In the dynamic landscape of DeFi, continuous evolution is paramount to staying competitive and meeting the ever-changing needs of traders. When Level Finance debuted in December 2022 on the BNB chain, it marked the beginning of a promising journey. Our significant market share was a testament to our robust platform. With the transition to Arbitrum, we recognized the imperative for evolution. Hence, the genesis of Level 2.0 was conceptualized, aiming to raise the bar in decentralized trading.

Tailored for the Professional Trader

Level 2.0 is envisioned as a full-fledged decentralized exchange with an on-chain orderbook system, carving a niche for professional traders. Unlike its predecessor, Level 2.0 extends its asset support beyond crypto pairs, welcoming Forex and potentially synthetic stocks, commodities and other asset classes to its trading arena. This broader asset spectrum is complemented by much higher available leverage on trades, facilitated through cross-margin, allowing traders to deposit BTC, ETH, or stablecoins as collateral. The quintessence of Level 2.0 is to provide a professional trading platform & liquidity marketplace while ensuring users retain control over their assets.

An Enhanced Trading Experience

Top notch user experience has always been paramount at Level. Similarly, the user-centric design of Level 2.0 brings a slew of advanced trading utilities, elevating the trading experience to be more akin to what traders would expect from centralized exchanges. The intuitive UI/UX, coupled with a host of functional trading features, provides a seamless trading environment, even for those relatively new to blockchain and DeFi.

Transition of Level 1.0: Staking and Market Making As a Service

As Level 2.0 takes the center stage, Level 1.0 pivots to a model of “staking as a service” or “market making as a service” (MMaaS) creating a symbiotic relationship between the two. Users with assets like ETH or USDT can earn yields in a risk-isolated environment. Level 1.0 will play a vital role as a market maker for Level 2.0, facilitating liquidity as we transition towards an on-chain order book system. The Level DAO Treasury currently holds $10M in bluechip assets, which can be utilized effectively for Level 2.0.

A Sustainable Ecosystem for Future DeFi Projects

We chose not to launch a separate project or token, believing our innovative existing dual token system with LVL and LGO lays a solid foundation for future DeFi projects. This system operates at full reserve, with all protocol profits and fees backing a redeemable token. Such a structure fosters the development of innovative and creative products, marking a significant stride towards a sustainable DeFi ecosystem.

Streamlined Cross Chain liquidity

Level 2.0 introduces groundbreaking cross-chain liquidity. Tokens traded can be effortlessly settled on their native chains, be it BTC on Bitcoin or ETH on Ethereum L1. Beyond this, we address a common DeFi challenge: fragmented liquidity pools. With Level 2.0, traders can tap into unified pool liquidity, eliminating inefficiencies and providing a smoother, more consolidated trading experience.

The Road Ahead: Fostering an Open Marketplace

Level 2.0 is set to break away from the constraints of the Automated Market Maker (AMM) model, transitioning to a setup where the AMM is a participant rather than the platform itself. This shift paves the way for a free market ecosystem, distributing the platform’s value among liquidity providers and token holders. The roadmap reflects our ambition, albeit with adaptable timelines to ensure the delivery of a robust and reliable trading platform.

Q4 – 2023: On-chain Orderbook Testnet

• Users can explore the brand new trading UI on the Arbitrum Goerli testnet.
• Features will be refined and improved based on user interactions and feedback.

Q1 – 2024: Stress Test Bounty on Testnet

• Users can participate in an extensive testnet trading contest with huge bounty rewards available.
• Stake LVL to earn faucet testnet tokens in order to trade on level 2.0 Alpha.

Q1 – 2024: Synthetic Liquidity Pool and Market Making as a Service

• The liquidity pool will operate in a manner akin to the current Level liquidity pool. Through our MMaaS, the protocol will initiate long positions on Level 2.0 and short positions on the synthetic liquidity pool, generating facilitation fees in the process.

Q2 – 2024: Level 2.0 Beta on Main net

• Comprehensive Beta release with the majority of features enabled.

Envisioning a Blockchain-Agnostic Liquidity Marketplace

Level 2.0 strives to bridge the gap between the blockchain realm and traditional trading platforms. By abstracting many blockchain interactions and exploring solutions like trustless bridging and cross-chain settlement, we aim to offer a seamless experience even for users unfamiliar with blockchain.

The voyage from Level Finance’s inception to the unveiling of Level 2.0 encapsulates our relentless endeavor to cater to the diverse needs of the trading community. As we near the launch, we invite traders to catch a glimpse of what’s to come on our newly designed landing page live now at level.finance. Level 2.0 is not just an upgrade; it’s a significant leap towards fostering a holistic and user-friendly trading environment in the DeFi space.

Continued Growth and Innovation

While Level 2.0 offers advancements, Level 1.0 is not being forgotten. As it shifts towards new service models, users can expect consistent improvements and updates. Our commitment ensures that Level 1.0 remains a vital part of our evolving trading ecosystem. Stay tuned for more enhancements on the horizon.

