Wombex Finance

<blockquote>Let’s discuss Wombex performance, stats, and latest developments</blockquote><h3 id="introduction">Introduction</h3>Wombex had ten extremely busy days. The protocol has worked its way up from zero to be in the top 10 in the BNB chain ecosystem by TVL metric.However, TVL is important but not the only metric. A lot of useful information about protocol performance often lurks in on-chain data, social metrics, and development reports. This performance recap article is devoted to demonstrating Wombex metrics to the community in an open and transparent way.<h3 id="strong-fundamental-metrics-strong">Fundamental metrics</h3>veWOM accumulationThe primary Wombex purpose is to accumulate the major stake in veWOM, own a significant share of boost power in Wombat, and influence governance. It also means that Wombex LPs will receive a considerable share of all WOM daily emissions when reaching a certain TVL in Wombex.The veWOM accumulation curve is presented below:<img src="https://miro.medium.com/max/1400/1*LcGiuqzvbAs7xgY0ZR4N2g.png" />10m veWOM milestone reachedTotally, Wombex accumulated 6.09m veWOM from the community and 4m veWOM from Wombex treasury as a part of token swap agreement (TVL milestones reached). Now, Wombex accounts for 48.75% of veWOM ownership in the Wombat ecosystem.<blockquote>Being #1 veWOM address holder and taking into account TVL, Wombex mines almost 50% of all WOM issued daily.</blockquote>According to the latest calculation, it’s around 60k WOM per day. It’s important to note that 10% of all mined WOM is automatically locked into Wombex and paid out as wmxWOM to vlWMX stakers. It automatically grows Wombex veWOM position and pays vlWMX APR.The WOM staked amount distribution is presented below:<img src="https://miro.medium.com/max/1400/0*TF6jhKCmzXJwKoMN" />Data analysis reveals that Wombex attracted WOM from both whales and average participants of the WOM community.Important: the WOM Wars <a href="https://wombex.finance/#/bnb/bootstrap" rel="noopener noreferrer nofollow">Bootstrap event</a> is still live. Only 3 days of high WMX rewards remain.TVL acquisition &amp; yieldWombex TVL now is around $86m:<img src="https://miro.medium.com/max/1400/0*lGRjKtDTtCjwrCgj" />Stablecoins account for the major share of TVL in the protocol:<ul><li>BUSD: $51.3m</li><li>USDT: $12.5m</li><li>USDC: $7.3m</li><li>DAI: $4.8m</li></ul>During ten days, liquidity supplied in Wombex mined almost 350k WOM tokens. However, some share of WOM isn’t distributed yet due to reward algorithms in Wombex.You can see on this chart amount of mined WOM vs amount of claimed WOM:<img src="https://miro.medium.com/max/1400/0*uahYSTVt6L3YNmDD" /><blockquote>In the BUSD pool vault <a href="https://bscscan.com/address/0x6E85A35fFfE1326e230411f4f3c31c493B05263C" rel="noopener noreferrer nofollow">contract</a>, there are ~108,000 WOM that isn’t distributed yet. Around 170,000 WOM tokens that were mined are still not distributed (number for all pools).</blockquote>It’s ~50% of all WOM rewards that were mined by Wombex since launch. Why does it happen and how does the reward distribution mechanism actually work?The main principle is as follows: if there is an R1 amount of rewards mined today, the distribution of WOM begins instantly with a reward rate of R1/7 days per second:<img src="https://miro.medium.com/max/1400/0*S3KHiyH8BEd_tD34" />It means that the reward will be distributed slowly (7 days), 1/7 of the reward amount each day. However, Wombex LPs mine a lot of WOM every day, so on the next day we will have R2, on the third day R3, etc. It works in the following way with the new amount of rewards every day:<img src="https://miro.medium.com/max/1400/0*-sRvdk528a2Ft2Po" />Wombex has operated for more than ten days earning rewards that have constantly grown daily since TVL and veWOM positions grew.<blockquote>Every time reward is mined, it releases by 1/7 share every day. Since TVL grew really fast, rewards were delayed a bit due to the mechanism mentioned above.