October 15, 2022, the date of our first article on Medium, in which we introduced THENA to the public. A lot of things have changed since then, from our 6-digits funding round to being one of the biggest DEXs in all of DeFi. In 2023 THENA generated a total of $11.4 MILLION in revenue to veTHE and theNFT holders.
Today, we’re happy to publish our first article of this new year, where we will resume our achievements of the past year and our roadmap for the first half of 2024, with additional alpha dropped in the Anniversary Space hosted Jan 17.
But, first of all, let’s take a step back for those who may be reading about us for the first time and wondering, “What is THENA?”
THE ve(💜,🏛️) Basics
In 2020, the DeFi space saw a remarkable change with Compound’s launch of $COMP and the subsequent explosion of liquidity mining & DeFi tokens. Liquidity mining has pushed DeFi to new heights by providing token-based incentives to attract specific behaviours from stakeholders, such as providing liquidity on a DEX or collateral on a money market. However, this rise of DeFi activity through token-based incentives came with an intrinsic problem. Liquidity incentives were quasi-stationary, creating inefficiencies as those incentives often ended up in pools with low utilization rates.
As you may imagine, this is not optimal for a company (in this case, a DEX) that is spending money (token emissions) to bootstrap and grow its activity, wasting part of it and reducing its profit maximization. For this reason, new solutions have been developed, such as Concentrated Liquidity Automated Market Makers (CLAMM) and Gauge voting systems. THENA integrates both technologies into the protocol. However, we’ll cover CLAMM shortly after. Let’s focus on the second one now.
On THENA, farming incentives are determined via gauge weight votes, a model inspired by Curve Finance’s “vote-escrowed” model. On our platform, periods are separated into weekly epochs, and during each epoch, individuals who have converted $THE (our native token) into $veTHE can vote on emission levels. The emissions a gauge will receive are proportionate to the share of the total votes at the end of a given epoch.
This Gauge voting system, along with our revised Solidly-inspired AMM, makes us one of the best liquidity-efficient DEXs in the entire DeFi space.
What we mean by that is that frequently, a DeFi protocol is evaluated by its TVL, which can be a misleading indicator of how well a protocol is actually doing. So, we must dig deeper and ask: how effective is the protocol at converting available working capital into tangible value?
Let’s have a short look at Uniswap’s 7-day numbers:
According to Dune Analytics, UniswapV3 generated $11.84M in fees over the past seven days (as of 13th January), while the top 30 pairs did $5.84M, or 49.31% of those fees. Those top pairs only account for $1.08B or 30.08% of its total TVL. So what is a big part of the other $3.58B or 69.92% of TVL doing? The short answer is not much.
Now, you’re likely thinking that Solidly is different and optimizes this issue. You’re right. In contrast to Uniswap, which returns 0% of fees to UNI holders, Solidly distributes 100% of the fees to its governance token. In turn, liquidity providers earn 100% of the protocol emissions and LP bribes.
However, this model, introduced by Andre Cronje, failed as emissions dried up and liquidity fled the ecosystem.
So how can THENA, which is heavily inspired by Solidly, avoid a similar fate? The protocol has reengineered token distribution, locking mechanics, and emission schedule to achieve what Solidly could not: sustainability.
THE Grand Vision
- THE holders vote-escrow (lock) tokens to receive veTHE
- veTHE holders vote on liquidity pools + bribers incentivize pools
- THE is distributed to pools based on votes
- veTHE holders receive fees + bribes from the pools they voted on
Why is this design effective? Game theory.
veTHE holders will vote on the pools they believe will generate the most fees and bribes. If other holders vote similarly, more THE emissions will be distributed to these pools. Higher emissions attract more liquidity, which reduces slippage. Lower slippage attracts more trading volume, generating more fees for the pool.
Instead of directly incentivizing liquidity through emissions, THENA incentivizes THE holders to lock, vote, and direct emissions in a profit-maximizing way.
In simple words, in the THENA ecosystem, everyone is fairly incentivized to utilize the protocol, as emissions go where fees are.
2023 Recap
Now that we understand what THENA is, we can give a quick look at each of our main achievements in the past year.
FUSION
After launching THENA in January, in the span of three months, we were a key player in the BNB ecosystem. These were our numbers:
- Hit $170 million in TVL at peak
- Reached $100+ million in weekly trading volume
- Became 3rd biggest DEX on BNB Chain by volume
But this was just the beginning. In March, in collaboration with Algebra and Gamma Strategies, we introduced FUSION, our Concentrated Liquidity AMM, improving capital efficiency by allowing users to focus their funds with a tighter price range, focusing liquidity in these pools at the prices where it will be most needed.
ALPHA
After a Summer dedicated to building, building, building, and again, building, we released our new product, ALPHA. After this release, THENA’s fees have been in up-only mode.
Powered by the SYMMIO engine, ALPHA is our perpetual branch, allowing users to trade over 150 assets up to 60x leverage. What makes ALPHA a top-of-notch product is its Intent-Based OTC derivatives system, which is more capital efficient than AMM and orderbook-based models, and its zero reliance on oracles, avoiding related vulnerabilities and inefficiencies.
CCIP Integration
Shortly after, we began integrating Chainlink CCIP. For those living under the rocks, it’s an interoperability solution that allows tokens to be transferred across different chains without bridges or related methods. We’ve integrated the CCIP to facilitate cross-chain transfers of THENA’s native token, THE, and soon also enable the cross-chain fee distribution mechanism of veTHE and several other functions across BNB and opBNB.
Onchain Market Making Vaults
In November we unveiled new algorithmic strategies for concentrated liquidity pools. The new onchain market-making vaults were the first of their kind on BNB Chain, and proved to be an instant success.