Links

• App: level.finance
• Github: github.com/level-fi
• Documentation: docs.level.finance
• Twitter: twitter.com/level__finance
• Discord: discord.gg/levelfinance
• Telegram: t.me/LevelFinance

On Monday August 28th, The LEVEL team joined Arbitrum on their regular spaces chat to talk about LEVEL, and future plans.

Topics such as the background & history of LEVEL, challenges faced, and the vision of the recently announced LEVEL 2.0 upgrades were discussed at length. Below is a summary of the main LEVEL 2.0 key points, followed by the formatted transcript from the spaces chat.

Level 2.0: Key points

When Level Finance was launched in December 2022, the ecosystem was very different from the present. We gained significant market share on BNB Chain but realized the need for evolution upon moving to Arbitrum. The decision was made to upgrade the product to remain competitive, leading to the development of Level 2.0.

Level 2.0:

A fully decentralized exchange, utilizing an on-chain orderbook system, Level 2.0 will be a home for real traders, and will support multiple, various assets. Not only offering crypto pairs, but potentially Forex and Stocks on a synthetic basis.

The new design will also allow more user friendly and functional trading features, more akin to features available on traditional CEX’s.

Level 1.0 will pivot towards a “staking as a service” or “market making as a service” model. Users with assets like ETH or USDT can earn yields in a risk-isolated manner. Level 1.0 will act as a market maker for Level 2.0, as it shifts towards the on-chain order book system.

Reason for Change:

Instead of launching a separate project or token, we believe the existing dual token system with LGO will serve as a foundation for future DeFi projects.

This system allows for digital assets to operate at full reserve, where all profits and fees from the protocol back a redeemable token. This structure can support the development of innovative and creative products.

Roadmap and Future Plans:

We recognized the limitations and inefficiencies of the AMM model.

With Level 2.0, the AMM becomes a participant rather than the platform itself, leading to a marketplace open to free market forces.

The platform’s value will be distributed among liquidity providers and token holders, creating an ecosystem where users are also the platform’s value owners. This setup allows others to build on the contracts and create their own front-end and rules.

Role in the Future of DeFi:

We believe we’re building a product for an audience that doesn’t exist yet.

For true mass adoption, similar to centralized exchanges, we need a synergy between users who prefer permission-less transactions without compromising user experience.

Level 2.0 aims to offer a seamless experience for users unfamiliar with blockchain, making it a blockchain-agnostic liquidity marketplace.

User Experience:

The goal is to provide an experience similar to non-blockchain platforms. We aim to abstract away many blockchain interactions, making them more user-friendly. we’re exploring solutions like trustless bridging and cross-chain settlement.

Full Arbitrum X Level Spaces transcript

Introduction

Host: I want to get this space started with some introductions. So maybe you want to introduce yourself and talk about what is Level Finance?

Level Finance: Sure, absolutely. Maybe less about myself and more about Level. Basically, the project started as a decentralized liquidity marketplace, where the sole purpose is to monetize liquidity in a permission less and in a noncustodial trust-less kind of way.

So that’s kind of what we’ve been tinkering with. And similar to what you guys have done with Ethereum scaling, we wanted to do liquidity scaling. And, you know, over the course of the last eight months, we’ve tried out various ways to make liquidity more approachable for users, unfortunately, in the current environment, where it’s largely dominated by bots, a lot of the aggregators have started using Level in terms of just finding the most efficient transaction and routing those orders through. And that’s kind of where we are right now.

Host: Yeah, I want to ask as well, because you mentioned, you guys want to scale the liquidity. So I’m wondering how do you guys plan on doing that?

Level Finance: Well, initially, we thought that one of the greatest limitations for traditional centralized exchanges is the depth of the order book. And the efficiencies in which these orders are matched based on the number of users that have so we thought that an AMM model served this purpose quite well. So that’s kind of what we started with.

To an extent, I think the thesis is partially correct. In the sense that we traded about $22 billion over the last six or seven months and generated about $30 million in fees off of base assets, have, you know, I think on average, less than $15-$16 million. So in that sense, I think it was fine.

But, you know, with the ultimate objective of creating the most humanly usable, liquidity marketplace, I think we’re, we’re still quite a bit of a ways off.

Team & Background

Host: I want to learn more about the team, who is the team behind Level? And what are some of the backgrounds that make up the team?

Level Finance: Yeah, so So we’re about 30 people all over the world, mostly PhDs. And then, you know, a couple folks like myself, who came from a more traditional finance background that kind of got into the industry a little bit earlier.

But the majority of the team are engineers. And we’re in four time zones.

Host: Nice, yeah. And so why did you guys start Level Finance, what are some things you saw in the DeFi space that you guys can solve with Level Finance?

