Tsunami Finance is a DeFi yield farming platform that combines multiple DeFi protocols to maximize returns while minimizing risks for users, built on Aptos. It involves allocating capital to liquidity pools and yielding farming opportunities to generate the highest possible returns.
What is Yield farming?
Yield farming is the practice of lending or staking cryptocurrency on DeFi systems in exchange for interest, governance tokens, or other incentives.
Tsunami finance combines different liquidity pools to maximize rewards while avoiding hazards. Although this technology has hazards since the smart contracts used to establish DeFi protocols can be compromised.
Why Tsunami Finance
Spot Traders and LPs are underserved in the DeFi world. For example, on several AMMs available in the market today, traders still experience slippage, and while LPs are forced to sell volatility at cheaper rates, use wrong market prices to make trades leading to being arbitraged by others.
For Virtual AMMs, the problem that exists for traders is still slippage and re-pegging. In re-pegging, Uncertain exit liquidity, Uncertain exit price, Slippage. In VAMMs, LPs are not needed.
Another problem Tsunami Finance seeks to solve is that of CLOBs (central limit order books). While CLOBs are good for spot, futures, and options trading, they are very expensive to implement on-chain. And again, like VAMMs, LPs cannot participate in CLOBs.
To solve these problems, Tsunami Finance is being designed as a product that is easy, and fun to use for traders and LPs. With the help of dynamic liquidity pricing, traders and LPs can carry out transactions seamlessly.
Components of Tsunami finance
Tsunami finance is a complex DeFi yield farming strategy that involves several components working together to maximize returns. Some of the key components of Tsunami finance are:
- Liquidity pools: Tsunami finance typically involves providing liquidity to various pools on DeFi platforms. Liquidity pools are pools of tokens that are locked up to provide liquidity to a particular DeFi protocol. In exchange for providing liquidity, investors earn rewards in the form of interest or governance tokens.
- Yield farming opportunities: Yield farming opportunities are ways to earn additional rewards on top of the rewards earned from providing liquidity. These opportunities may involve staking tokens on a particular platform or participating in a liquidity mining program.
- Leverage: Tsunami finance often involves using leverage to amplify potential returns. Leverage allows investors to borrow funds to increase their exposure to a particular asset, which can amplify potential returns. However, leverage also increases the risk of loss.
- Risk management: Tsunami finance involves taking on significant risks, so risk management is a critical component of the strategy. This includes diversifying investments across multiple protocols and platforms, using stop-loss orders to limit potential losses, and constantly monitoring investments for any signs of risk.
- Yield optimizer platforms: Yield optimizer platforms are tools that help investors maximize their returns from yield farming. These platforms analyze various yield farming opportunities and liquidity pools to determine the best strategies for maximizing returns while minimizing risk.
Tsunami finance makes it possible for users to access liquidity, trade and swap on-chain.
Tokenomics of Tsunami finance
NAMI is designed as the native token of Tsunami Finance. NAMI will be the governance token of the Tsunami, allowing the DAO to vote on protocol reward mechanics, developer team compensation, and bribe mechanisms.
Holders of NAMI tokens will be granted privileged access to specific Discord channels that are only available to other confirmed NAMI holders. Also, there will be platform features that only NAMI token holders with a specific level of ownership will be able to access, or that will be improved by holding more NAMI.
The team behind Tsunami Finance
The three co-founders of Tsunami Finance are David Siegel, Michael Novogratz, and Ian Balina. David Siegel is a serial entrepreneur and investor who co-founded Westgate Resorts, Sun Capital Partners, and Platinum Equity.
Michael Novogratz, a former investment banker at Goldman Sachs is now a hedge fund manager and venture capitalist. Ian Balina, is an entrepreneur and investor who co-founded Gold Rush Ventures, Social Finance, and Crowdvilla.
Roadmap of Tsunami Finance
According to Tsunami Finance, these are the upcoming features: Pyth Support to serve as protection for the protocol in the event of any shutdown; Referral System where users will be given the opportunity to earn 10% fee rebates and other incentives from Tsunami for inviting users to the platform; NFT-fi that brings NFTs into the Tsunami ecosystem; Social-fi through which users can connect and earn via their social media accounts.
Other updates mentioned in the roadmap are Trading Leaderboards Competitions where users can compete for the highest profit margins and be rewarded with utility-bearing NFTs; making NAMI, the native token, multichain; external asset collateral where users can deposit other tokens verified by Tsunami; implementation of a cross-chain price discovery mechanism.