An Introduction to Thena
Thena is a next generation Automated Market Maker (AMM) launching soon on the BNB Chain. It is set to become the first truly native liquidity layer within the BNB ecosystem that has a “by design” collaborative approach.
The principle of a “fair launch” is rightly lauded within the cryptosphere. We intend to uphold this ethos with Thena. Users can become early backers of the protocol through a well thought out, clear process, designed to empower the individual — to create a group of “Community VCs”.
The launch will come with two key prongs:
- theNFT fundraiser (non-fungible token with revenue streams)
- A decentralized airdrop to major protocols and users that meet our key criteria
BNB Chain and Thena
BNB Chain has, over the course of the last half decade, grown and developed massively from its original launch in 2017. In 2022, BNB Chain has a unique value proposition — one which is impossible to ignore. The fundamental architecture has gone through a substantial evolution since inception, prioritizing a shift towards modularity. In addition, there are plans currently being fleshed out to introduce all important zk-rollups — one route to much improved scalability.
By deploying Thena onto BNB Chain, we will be able to reach a massive group of early adopters and visionaries. These unique users will then be the lifeblood that helps to drive forward not just the project itself, but also the overall vision for DeFi as a whole — an opportunity for the masses. For the BNB Chain, Thena will be a new, innovative way for protocols to incentivize liquidity.
Thena fixes the current incentive mismatch and the pricing inefficiencies with existing platforms on the chain. The principal driver of adoption is growth, and the solution we are offering addresses just that by introducing a new, demand-driven model. The decentralized airdrop to those that fit the important criteria we laid out earlier will help to devolve key power to those that are a positive force in the BNB Chain ecosystem. Ultimately, the main goal is to drive sustainable revenue generation for all stakeholders involved.
Why BNB Chain?
There were a range of factors that influenced our decision to use the BNB Chain. We can separate them into two key areas:
- Infrastructure and features
- Opportunity
Let’s start with infrastructure and features. BNB Chain, as mentioned above, is scalable. This is a massively important element to us, as we want to reach as many users as possible. Additionally, BNB Chain benefits from having deep, in-built hooks to the overall Binance ecosystem. Furthermore, the DeFi ecosystem on the BNB Chain is vast and already relatively well interconnected.
Now let’s explore why this is an opportunity. BNB Chain currently is inefficiently incentivizing liquidity. 97% of DEXs liquidity is located in pools incentivized with centralized & scheduled farming emissions — rather than being driven by free market forces. Because of this, LP’s (liquidity providers) deposit decisions are not based on fee generation. Thena fixes it.
Currently swap prices are suboptimal, partly due to the lack of a forward thinking, requiring a modern solution. 95% of DEX liquidity is located in basic, old, UniV2 style AMMs. UniV2 has shown tremendous adoption for volatile pairs — but it is highly inefficient for stablecoins and correlated assets. Thena changes this, too.
There are some cutting edge tech DEXs emerging, but they are built on fundamentally dubious premise that “near to zero” swap fee structures are sustainable, in order to drive growth. Without fee revenue generation for providers, this will always be a short term sugar rush, with very little long term sustainability. Thena is built to last.
Core Pillars
Thena draws inspiration from Solidly, which is an Automated Market Maker (AMM) and a liquidity layer originally built by Andre Cronje on Fantom — offering low-cost, near-zero slippage transactions for highly correlated and uncorrelated tokens. Thena on the other hand has several key differentiators that makes it a superior liquidity layer & AMM.
Firstly, pool fees are captured by gauge voters, instead of the LP (liquidity provider). As a result, voters tend to vote for the most productive pools, making incentives emissions more usefully targeted:
In turn, this aligns the interest of veNFT holders with the success of the protocol.
The Solidly approach uses a clever mixture of the Curve model; incentivizing token locking with voting power over gauges and the added benefit of access to the protocol fees, blended with the Olympus model; commonly known as “ve(3,3)” tokenomics, which notably provide a “rebase mechanism” that helps to shield lockers from dilution. This mechanism is designed to offer better incentives for long term holders and realigns interests of stakeholders by redirecting fees to voters instead of LPs.
This blend of models helps to solve the “cold start” liquidity problem by enabling a free market for incentives, allowing protocols to exchange tokens for gauge votes. This in turn reduces the cost of incentivizing liquidity and means less selling pressure on the protocol’s token — a win win.