Level Finance: To be completely honest, this wasn’t really like the inception of the project was not to solve something in DeFi, but to create something that is communally governed and communally owned, meaning we wanted to create a Democratic platform or liquidity platform, where the users are the ultimate owners of, essentially the future success or failure of the platform, which is why we kind of went with a completely fair start, as opposed to, you know, minting out all the tokens and then selling it to, you know, a select number of bag holders and try to do it that way. You know, every token that came out of Level is the by-product of using the platform. So there really isn’t any pre-mine or pre allocation of that sort.

I guess the flip side of that is that because it is a fair start project the initial stages of the project is going to have a inflationary emission schedule, you know, kind of similar to Bitcoin, where you know, the first 46 months of Bitcoin, you mine 10 million Bitcoins, and then the first halving comes and then it starts tapering down design is very similar in the sense that we want users to be the owners of the platform. And during the initial phases, the users are going to earn a little bit more reward. And as adoption kind of scales up, the reward kind of scales down. So roughly that’s the idea.

Host: It’s an interesting model. And I’m wondering, what are some achievements you’ve seen, by using that model?

Level Finance: I think the best way to highlight the achievements is by highlighting the challenges, you know, first two months in, we found out that one of our calculations, for LP tokens were off, and then we had an extra million dollars of fees sitting in the contract, that’s not being properly reflected in the individual token price. So we basically have to do a overhaul and find a way to allow the previous LPs to kind of get the additional million in fees that were collected, but not credited, or rather not reflected in their token price. And then from there it’s basically, you know, a series almost that weekly or bi weekly, of I suppose challenges that had to be overcome, and it’s just been a highly continuous process.

Tokenomics & Governance

Host: Yeah, that’s pretty wild And I want to talk about the governance structure, because I know you guys have two tokens. So LVL and LGO. Do you may want to share some info about the differences between those two?

Level Finance: Yeah, absolutely. So LVL is basically the utility token for the platform, we have not done a super good job in creating lots of utility for it. But for the most part, the LVL token is used to stake for a portion of the trading fees generated. And it’s also used to stake for the governance token, which is LGO. And LGO is pretty interesting, because currently, you even know, at its current state, I think it’s still one of the most valuable digital assets out there, around $75K to $80K, per LGO.

So LGO is basically a full reserve asset backed token system, where each LGO actually represents ownership of the DAO’s treasury. And, you know, at any point, owners of LGO can choose to exit governance by burning the LGO in exchange for their ownership of the DAO.

Host: And is this done on chain or off chain?

Level Finance: So, the assets within the DAO are staked on Level, so, we’re also our largest liquidity provider ourselves. So that’s constantly generating fees, the redemption process currently is done on chain, but there are certain settlements, for example, there are cross chain components that need to be signed. And that is not automated.

The interesting thing about Level is that the governance token earns fees from all the ecosystems where Level is deployed. So you’re not only getting fees from Arbitrum, but rather, when you stake LGO. You’re also getting fees for BNB. And also any other chains that we may launch into in the future.

Host: Oh, wow. Yeah, that’s really interesting. And how complex was the process to ensure that all fees from both networks goes to the stakers? Was that from a technical perspective? Was that something really challenging to implement?

Level Finance: Yes and no. So, prior to our omni-chain upgrade,

The fees were basically calculated on a real time basis. So all the fees were also distributed and claimable on a real time basis.

So once, so after we implemented the cross chain part, we had to kind of migrate to an epoch system, because we ultimately had to transfer and add things up at the end, which made it a little bit more clunky from an operations perspective.

But, you know, there’s only so much you can get away with when it comes to cross ecosystem redemptions.

Other features

Host: Right. And I noticed that you guys have other features for users. Aside from governance, you guys offer Asset Management for both arbitration and Binance. And you guys also have leverage trading, swapping? Could you guys maybe talk a bit more about those features that people can use on Level Finance?

Level Finance: Yeah, sure, absolutely. So it’s not so much asset management, as it is more of a market making as a service. Basically, users with single sided liquidity can choose to deposit and be a liquidity provider on the platform, where traders will effectively be trading against in a programmatic kind of way. So that’s, that’s kind of the first layer where, you know, folks who want to earn a little bit of yield on their ETH or on their USDT or whatever it is. We’ll do that by becoming liquidity providers. And then the rest is actually just staking the platform token itself, and also staking the governance token for a percentage of the trading fees.

And, you know, it’s a perp DEX. So we also offer perp trading.

Host: Right, and I see that you guys have different liquidity places, such as senior tranche Junior tranche that are low risk and high risk. Could you maybe describe more about it, talk about what are these different liquidity incentives? If I’m correct, is that what it’s called?

Level Finance: Yeah, so So basically, this is, I suppose a first or second attempt at creating a user elected, kind of risk exposure framework, where the liquidity providers can roughly pick the category of risks that they want to be exposed to, with a rough idea of what, the returns might be and what the exposure might be in terms of assets and price volatility. It’s not perfect. It’s still something that we’re working on. But I think this is definitely a good first step into, you know, a suitability related product, where those who want to take a little bit less exposure or less volatility can choose to do so. And those who want to go a little bit harder at growing their portfolio can choose to take a little bit of extra risk, assuming that their horizon is appropriate to their needs.

