Introducing Opal
Decentralized Gemstone
The ancient murals tell the story of a crypto kingdom in great expansion, harvests were great and resources were flowing. Farming had become so attractive that all the inhabitants were turning to this activity, creating an imbalance in the distribution of the precious liquidity necessary to quench the inexhaustible thirst of the markets, drying up the flow of supplies.
Thus began the liquidity wars, as resources became increasingly scarce and the diversity of actors less and less perceptible, a handful of ecosystems began to establish their dominance over the distribution of resources.
Curve Finance shaped the fundamentals of a novel farming mechanism by introducing the first vote escrowed tokenomic, aligning holders and users with the project’s vision, using DAO-controlled incentives to optimize liquidity distribution. Following this path, Balancer protocol introduced the $veBAL governance a year later with the 80/20 LPs innovation, from there the narrative became a standard and most new DeFi projects started to implement veTokenomics.
By giving governance token holders an executive role in the distribution of farmers rewards, this model enhanced interactions between ecosystem participants, greening a field for the development of a new DeFi stack.
Thriving for capital efficiency, Liquid Lockers were quickly introduced, built on top of veTokens to reduce governance access constraints and mutualize boosting power for the underlying yield bearing utilities, they allowed users to join forces and increase their return.
When many protocols, whose native tokens trades on ve governed DEXs, started to incentivise governance participants to capture farming emissions, driving more volume and liquidity to their pools, the governance wars became DeFi’s most powerful yield engine combining real yield and external voting incentives.
However, flaws started to materialize, liquidity management became increasingly complex, challenging the game theory between voters and LPs, while liquidity inflow on incentivized pools weren’t that great either.
Although this design allows projects to offset part of the vote incentives costs by farming high APRs on protocol owned liquidity, the original bootstrapping and growth purposes are not fulfilled for one main participant of the governance markets.
This is where Opal comes into play, following the path of liquid lockers such as Aura Finance by taking advantage of their yield opportunities, while perpetuating the desire to deepen liquidity and simplify access to assets traded on DEXs pools.
The protocol employs Omnipools to mutualize single-sided yield bearing assets liquidity and distribute it among Stablecoins, Ethereum Liquid Staking Derivatives (LSDs) and other strategic tokens’ pools.
For Users : The protocol value proposition is a set and forget, gas efficient, diversified and less time consuming access to sophisticated farming opportunities.
For Governance wars participants : Opal is a Liquidity as a Service protocol focused on gauge tokenomics DEXs, launching on Balancer / Aura ecosystem, that can be incentivized to attract actual market depth, thus asset stability.
Designed to enhance the value of liquidity distributed via Opal for governors, and benefits LPs with higher yield opportunities. The protocol is coded from scratch although it iterates on top of existing fundamentals, bringing more scalability with an Omnidex vision as well as significant governance system changes.
Stay tuned for the next article within which we’ll dive deeper into the project’s flywheel and product.