Underlying Technology
Underneath the hood, the technology driving Thena is a vAMM/sAMM hybrid model, enabling more efficient routing between assets.
sAMM — stable pools derived from the Curve pools contract. This type of pool is designed specifically for assets that are expected to consistently trade at near parity, such as different varieties of stablecoins or synthetics. Traders enjoy tighter spreads and lower price impact. Compared to the vAMM model, the sAMM model allows greater imbalance between two assets before users then encounter a significant price impact. These pools allow for larger trades and require less liquidity to work efficiently.
vAMM — traditional Uniswap V2 for volatile assets, which is exceedingly commonplace in the DeFi landscape, as mentioned above.
Upgrading the Solidly Experience
Thena is designed to be an improvement upon the original Solidly experience, and as such comes with some crucial changes, highlighted below.
We’ve adjusted the Solidly fee structure to create the ultimate sweet spot between long term revenue generation and highly competitive trading prices:
After detailed research, we found out that this adjusted fee structure enables competitive swap prices, as well as strong revenue generation for veTHE voters, leading to an increase in both locking rate and participation. Transaction fees can be reduced over time as trading volume ramps up.
We also thought deeply about how we could rework the initial bribing experience. The bribing market has been redesigned to be resilient against mercenary capital and to instead promote cooperation. veTHE holders receive rewards at the end of the epoch in the form of a claimable lump sum. This means that bribe farming is no longer possible. Negative voting has been removed. Instead, new tokens will be whitelisted by our multisig.
There was also plenty to learn from the Curve-Convex flywheel inefficiencies that have become apparent over the past few years. The Solidly tokenomics included a feature first introduced by Curve — boost farming. We wanted to avoid protocols acting as a Convex layer on top of Thena, taking a cut on the emissions while accumulating governance influence over the underlying protocol, and thus decided to not include it. Thena aims to have a decentralized distribution, allowing many protocols to partake in its governance.
The anti-dilution mechanism introduced by the ve(3,3) tokenomics has also been capped to protect fully against dilution until Thena reaches a 30% locking rate, at any rate above that, anti-dilution will become partial, reducing as the locking rate increases.
A Liquidity Layer for the Community
Thena is the first AMM that aligns the interests of all the main stakeholders of a typical AMM (on the BNB Chain) — including token holders, LPs, users and protocols.
veTHE holders are incentivized to vote either for the highest volume pools (because the greater the volume, the greater the amount of fees produced as a result), or the ones being bribed by protocols seeking to bootstrap their liquidity. This allows these protocols to create their own flywheel, if the token generates strong volume.
LPs are incentivized with emissions driven by “Real Yield” based metrics.
Traders benefit from the low slippage thanks to the liquidity provided, in concert with the latest and greatest battle-tested vAMM / sAMM tech.
Protocols have access to a cooperation oriented liquidity layer. They benefit from capital efficient trading conditions for their tokens, and they can incentivize their liquidity via bribes offered to veTHE holders to compensate for the temporary lack of trading activity.
Kickstarting Growth on Thena
We are ambitious about providing the best conditions possible to get Thena off to an explosive start.
We’ll be launching the THENIAN NFT (theNFT) collection — a novel approach that allows Thena to launch with a strong community and incentives without having to rely on mercenary capital. The goal is to raise funds, 60% of which will go back to Thena by incentivizing stakeholders, and to bootstrap a community of strong supporters whose interests align with the protocol.
The designs draw inspiration from ancient Greek mythology, similar to our branding. They were engineered using the DALL-E 2 AI engine to create something truly unique. We will reveal more about these financial NFTs in the coming days.
We also have a novel on-chain referral system built with Muon. Users will be able to generate a referral to share with others in order to get a 5 to 15% rebate for each trade made through the link. Rebate depends on the tier reached by that referrer — the more volume you generate, the higher the tier. Users of the referral link will benefit too — they earn lottery tickets (tranches based on volume) that will give them access to a weekly lottery.
THE Vision
Thena is an ambitious attempt to create an inclusive, Solidly inspired liquidity layer that incentivizes users who have confidence in the future of DeFi in an effort to capture long term value.
It aims to be the liquidity backbone of BNB Chain, creating an easier process for new and existing protocols to onboard, through capital efficient liquidity bootstrapping. We want to create a protocol that endures and to nurture and recognise talent from within the community. There will be a fair launch, with no pre-seed or seed rounds — instead, theNFTs will give users an opportunity to buy access to Thena’s cash flow.
Our co-operative approach, such as the initial veTHE airdrop for protocols — a decentralized and fair distribution — will allow us to onboard the original users of the BNB Chain and to reward their exploratory nature.
We are excited to spearhead this new chapter on the BNB Chain and look forward to revealing more about theNFTs and our launch partners next week. A new era of collaboration.
Become part of the story here.