Arbitrum launch

Host: Yeah, sounds pretty cool. It’s an interesting model that you have there. And I want to ask about Arbitrum. Why were you guys inspired to launch on Arbitrum?

Level Finance: Well, the main reason is, because that’s where all the action is at, right? As far as DEXs go, Arbitrum is the place to be, you know, for many reasons, one, you guys have successfully kind of solved scaling, and made the cost of on chain transactions reasonable enough.

Whereas you know, you’re here to do it on Ethereum layer one, it’ll be orders of magnitude more expensive, way slower, and just less viable. So that’s the main reason why we’re there because we feel like you know, that’s where the competition is. And we really want to prove ourselves in a competition rich environment.

But the the second reason is, I feel like our, our goals and objectives are largely aligned in the sense that you guys are trying to create accessibility to Ethereum and by building more user friendly ecosystems and products, for communities to build on top of, and what we’re trying to do is to make liquidity or rather offering liquidity as a service and make liquidity more accessible to folks who may very well be coming into the ecosystem for the first time. So now in that sense, I feel like we are mission aligned in many ways.

Host: Yeah, I love the synergy right there. We’re definitely happy to have you guys here with us to to help you know, be a part of this mission of bringing user friendly protocols you know, to not only web3, also web2 so it’s great that you guys are here with us.

Level Finance: Absolutely, really appreciate your hard work and building this ecosystem and we’re happy to be here.

Host: I noticed that volume on Level Finance, especially on the Arbitrum network has been very high. Yeah, so I just wanted to ask, what are some things you’ve seen since coming over to Arbitrum?

Level Finance: I think as a whole, the user base on Arbitrum is incredibly sophisticated. And, you know, as I mentioned earlier, because there’s so many options for both spot and perp products to be offered in this ecosystem, I think a lot of these opportunities become very, very efficient, meaning you have a lot of automated trades that are arbing not just against centralized players, but also arbing against the entire ecosystem as a whole. Which is one of the main reasons why we decided that Arbitrum was where we wanted to go after BNB chain, because of the efficiency that the kind of collective masses brings to the ecosystem. And, you know, as I’m sure you’re well aware, any inefficiency will be very quickly arbed away. So it maintains a relatively high level of standard for, for all the players, you know, it’s either you’re competitive, or you’re bust. And we love that.

Level 2.0

Host: There’s definitely a lot of competition on Arbitrum. I wanted to ask about Level finance 2.0. Recently, you guys released a proposal on that. So I want to ask, what is Level 2.0? And what can the community expect from that?

Level Finance: So when the project launched, towards the end of last year, the ecosystem was drastically different than where we are today. And I think, you know, while while Level was very successful, at gaining market share on bnb chain, over the last six months, I think, really, it wasn’t until we came to Arbitrum, that we realized that the product needs to evolve, and the product needs a very substantial upgrade, in order for it to stay competitive. Which is why we decided and we’ve actually already started building this level 2 concept, where the current level is going to pivot towards a more of a staking as a service, or market making as a service model.

You know, it goes a little bit off of what I alluded to earlier, which is those with eth or USDT or, or any of the assets that’s being traded on the platform, who wish to get a yield in a risk, isolated kind of way can choose to do that. And then Level 1.0 will actually be a market maker to Level 2.0, which is actually going to pivot towards an on chain order book system.

So, we’re in the process of doing that.

Obviously the big question is, you know, this is a very drastic change. Why are we doing this as opposed to launching a separate project with a separate token or, you know, or any other reason why we’re making such a drastic change? And the reason behind that is because we genuinely believe that the existing dual token system with LGO will serve as a primitive for future DeFi projects, including Level 2.0 to be built on top of where you can have digital assets operating at full reserve, meaning all the profits and fees generated from the operations of the protocol can be used to back a token which is also redeemable for the underlying, where you can build some really, really interesting and creative products on top of. That is why we are kind of making this pivot and building this entire Order Book system on top of the existing Level 1.0.

Host: Nice. And yeah, what does the roadmap look like for, you know, after Level 2.0? Because you mentioned that you could build some really cool products on top of it. So I’m curious, what are some things that you can see Level Finance building on top of that?

Level Finance: So, you know, off the top of my head, I think through this process of building Level, we come to realize the limitations of the AMM model and some of the inefficiencies. So we aim to solve that with Level 2.0, where the AMM kind of becomes a participant of the platform as opposed to the platform itself. And then we just create a marketplace where the platform is open to free market forces as opposed to executing solely on programmatic liquidity.

And then from that, you know, the values that are captured for providing the service are kind of collected or distributed amongst the liquidity providers, as well as the token holders. So this creates an ecosystem, where the users of the ecosystem are also the ultimate value owners of the platform itself.

