liquidity for traders and earn fees while using idle assets for third-party DEXes mining to generate additional yield; when the margin trading demand increases, the MUX broker will channel the liquidity back from DEXes and reserve for traders.

Essentially MUX is a perpetual DEX that also offers an aggregation service It reduces trading costs and enables leverage boosting of up to 100x on its partner DEXs, which currently include Gains Network and GMX.

By supplying additional margin for traders, the aggregator can boost leverage up to 100x on an underlying perp DEX MUX’s main revenue sources comprise native trading fees and rewards from unused MUXLP liquidity being utilised for third-party DEX mining.

The strengths of MLP are as follows:

  1. Growth over the last couple of months, only a fraction of the size of GMX and ability to gain a larger market share
  2. No impermanent loss
  3. Increased revenue potential given the aggregation and Dex mining characteristics

Why Twister Finance

Twister Finance is dedicated to unlocking the value of underutilized and capital inefficient assets in the artbitrum ecosystem. Our initial focus will be on supporting GLP(GMX) and SMLP (MUX Protocol) as collateral, with the aim of creating a more efficient and user-friendly experience than what currently exists.

As a community-driven organization, we believe in creating a safe and inclusive space where individuals with a passion for Defi can share their ideas, interests, and engage in meaningful discussions. Our Discord and Telegram channels are more than just forums for discussing our protocol — they are places where users can connect, have fun, and build relationships with like-minded individuals to grow the protocol.

Twister Finance aims to bring utility to liquidity tokens that earn real yield, this can assist liquidity providers to either hedge their positions or leverage up and increase their returns from these underlying protocols.

The Twister Finance token

The Twister Finance protocol is governed and owned by token holders. Rewards and incentives from the protocol are paid in the token and its related escrowed token. As the protocol evolves, there will be proposals to add additional benefits for token holders.

You can obtain the token by using the Twister Finance protocol, the total supply will be 10m. The Token is inherently a utility token that provides users with a right to stake for protocol rewards, participate in governance, and join our community.

Apart from its functionality, token can also be staked to generate protocol revenue and secure depositors against losses. Fees from liquidations accrue to staked token holders, and tokens locked for a longer term receive higher APYs (Annual Percentage Yield) in return.

In summary, the token is a valuable utility token that provides additional benefits to users as the protocol evolves. It can be obtained by using the protocol and can be staked to generate revenue, secure deposits, and participate in governance. Additionally, fees from liquidations are distributed to staked token holders, with higher APYs given to tokens that are locked for longer terms.

The allocation for the tokens will be as follows:

After initial launch the token will be available to purchase on major Dexs a on Arbitrum.

What's Next

Twister Finance is planning on launching by the end of March 2023, after an initial public Beta we will do a token launch through a launchpad on Arbitrum.

We will release further details on the details of the launch and tokenomics closer to the time.

The initial beta will showcase the utility of the platform with GLP and SMLP to start with but will look to build and partner with other communities in Q2 2023.

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Twister Finance

Lend and borrow platform on top of Arbitrum, allowing you to use real yield staked tokens as collateral, leverage up your returns here.