Introducing NewPairs
A Responsive DeFi DEX Listing Solution
Today, the team behind BUIDLHub, a blockchain automation platform that does everything from on-chain actions, to off-chain queries, to web2.0 app integrations, is thrilled to announce NewPairs. It’s an aggregator for price and volume/liquidity for new liquidity pools from different DEX platforms. More importantly, it’s a way for people to automate on-chain trades as a way to compete against arbitrage.
The earlier you know about token availability, the more rewards you expect to earn. For speculative token investors, asymmetric knowledge and speed is critical. It’s kind of like knowing when a new neighborhood is about to start construction — the earlier you get in to build a house in that neighborhood, the more likely you will profit as the buying market increases and the builder raises the prices. But unlike the slow-moving real estate market, token investors have to act quickly to take advantage of early market making. But, without deep technical chops in DeFi, it’s difficult to know the exact moment when tokens are being added for public trade—until now.
NewPairs is a new product powered by BUIDLHub that offers insight into assets being added to different Automated Market Maker (AMM) platforms. At quick glance, you can see which tokens have been recently added to Uniswap, for example, enabling early awareness of token liquid and availability.
Why — Incentivizing Liquidity
AMMs recreate the traditional order book from centralized crypto exchanges into decentralized liquidity pools. These pools enable token transfers between anonymous participants and enable unique price discovery. Those who provide tokens into pools to earn passive income are called liquidity providers (LPs). These LPs start by depositing tokens into a pool while receiving a yield-bearing token that represents their portion of the pool. The pools ultimately allow others to trade against the assets in the pool and the LPs earn a portion of fees from all transactions in the pool. LP holders can also stake their yield-bearing tokens in DAOs to earn governance tokens which can be exchanged elsewhere enabling both passive income and more rights.
The below graphic provides more insight into the 3 major AMM models.
Knowing these pools exist, and what assets are included in the pools, normally requires closely monitoring the network for transactions bearing specific events that indicate which tokens were added. BUIDLHub does this in the background and uses that information to automatically update the NewPairs dashboard. We’re using automation to work for investors to provide early insight and awareness for new opportunities.
DeFi as the Dominant Narrative
Unless you’ve been living under or a rock, the dominant narrative in the Ethereum ecosystem since June has been DeFi (particularly around Uniswap Killers). DeFi demand has been skyrocketing. The total value locked in protocols liked Curve, Maker, and Aave has surpassed $1 Billion. The total daily active users in total across DEX’s was about 6,000 across IDEX, Uniswap, Kyber, Bancor, and 0x. DEX users are now split mostly between Uniswap V1 and V2, Kyber, and IDEX. Curve and Uniswap V2 accounted for 42% of DEX tradng volume in June, over $660M USD (See Token Insights Q2 DeFI Industry Research Report for more).
Dominant DeFi Aggregators are emerging. Messari’s piece on “Value Capture in the Age of DeFi Aggregators” defined aggregators as maintaining “direct relationships with users, experiencing zero marginal costs in serving them, and decreasing acquisition costs by way of the virtuous cycle between supply and demand. This dynamic results in extreme network effects that create winner-take-all scenarios.” These aggregators are divided between Yield Optimizers, Smart Order Routers, Meta-Assets like Stablecoins, and interfaces for portfolio management.
DeFi traders are ideologically driven and generally bent on Ethereum-based products. Results from dex.blue August 2020 DeFi Traders Survey revealed that 93% of respondents use decentralized exchanges (DEXes). Furthermore, about 30% exclusively use DEXes and 70% also use centralized exchanges (CEXes — like Coinbase, Binance, Gemini). The vast majority DeFi traders either come from traditional finance or crypto trading, where only 4.5% of them would be developing if not trading. 28% use DEXes exclusively (Uniswaps, Dex.blue, Dex.ag, Loopring, dYdX).
All this to say that if you invest in crypto, DeFi tech can quickly outpace your ability to keep up with opportunities — you need automated solutions that can watch the ecosystem and either alert you or take action on your behalf.
Beware of the Bot
Automation doesn’t stop at awareness or insight — it must extend into action. In traditional finance, large trading firms architected trading bots took advantage of micro inefficiences between markets. High frequency trading happened extremely fast but required high trading volume to be most profitable. Yet, since DeFi is so early, the opportunities are huge even at low trade volume. This is amplified by the fact that constant-function market makers like Uniswap will always have price differences with order-book based exchanges. Taking advantage of this difference across exchanges is called arbitrage — and it has become a booming sub-industry within DeFi.