So when we when we kind of just set up the scaffolding this way, where the users are positioned to be the owners of the platform, we can then kind of open it up, where people can actually build on top of our contracts, using our liquidity pool, to create their own front end, to create their own rules. To conduct services, and the value, rather, the fees that they are able to charge for the services can then be distributed in a predetermined kind of way. And we think that’s super, super interesting.

Host: Yeah, for sure. And, you know, do you think this might play a bigger role, in terms of the future of Defi? Is this something Level Finance could play a role in?

Level Finance: Yeah, absolutely. I mean, in many ways, I feel like we’re building a product for an audience that doesn’t even exist yet. And the reason why I say that is because in order for the platform to gain true adoption, and when I say true adoption, I mean, you know, mass adoption, similar to the type of adoptions, that centralized exchanges have have gotten over the past couple years, we really do need kind of like a perfect storm or synergy between people who do not wish to take counterparty risks, and would prefer to conduct their transactions in a permission-less sort of way.

But what we realized is that this cannot come at the sacrifice of the user experience. So, you know, if you have to sign five transactions just to place an order or amend an order or cancel an order, this is not a very humanly usable system, not to mention the fees that will even if you’re batching, transactions, the fees that will kind of come alongside this will be fairly prohibitive.

So what we aim to do with Level 2.0 is to build the best human experience possible from the perspective of somebody who may not have interacted or may not have had extensive experience interacting with Arbitrum or the blockchain as a whole, which is why we want it to be a blockchain agnostic liquidity marketplace. And the experience in terms of the end user experience should be as similar and as seamless to a, let’s just call it a non blockchain experience as possible. And that’s what we are aiming to accomplish.

Host: Yeah, that’s a great goal. I 100% agree in terms of user adoption outside of web3, if you want the mainstream of adoption, you need to build a UI that is user friendly, right. I feel like that’s a really ambitious goal. I’m really excited to see that happen.

Level Finance: Thank you, I mean, it’s gonna be iterative. And it’s gonna be very challenging. But I think with the new framework for Level 2.0, we should be able to solve, or rather abstract away a lot of these interactions and batch them in a way that’s much more user friendly. And also, we’re also kind of tinkering with creative solutions that may be coming into the market in the next six months or a year or so, in the form of trustless, bridging and trustless cross chain settlement. So, you know, ideally, maybe, you know, 18 months from now, you will be able to trade on Level, you know, say you buy bitcoin on Arbitrum. And then you will have physical bitcoins settled into your bitcoin wallet at the point of redemption, if you choose to take Bitcoin on Bitcoin. So that’s one of the features that hopefully, we should be able to offer in the next eight to 12 months. But, but a lot of this is contingent on our partners who are building some of these kind of these trustless cross chain products.

Host: Yeah, that’s really cool. No, it’s crazy how fast innovation happens in the space. Because, you know, within, say, a month or two, you have completely new different products out there in the defi ecosystem. But no, 18 months from now. It’s gonna feel like a year, but it’s definitely gonna go by quick. So we’re excited to see you guys achieve that.

Level Finance: Thank you, it’s gonna be challenging.

Final thoughts

Host: Yeah, for sure. Can’t imagine. Yeah, Good thing is that we have good devs here. So we’re in good hands.

Level Finance: Yeah, but we’re looking for more. So to the extent that there are any devs out there, I would love to take that 30 to 60. Because we’re constantly building, and just the, the Security and Audit and Review process alone has taken hundreds of man hours.

Host: Yeah, you guys, uh, do you guys have a page, like a hiring page where people can apply?

Level Finance: I think we do. But let me double check on that. And circle back. I think most of the existing hiring has kind of been done on the reverse inquiry basis where somebody will reach out to us and we’ll talk to them. And it’s not the institutional because we’re on a bunch of timezones, right. So it’s not the kind of the institutional, you know, we have the HR reach out to you and then have a chat sort of thing.

Host: Cool, cool. Yeah. Do you guys have a discord? In case anybody has any questions about that? Or Level Finance?

Level Finance: Yeah, we do. It’s right on the website. drop us a note. Reach out to us. We’re always there.

Host: Cool. Yeah. Sounds good. But I know we’re short on time. So if I missed anything, feel free to mention it.

Level Finance: I think we roughly covered everything. I really do appreciate you guys for having us and really appreciate the good work you guys are doing. bringing the community together. I mean, Arbitrum that’s an awesome place. I can’t think of a better place to be.

Host: Thank you so much for coming on. We appreciate it. I’m sure the community learned a lot about what you guys are working on, and what you guys want to achieve in this space, and within the Arbitrum ecosystem, appreciate it.

Level Finance: Awesome. Thanks.

To find out more about LEVEL, visit our site at Level.Finance, follow our twitter, and join our Discord group

Revenue-based LVL burning & Omni-chain reward mechanism

Burn baby, burn

The recent DAO proposal asks for approval on a mechanism to regulate the DAO’s LVL balance. Here is how the mechanism would work in practice.