The simple single token vaults allow users to deposit their favorite assets. Since launch, the selection has been expanded to include partner vaults featuring tokens from XCAD Network and ApeBond.
Funding Round
Here is December, probably the most significant month for THENA over the past year. At the beginning of the month, we announced our $600,000 strategic investment from Orbs, with whom we introduced dLIMIT and dTWAP, boosting our capital and confirming we’re going on the right path.
We’ve teamed up with a lot of DEXs, but working with THENA has been a standout experience. Their team’s energy and fresh ideas are really something. With this partnership, we’re excited to see THENA grow and continue to be among the first venues to use Orbs Network Layer-3 tech in production. Looking forward to seeing this partnership power the next bull run!
Ran Hammer, Orbs VP BizDev
Shortly after, THE Liquidity Hub was released, introducing gasless trading and tokens like CAKE to THENA.
opBNB Deployment
In December we also deployed THENA on the opBNB, a Layer-2 solution built using the OP stack to bring improved speed and lower cost to the BNB ecosystem. It was a major step towards making DeFi accessible to everyone. And, to add more fuel to the fire, we celebrated the event with a $30,000 airdrop for early users.
2024 Q1 Roadmap — THE Expansion
We closed 2023 with a bang, but what we have planned for this year doesn’t come even close to what happened in the previous. We’ll publish an article at the beginning of each quarter so you can stay updated on every step we take.
The mantra for this quarter is “DeFi easy for everyone”. Said this, let’s see what we are cooking.
New UI & ALPHA on opBNB
THENA, as you know it, won’t exist anymore. We’re changing the whole UI of the platform and refresh our brand identity in order to surf this year with a whole new style.
Afterward, once the platform has worn its new dress, ALPHA will land on opBNB. We strongly believe this Layer-2 will grow a lot over this year, and we want to ride this trend and position ourselves among the leaders in the network, as we have been doing for the past month.
We are taking the leadership in shaping the opBNB DeFi ecosystem by bringing our vast network of partners in and adding new features to make the onboarding as seamless as possible. Indeed, we’re integrating into the platform a social login feature, one of the most important integrations we’ve ever done, as a new wave of retail users is incoming, and it will be able to utilize THENA without needing a wallet and its seed phrase. This, along with the fiat onramp integrated a few months ago (and soon offramp), makes THENA as easy as any other Web2 app to utilize. We aim to combine these features, the almost gasless transactions on opBNB, marketing efforts, and new partnerships to bootstrap the opBNB network and drive its adoption aggressively throughout this year.
We are most excited about ALPHA’s release on opBNB, as we will be introducing a plethora of new features and upgrades, making the user experience better than ever before. This will also come with a significant increase in available open interest.
ARENA
Our next attempt to enhance the platform and make it a complete ecosystem is ARENA, a unique social hub for social trading natively integrated into THENA.
In ARENA, partners can create permissionless and fully customizable trading competitions on both spot and perpetual markets to engage their community, create engagement around their tokens, and boost their brand awareness.
Our goal is also to allow KOLs to run these rewarded competitions and involve their communities to boost their engagement and strengthen their community. Each partner will have a profile page highlighting activity, achievements, and hyperlinks toward their socials. Therefore, as the ARENA network effect increases, KOLs and protocols will be able to leverage the platform as a user acquisition funnel to broaden their audience.
Example of a KOL run competition:
$1,000 THENA contribution
$10 Entry fee (freely set, can be zero)
1,000 Participants (maximum increased in later versions)
= $11,000 prize pool. KOL can take up to 25% for their marketing efforts.
From a trader’s point of view, ARENA allows them to partake in any competition and earn rewards based on their trading performance. Think of the release only as a starting point, with much more to come.
THENA V3
Afterward, to conclude the first quarter in the best way possible, we plan to come up with THENA V3, an improved version under any aspect of the current platform.
With the new version of the platform, we’ll introduce Algebra 2.0 (Algebra Integral) plugins such as fee discounts, limit orders, and others. These plugins are similar to the hooks introduced by Uniswap V4 but under developed by Algebra prior. You can imagine them as “special functions” that the liquidity pool can make before and after the main user actions. If a plugin is attached to the pool and a setting corresponding to a given hook is activated, the liquidity pool will call a function from the plugin.
Furthermore, you will be able to experience a more seamless experience with the V3 upgrade. We’re integrating cross-chain technologies to allow everyone to vote and claim their THE on different chains, simplifying their experience. You won’t have to worry anymore about which network you’re on. Just log into the platform and do what you are used to. We will care for all the rest.
We have also recently introduced new liquidity managers, such as DefiEdge, and ICHI. Expect this trend to continue, with more strategies under development.
This is just a brief hint on what V3 will bring to our platform. Stay tuned for our upcoming article entirely dedicated to this major upgrade.
BNB Chain Hackathon — Unleashing the Full Capability of Plugins
In preparation for the V3, we are sponsoring the BNB Chain Innovation Hackathon, where we are challenging you to develop plugins (aka hooks) for THENA’s concentrated liquidity AMM. The main goal is to leverage developers’ technical skills and creativity to improve THENA’s ecosystem with innovative financial features.
Participants are tasked with designing and coding hooks that can seamlessly integrate with THENA, contributing to a more robust and versatile AMM platform. These hooks could range from simple features like automated portfolio rebalancing to more complex financial instruments that could redefine liquidity management and trading strategies on the DEX.
The three most innovative and impactful hooks will share a prize pool of $20,000 (increased from $8,000), including potential integration into the THENA DEX ecosystem.
Winners will also receive exposure within the BNB Chain community and the chance to work alongside the THENA development team to refine and deploy their creations.
Join the Innovation Hackathon and help us to push forward the whole BNB ecosystem. Make sure to also check out BNB Chain blog for more details.