Arbitrage bots exploit the inefficiencies across crypto trading platforms. The bots work as “generalized” front runners scouring the mempool for the latest transactions like DEX trades or oracle updates and front run those transactions according to some algorithm. They look for transactions they can profit from, copy the transaction data, replace the address, and execute the transaction with higher fees to ensure they are mined first. Even transactions that are normally hidden from human eyes (so called “internal” transactions), are vulnerable to front-running. As seen in the Ethereum is a Dark Forest article, these bots are sniping transactions that hold any indication of profit. And “today, the frontrunners are just bots, tomorrow, they will be miners.” Thus the days of simple token speculation are coming to an end — automation will be critical in any speculator’s endeavors to compete with lurking bots waiting to snipe your trades.
Keeping Up in the Markets
Human speculators will need help to keep up within the surge of volume within DeFi DEXes. They’ll need to play multiple sides within highly competitive battle for innovation in AMMs, devise strategies or execute trades despite deeper arbitrage bot saturation, account for execution time and transaction costs with continuing scaling challenges, while staying afloat of the implications for the growing bubble of Total Value Locked in different protocols. And rather than enhance our brains with chips to compete with AI, maybe there is a simpler way to begin the fight.
We engineered NewPairs to service common users types across the current marketplace of DeFi DEX solutions.
The early DeFi DEX marketplace of users is composed of about 6,000–7,000 individuals, divided between technical arbitrageurs, nontechnical retail traders, technical part-timers, DeFi full-time speculators, crypto hedge funds and whales. Convenience, simplicity, trust are important considerations for manual decision making for any one of these groups. As opposed to purchasing a roboset from TokenSets, allocating ETH to PieDAO, or getting exposure to tokens with automatic token rebalances or payouts; traders making manual decisions must rely on something more powerful to take action.
From Token Insights.
To participate and maximize their returns, these groups need access to on-chain/off-chain automations and notifications.
NewPairs Story
BUIDLHub is a powerful automation platform with a familiar interface to anyone who has ever used Zapier or IFTTT. One thing we’ve learned since launching earlier this year is that the technology is early and it’s too early to be generalizable. We needed to create an example of how our technology can drive value through automation and responsive insight awareness. At the same time, we need to evaluate the market demand for automation and notifications within the DeFi sector.
We created the NewPairs interface, more or less, as a market experiment; but also to give people insight into early movements in AMM and highlight BUIDLHub’s ability to power other platform products.
NewPairs Rollout
For the next two weeks (from August 29th to 11:59 PM EST September 15th), NewPairs is offering a Limited Time discount program to features that will be available either on NewPairs, through BUIDLHub, or in a separate product line tailored to DeFi automated trading and monitoring.
Go onto the NewPairs site, fill out the brief survey after clicking “Notify Me” or “Automate Now”. To prove you have access to the early discount, we are issuing a POAP badge that you can later show as proof to receive your discount. The badge will give you a 6-month, 75% discount on our products.
Prioritizing features.
There’s a lot of noise around what to automate and what is important. We want the market to reflect what is most valuable to all participants — namely cutting cost, improving reliability, making it way more convenient for just getting started or performing complex operations.
- We’ll focus on the NewPairs rollout and gauging market and user feedback.
- We are asking for your opinion on a few features that others have mentioned to us. Expect the integration between NewPairs and BUIDLHub to be very close. Capabilities featured on the NewPairs interface will be powered by our own automation platform on BUIDLHub.
BUIDLHub + NewPairs
Existing automations and notification technology will get implemented and improved for NewPairs features.
- Help us decide what features we should select for on the NewPairs website by taking the surveys.
- Tell us what features you think we’re missing in our chats (linked below) or by sending us a message.
- Today with BUIDLHub, you can do any of the following:
- Ampleforth Rebase Event | Use this template now!
- Uniswap Pair Listing Automation | Use this template now!
- Ethereum Gas Price Change Detection | Use this template now!
Stay Up-to-Date
- Follow our BUIDLHub accounts on Twitter. Join our Telegram and Discord.
- Share the ❤️ in our chats and reach out to us by email to suggest new integrations!
- Explore BUIDLHub automation templates to reduce your time to outcomes in DWeb.
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