• For every dollar of revenue the Level DAO collects, we will burn an equivalent dollar worth amount of LVL from the treasury.
• The burn will happen every Wednesday, using 7-day TWAP of LVL.
• At terminal emission, LGO’s intrinsic value should equal its surrender value.

As an example of the weekly burn in practice, Consider the following scenario:

On a particular week, the total protocol fees amount to $1M. The DAO recieves 30% of these fees, which is equal to $300K. As a result of this $300K inflow to the asset reserve of the DAO, $300K worth of LVL would be burned from the treasury reserve. This would lead to the burning of 60,000 LVL, (assuming the 7 day TWAP of LVL is $5).

Earn Level Real yield wherever you prefer

We will soon start implementing the omni-chain reward mechanism. First starting with Referral Rewards, then to LVL and LGO staking features.

• Referral program: Users can select their preferred chain where they want to receive their LVL rewards. Our keeper network will be responsible for keeping track of all referral reward points in all chains and settle the rewards in the chain that users prefer.
• Yield and DAO Staking: We will use an epoch-based reward system, where users can stake their LVL and LGO on their preferred chain for the duration of 1-week (one epoch) to accumulate the reward points. These reward points can be exchanged to the yield (LLP) or LGO once the epoch ends. All staked LVL and LGO will be automatically rolled over to the next epoch. Users can stake more or unstake during the epoch.
• Omni-chain LGO surrendering: Besides enabling users to stake LGO on any ecosystem to earn yield, users will also be able to redeem LGO against Treasury assets on their chain of preference.

Keep a look out on our Twitter and Discord for announcements surrounding the new implementations.

To incentivize liquidity and trading activities in a multi-chain setup, we will split the current LVL incentives between BNB Chain and Arbitrum.

The LVL incentive allocation for BNB Chain will be adjusted as follows:

1. Liquidity Incentives

• LVL/BNB: 1000 LVL per day → 500 LVL per day
• Senior Tranche: 500 LVL per day → 250 LVL per day
• Mezzanine Tranche: 1000 LVL per day → 500 LVL per day
• Junior Tranche: 500 LVL per day → 500 LVL per day

2. Trading incentives:

• Referral rewards: Unchanged
• lyLVL rewards: 10,000 LVL per day → 5,000 LVL per day
• Total LVL daily rewards cap: 30,000 LVL per day → 15,000 LVL per day
• Once $100,000 of trading fees have been collected each day, a baseline reward of 5,000 LVL is allocated to the rewards for the day. Additional rewards are allocated at $50,000 trading fee hurdles as revenue is collected throughout the day. Each of the hurdles reached corresponds to an additional $10,000 worth of LVL rewards (reduced from $20,000).

These changes will be effective from 31st May, 2PM UTC

We’ve been getting a lot of questions lately about liquidity providers, the different types of liquidity pools and LLP tokens. We thought it would be super helpful to write an article explaining everything in more detail, so you can all have a better understanding of LLP tokens. We’re excited to share this information with you!

Level Finance utilizes liquidity pools to facilitate trading and reduce risk by building Tranches with varying risk profiles that reflect underlying exposure for LEVEL Liquidity Providers (LLPs), efficiently tackling and isolating long-tail risk. When providing liquidity (buying LLP tokens), LLPs earn a portion of the fee income generated by LEVEL, bonus LVL with high APR, and direct profit from trades.

A. Liquidity tranches

In the context of LEVEL, each tranche represents a pool of assets such as BTC, ETH, BNB, CAKE, and stablecoins. By offering different risk profiles, each tranche allows LLPs to choose how much risk they are willing to take. LEVEL offers 3 tranches for LLPs with different token risk factors:

• Senior Tranche (AAA) — lowest risk and lowest APR
• Mezzanine Tranche (AA) — medium risk and medium APR
• Junior Tranche (BB) — highest risk and highest APR

B. Practical examples

Scenario 1: All tranches have sufficient assets

Trader Bob opens a position of 100 ETH.

Bob’s position fees are distributed: 20% to Senior Pool, 35% to Mezzanine Pool, and 45% to Junior Pool.

To make sure there is liquidity available to settle his trade, LEVEL will need to reserve a total of 100 ETH in the pools as follows:

• Senior Pool: 100 x 20% = 20 ETH
• Mezzanine Pool: 100 x 35% = 35 ETH
• Junior Pool: 100 x 45% = 45 ETH

In some cases, there may be a shortfall in one of the tranches, and we’ll allocate the missing portion across the other tranches with sufficient assets. As a result, the reserve ratio may differ from the token risk factor.

In order to encourage LLPs to allocate liquidity to tranches according to their desired risk exposure, the fee income of each tranches will be divided relatively to their risk factors. The following example will shed light on this.

Scenario 2: One of the tranches has insufficient assets

Trader Jack opens a position of 1000 CAKE.

