THENA is THE native liquidity layer & AMM on BNB Chain
Before working on THENA, we were a team of dedicated builders with vast experience in DeFi. When Solidly launched, we were able to observe both its promise and its inherent flaws. We realized that Solidly could not disappear without leaving a dent in the AMM field, and that BNB Chain, due to its maturity, widespread adoption, and support from several stakeholders, would be an ideal location to launch an enhanced version.
We envision THENA as being the native liquidity layer of BNB Chain, enabling value creation by opening the gates for new protocols that wish to solve the cold start liquidity problem, as well as for established protocols looking for a long-term solution to reduce costs to incentivize their liquidity. THENA is a public good owned by protocols and users, with both parties contributing to THENA's status as the leading AMM. We believe that in a decentralized and open-source economy, a collaborative strategy is essential to outrun the competition and establish your product as a market leader.
- Inefficiencies in liquidity incentives allocation
With the rise of liquidity mining programs and UNI V2 based DEXs, DeFi saw considerable growth for the past 2 years. However, current liquidity incentives are quasi-stationary, creating inefficiencies as those incentives often end up in pools with low utilization rates, which is far from optimal when stakeholders should be targeting an equilibrium close to profit maximization → Incentive liquidity where it generates the most fees. The gauge voting system brought a novel way to redirect incentives that aligns the interest of token holders and liquidity providers.
- Stationary incentives
Liquidity mining has pushed DeFi to new heights by providing token-based incentives to attract specific behaviors from stakeholders e.g. providing liquidity on a DEX or collateral on a money market. Traditionally, teams behind DEXs want to maximize revenue, which translates into optimizing incentives distribution based on pools that will generate the most fees. This process needs constant iteration and analysis from teams and naturally puts barriers to entry for smaller protocols looking to bootstrap liquidity as they do not generate enough volume.
- Gauge voting system
On THENA, farming incentives are determined via gauge weight votes, a model inspired by Curve Finance's "vote-escrowed" model. On THENA, periods are separated into weekly epochs. During each epoch, individuals who have converted their
veTHEtokens are able to 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. THENA's Gauge Weight Voting mechanism consists of a Bribing Marketplace where protocols can deposit bribes to acquire
veTHEvotes in favor of their gauges. At the completion of the epoch, the holders who voted in favor of a gauge can claim the associated bribes.
- The Solidly concept
Solidly is an automated market maker (AMM) and a liquidity layer, originally built by Andre Cronje on Fantom, that offers low-cost, near-zero slippage transactions for highly correlated and uncorrelated tokens. In contrast to the majority of AMMs, its mechanism design focuses on driving fee generation as opposed to only incentivizing liquidity provision. This assists Solidly in addressing existing issues with AMMs, such as fee distribution, liquidity mining, and bootstrapping. Solidly iterates on current AMM frameworks with increased incentives, bribing, and vote-escrowed tokens, while preserving popular features such as flashloan-proof time-weighted average price (TWAP). It has its own upkeep-free TWAP and flashloan-proof quotation.
By resolving the basic shortcomings of Solidly and adding its own innovations, THENA tackles these difficulties and delivers an attractive proposition. To recall, Solidly's fundamental innovation was to correlate protocol emissions with fees generated, rather than purely incentivizing liquidity. To do this, protocols and other significant stakeholders would be able to control THENA’s emissions by acquiring and locking THE, our native token, enabling stakeholders to direct future emissions and collect fees (called bribes in Solidly) from the pools they voted for.
THENA has reworked the Solidly codebase to guarantee that the protocol will function as intended, allowing voters to properly compensate liquidity providers for impermanent loss, while being aligned with the core objectives of the protocol—namely increasing fee generation.
Solidly had numerous major challenges that kept it from succeeding in the Fantom ecosystem. Here are some of the improvements made:
- Fixed the marketplace for emissions
- Fixed the emission schedule
- Lowered the impact of anti-dilution mechanism
- Improved the initial distribution
- Referral system to reinforce the positive feedback mechanism
- Thenian NFT (theNFT) minters as co-founders and holders as the core community contributing to THENA's success
- Long list of committed launch partners
- Dedicated core team working on improvements