</blockquote>However, is such a mechanism really needed for the project success or is it just an option for “smearing” the APR?This logic was initially developed to prevent sandwich attacks on TVL, smooth APR over time, provide more predictable APRs, and offer incentives for LPs to be longer in the pool. It was invented by Synthetix and used by Convex and Aura.This mechanism is like a double-edged sword. From one point of view it doesn’t provide fast rewards to LPs as some other yield aggregators do. From another one, it creates something like a “buffer” with rewards that will be distributed some time after they were actually mined.Here we describe several advantages from using such mechanism for the project:<ol><li>Sandwich attacks on WOM harvest operations are not possible. There is no reason to join the pool before harvest and rapidly exit after it since rewards are distributed slowly. In opposite, there is a reason to have a position in Wombex for a long time.</li><li>If for some reason rewards will drop, the protocol will be able to pay moderate rewards for some time (at least several weeks), and it will save TVL while the community will figure out what to do (attract more veWOM or add new more profitable pools, etc).</li><li>Short-term LPs took all the value away they generated in the protocol when they left. If rewards are distributed immediately, LPs leave no terminal value in the protocol. In the case of Wombex there is a terminal value for the whole $WMX community and LPs.</li><li>If someone joined Wombex for a week to farm juicy rewards and then left the project moving TVL to another place — a lot of rewards will be left in the protocol and will be distributed to those users who kept their positions, benefiting all long-term LPs.</li><li>In case without such a mechanism, short-term LP takes out all value he brought to the project immediately receiving all rewards.</li><li>As a consequence of point 3, it works as a self-balancing TVL mechanism. If TVL drops (some LPs withdraw their liquidity), the remaining LPs receive more rewards per $1 supplied. If TVL proceeds to decrease, the remaining LPs receive more and more APR. Once this process stops, since APR will be too attractive to leave the platform, it will acquire new TVL from the market.</li><li>It also works in another direction — when TVL joins the platform too fast, the APR in WOM tokens becomes low (for a while, due to the 1/7 distribution principle). However, if TVL remains in the project, rewards grow; if a part of this TVL is withdrawn, the remaining LPs will receive much more rewards faster.</li></ol><blockquote>So, now we are in the situation described in point 4: TVL grew too fast and rewards are a bit behind. However, rewards will go to the balance soon.</blockquote>WMX tokenAs you might know, utility functions of WMX are enabled only when it is vote-locked as vlWMX. The vote-locking dynamics is critically important for Wombex since it reflects long-term holders and supporters. Totally 1.22m WMX is already locked:<img src="https://miro.medium.com/max/1400/1*yx7ZOqnMYDXNTFH32LFBRg.png" />WMX locking over time:It’s quite a big amount taking into account that Bootstrap event allocation is only 2m WMX.<h3 id="strong-tech-updates-strong">Tech updates</h3>During the last ten days, Wombex UI and backend were significantly updated. We added several mirrors and improved website connectivity, used an additional node as a service provider to decrease data loading time, and added multiple options for claiming and staking rewards.<h3 id="strong-brand-awareness-marketing-and-social-strong">Brand awareness, marketing, and social</h3>Since launch, Wombex socials have incredibly grown. Today Twitter reached &gt;15k followers, Telegram — 5.5k followers, Discord — 11k followers.Other updates:<ul><li>We conducted a lot of AMAs in BNB Chain local groups: Italian, Arabic, Vietnamese, Filipino, Mandarin, Indonesian, Ukrainian, Russian, French, Turkish, Portuguese, Spain</li><li>We created local groups for Wombex community (&gt;10 groups)</li><li>A new Head of Community and Business Developer added to the team</li><li>Community team is growing to help users better and explain protocol</li><li>New partnership meetings are ongoing</li></ul>A lot of new stuff is coming out. Stay tuned!Wombex socials: Twitter: <a href="https://twitter.com/WombexFinance" rel="noopener noreferrer nofollow">https://twitter.com/WombexFinance</a>Discord: <a href="https://discord.gg/wombex" rel="noopener noreferrer nofollow">https://discord.gg/wombex</a>Telegram: <a href="https://t.me/wombex" rel="noopener noreferrer nofollow">https://t.me/wombex</a>

Wombex performance recap 10/29/2022

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Wombex Finance

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