Jack’s position fees are distributed: 0% to Senior Pool, 30% to Mezzanine Pool, and 70% to Junior Pool.

In normal conditions, to make sure there is liquidity available to settle his trade, LEVEL will need to reserve a total of 1000 CAKE in the pools as follows:

• Mezzanine Pool: 1000 x 30% = 300 CAKE
• Junior Pool: 1000 x 70% = 700 CAKE

However at the time, Junior Pool had only 500 CAKE, and LEVEL allocates the mission portion from Mezzanine Pool, so we have a new reserve ratio that is different from the token risk factor:

• Mezzanine Pool: 500 CAKE (50%)
• Junior Pool: 500 CAKE (50%)

C. Influencing factors of LLP tokens

As with any token, the price and performance of LLP tokens can be affected by various factors:

1. Traders PnL: As mentioned in the examples above, PnL from traders on the platform will affect the LLP price.

2. Market value of underlying assets: The price fluctuation of underlying assets (BTC, ETH, BNB, CAKE) affects the price of LLP tokens in Tranches. If their price goes up, the LLP token price will be positively affected.

3. Fee revenue: Trading on the LEVEL DEX generates fees. A portion of these fees flows to liquidity providers (real yield) and are auto-compounded daily, thereby increasing the value of LLP tokens.

ABOUT LEVEL FINANCE

LEVEL is a decentralized and non-custodial perpetual exchange on BNB Chain with custom risk management and innovative LP solutions. Experience LEVEL’s advanced DeFi venue offers a great user experience, leverage trading, and real yield. Join LEVEL today and take control of your decentralized trading journey.

Website | Twitter | Discord | Docs | GitHub | Telegram | Medium | YouTube

The content has been edited slightly to improve grammar, informational quality and flow. The original Telegram AMA can be found here

Q&A SESSION SUMMARY

1. Who is the team behind LEVEL and what backgrounds do you have to make this project a success?

The LEVEL team currently consists of 25 people. Roughly half the core members are made up of seasoned developers in Solidity, Backend and Frontend, but we also have our own in-house designer, project manager, as well as a dedicated testing and audits team. The rest of the team is mostly crypto entrepreneurs that got into the industry pretty early (2011–2012) and stuck around through the last couple cycles.

I think we’re all really excited to develop a product that we would use ourselves, and with what’s been happening with centralized providers either being compromised externally, or losing their customers assets due to mis-management/outright theft — we felt pretty compelled to ship a product that not only rivals the user experience of some of these centralized systems but also offers users an opportunity to trade crypto without compromising their token’s security.

2. Can you tell us more about how LEVEL is developing? What utility do you bring to DeFi users?

LEVEL is the leading decentralized and non-custodial perpetual DEX on the BNB Chain. LEVEL is the leading decentralized and non-custodial perpetual DEX on the BNB Chain.

LEVEL provides spot and perpetual trading (up to 30x leverage), innovative risk management for liquidity providers, using original code designed from the ground up.

The LEVEL DEX also enables asset holders on the BNB Chain to become LPs and customize their risk/reward profile via Tranches . This underlying liquidity enables a marketplace for trading perpetual contracts and hedging risk on the LEVEL DEX.

• Fully permissionless, on-chain and non-custodial
• Real utility => Cash flow => Real yield
• - Zero price impact trades powered by Chainlink Oracles
• Innovative Liquidity and risk management solution for Level LPs

We’re a complete fair-launch project without premine or presales. Since Governance was established the LEVEL DAO has made all the major decisions up until this point. From the moment we started bootstrapping this project in 2022, we knew this was the natural direction the industry was going to head towards. We really believe in the future of non-custodial trading and LEVEL being a core part of it. Actually we believe in the project so much that we locked our team tokens for 4 years.

By the way, BTCVIX explained our liquidity pools as “mortgage-backed securities (MBS) style for different risk appetites (the secret sauce, Level is not a GMX fork!)”

Watch the video explaining how LEVEL liquidity pools, called Tranches, work: https://www.youtube.com/watch?v=ObDCEm1lmeQ

3. Can you share some key milestones?

To highlight our tremendous success in less than 3 months since launching on December 26th, 2022, I’ll share some stats:

- Currently, we generate around $100,000 per day in fees from trading activity on our DEX — yes, every day! According to DefiLlama, only PancakeSwap is ahead of us on BNB Chain. These fees are distributed to our community: token holders, liquidity providers, traders and referrers! There are no taxes or lockups.

• $4.3B total trading volume, $100M per day on average.

• Close to $5M in protocol fees generated since launching.
• Nearly $4M in the DAO Treasury consisting of only finest assets such as BTC, ETH, BNB and stables.
• $25M liquidity in LEVEL Tranches. We’re becoming the largest liquidity center for derivatives trading on the BNB Chain

• Also, LEVEL launched as self-financed by the development team. 2 weeks after launching, LEVEL secured the first strategic investor. Right now, we have 4 investors already. Here’s the latest investor announcement.
• TLDR: https://app.level.finance/analytics/overview

4. Are you audited? If so by whom?

We’re extremely attentive about security and have our second audit ongoing with Quantstamp who are definitely one of the best-in-class crypto auditor and luckily our security partner. The first audit was done by Obelisk.

