Levana is Headed for the Skies — Check Out Our Roadmap

Published in

Levana Protocol

7 min readJul 6, 2022

Legal Disclaimer: Roadmaps are often subject to change. Assume everything here is a suggestion and don’t believe anything.

What is Levana?

The name Levana stands for Leverage Any Asset. Levana is a set of DeFi services that provide various ways to generate leveraged assets. The flagship product from Levana is a novel Perpetual Swap designed to prevent or reduce cascading liquidations, insolvency, and price manipulation, like the ones seen in the recent market crash.

Levana also creates stories, comics, animations, evolutionary NFTs, games, and other forms of entertainment proven to attract attention from a wider audience than the current small user base of DeFi Leverage traders.

Read the Levana Lore to get more familiar with the story.

Learn more about the connection between GameFi and Perpetual Swaps in our DeFitainment blog post.

What are Perpetual Swaps?

Perpetual Swaps are a popular form of leverage trading. In a perpetual swap, similar to a futures contract, the trader is taking a long or short position collateralized by a stable asset, such as USDC. As the name suggests, Perpetual contracts have no expiration date.

Leverage trading within Defi is still at an early stage. Many products brought to market have suffered from failure and loss of funds due to attacks, extreme market volatility, and insolvency. When these failures happen, liquidity providers, traders, and participants in a risk or insurance pool may all suffer from losses that could have been prevented.

Flash loans, market crashes, and sudden reduction in volume from a risk pool or liquidity pool can result in a situation where a protocol needs to pay out more assets than it has access to. This is known as an insolvency. Leverage and liquidations have been at the top of the crypto world's mind due to the numerous recent blowups.

Another issue that has plagued the leverage industry is cascading liquidations. Cascading liquidations means that the closing of one position, due to a trader taking profits or being liquidated, can cause another trader’s position to be forced into liquidation. In some situations, this creates a chain reaction where many accounts are wiped out one after another, as each liquidation forces another until a market intervention occurs.

Levana’s Perpetual Swap V2 (code named Ruth) is designed to specifically prevent or reduce these and other scenarios.

What are Levana’s other products?

Entertainment

Levana created the most popular NFT collection on Terra before the crash. Over 14,000 community members held Levana NFTs. Levana had over 10,000 monthly active users on a collection of engaging mini-games.

Levana created a rich world of dragons on Mars, designed to be a world with the depth of Lord of the Rings, Star Wars, and Harry Potter. This narrative differentiates Levana from other DeFi protocols and helps to attract the next generation of participants to crypto, who focus more on NFTs and games than on complex DeFi protocols such as leverage products.

DeFi

Levana created a leveraged ETF, called LLI (Levana Leverage Index Tokens) using collateral from Mars Protocol.

Levana built an American-style Option trading platform with an on-chain order book.

What was Levana doing before the Terra crash?

Levana built and integrated into Mars protocol a leveraged ETF. This product, called LLI, completed audits by Oak Security and Halborn. A pool of Luna was collected from donations from the community that participated in Levana’s P2E mini-games.

For more details, read the Levana Primer.

Levana launched 8 mini-games which engaged more than 10K monthly active users.

How has the crash impacted Levana?

Levana lost a considerable amount of operating capital and funds for the initial leverage pools with the collapse of UST and LUNA (now LUNC).

Luckily treasury funds were also held in BTC, ETH, and centralized stablecoins. Unfortunately, many of these crypto-native assets also reduced value significantly. After the crash of the general market, Levana made the tough choice to reduce headcount by about half of the full-time contributors and currently has a runway to continue building out the core DeFi products for almost 2 years.

Like all projects, we are bracing ourselves for a long crypto winter, and the VCs involved in the project have recommended 2 years as a minimum for budgeting, and to reduce spending as much as possible to ensure survival during these tough times.

While this has been a serious setback in terms of funding allocated to build gaming experiences in crypto, and a capital pool for initial liquidity in an ETF product, Levana came out better than most protocols building on Terra. We will keep building, a bit more focused, and a bit slower, but we will survive the winter and continue to innovate in the crypto space.

What has Levana been doing since the crash?

Levana took 4 weeks to explore the landscape of blockchains in today’s environment. We created a comprehensive analysis of over 30 blockchains and published it to the Terra community.

We looked for grants to help to rebuild the funds lost for launching a leveraged ETF, for covering the costs of building GameFi P2E experiences and a larger-scale game.

While the market continued to dump, we found it harder and harder to get the size of funding required to continue Levana’s original vision of a comprehensive game with a balanced economy that would be fun to play and act as a funnel to the world of DeFi.

Many platforms opened up a Terra developers fund designed to help projects out that were rekt by the Terra collapse, with most grant programs focusing primarily on smaller-sized projects that had lost all funding.

We had extended conversations with Chronos, Near, Polygon, Moonbeam, Osmosis, Juno, and SCRT. These communities were warm, enthusiastic, and impressive and many asked us to bring our entire product suite to their chain.

We have decided to take a different approach in moving forward. We will not be giving exclusivity regarding any product offering from Levana at this time. Cosmos offers a growing variety of app chains coming to market, and we are excited to deploy projects to each chain based on the chain’s strengths, community, and product market fit. We will be splitting up various products under the Levana umbrella into different chains, and exploring these communities in order to best find a product-market fit.

We are currently learning more about building a dedicated app chain on Cosmos, and may decide to move in that direction in the future.

Product Destination

Leveraged ETF (LLI) — We are still looking for a good home for this, but currently do not have any funding to create the initial pool of capital, and we don’t have a lending market to create a credit line for generating leverage.

Perps v1 — Perps v1 is ready to go live, the code was audited, and thousands of people interacted with the app on testnet. Given all the data we have acquired since the crash, we see that the world needs a better perpetual swap, one that cannot become insolvent and is more resilient to manipulation in times of adversarial market conditions. We do not intend to release this version of the product from testnet to mainnet.

Perps v2 — We made major innovations and improvements to v1. We are currently writing the math and whitepaper for Perps v2 and have begun the smart contract work based on industry experts' feedback on our novel approach to creating Perps. We will be releasing a testnet version of Perps v2 this summer.

Options Trading — We will be releasing on testnet in the next few weeks on Juno initially followed by Osmosis.

Dragon Cave — We will be warping our NFT collections, Loot, nested eggs, dust, and dragon snacks to Juno and rebuilding the cave on Juno. We plan to launch our dragon hatching at the end of August on Juno.

REKT Dragons — We will be minting on Ethereum this week. Once cross-chain NFT support is live on Stargaze we will be bridging the REKT Dragons to Cosmos and start to experiment. The estimated timeline for cross-chain NFT support is late August / early September. Pending governance approval, Stargaze will airdrop Stars tokens to all REKT Dragon wallet holders. Details will be released when available.