We also have an Immunefi bug bounty program running. We have multi-sigs and timelocks in place for all critical parts of our decentralized infrastructure. Chainlink and Pyth Network provide oracles for asset pricing to ensure protection against price manipulations.

We’re making sure it’s all air-tight. LEVEL is 100% on-chain and permissionless. All smart contracts are public, transparent and most importantly verifiable.

More info: https://docs.level.finance/security-and-contracts

5. What marketing campaigns are you currently running and what do you have lined up?

LEVEL is all about rewarding those who contribute to the platform, whether you’re a trader, liquidity provider, or just a loyal community member. We’ve got some juicy incentives to get you excited:

First up, our Loyalty Program dishes out 16,000 LVL per day to LEVEL DEX traders. The more you trade, the more LVL you’ll earn. And that’s not all. The fully on-chain Referral Program is another great way to earn some serious rewards. Just share your unique referral link with your friends and followers, and you’ll both be rewarded when they join LEVEL.

We’ve also got the Crew3 campaign up and running, offering LVL rewards for completing simple tasks. Plus, we’ve partnered with some big names in the industry to bring you featured articles, Twitter threads, upcoming trading competitions, new CEX listings, and very meaningful partnerships with AAA projects (including our recent collab with Pancakeswap). Actually, there’s never been a better time to get involved with LEVEL.

6. Since you are margin dex currently on BSC have you also considered cross-chain deployment?

Level is designed to be a multi-chain liquidity aggregator.We chose the launch on BNB first because we believe in the resilience of the BNB community, and we saw a real opportunity for us to become a systemic player within the ecosystem. Other perpetual dex’s, including some of our largest competitors, have tried and failed in the past (Gambit/GMX forks, OpenOcean, MCDEX, to name a few). We saw this as an opportunity to differentiate by building something durable on BNB and once established, begin deploying across other ecosystems. Likely within the next quarter, once we’re done with building “LEVEL 1.5” as well as the security upgrades for the 2nd audit with Quantstamp.

You can read more about roadmap topics in our Outlook 2023 article and the recent DAO proposal.

COMMUNITY QUESTION

1. The LEVEL protocol is positioning itself as a preeminent marketplace for decentralized liquidity. How do you see the protocol’s value proposition evolving over time as it competes with other decentralized liquidity providers, and what do you think are the most important factors for success in this market?

Sustainability. It’s over with the baseless farming protocols, which generate zero value for stakeholders. That started and ended during the last bullrun. Also: Security. Innovation. Integrity.

2. How much risk is associated with each of the Level Trading Pools?

LEVEL trading pools consist of only high-quality assets: BTC, ETH, BNB, and stables, so the risk profile is very attractive given the current APRs.

Source: https://app.level.finance/liquidity

3. There are a lot of incentives for the volume of transactions. LEVEL has enough equity capital, but what are some of the ways to ensure our long-term survival?

We give out LVL to incentivize trading activity on LEVEL, which is very similar to the way that (all) other DeFi protocols give out incentives for people providing liquidity or contributing to the system. What strategies users do to gain these incentives are up to their choices. If you check our analytics and statistics, you will see that the daily trading revenues are always more than the value of LVL rewards given our. So, since rewards < fees, the tokenomics are well in place and most importantly sustainable.

4. Do you have an ambassador program? How do I apply for this program?

We look forward to launching this during Q2. Join our Discord to keep up to date: discord.gg/levelfinance

5. Why is leverage only 30x? Can it be increased?Are you planning to add more tokens to trade? Where is the $LGO from the $LGO auctions coming from, if $LGO emission is fixed and received by $LVL stakers?

It could be increased. It seems like most trades are at or below 10x leverage.

Regarding more trading pairs. Fees/revenue growth can grow only marginally from adding more pairs. BTC and ETH are the dominant and most-liquid assets and that’s what attracts the big traders and drives trading volume. The same applies for many other DEXes and CEXes generally. But yes, we are planning for integration of more crypto assets, which is a small part of our growth strategy.

6. Right now the highest risk pool is 184% APR and the lowest risk pool is 94% APR, so people can choose based on their risk tolerance, right?

Most of it comes from protocol fees and not from inflationary token incentives. Here’s a breakdown.

Thank you to everyone who attended the Level x Wallstreetbets AMA! We can’t wait to share exciting updates over the coming weeks.

ABOUT LEVEL FINANCE

LEVEL is a decentralized and non-custodial perpetual exchange on BNB Chain with custom risk management and innovative LP solutions. Experience LEVEL’s advanced DeFi venue offers a great user experience, leverage trading, and real yield. Join LEVEL today and take control of your decentralized trading journey.

Website | Twitter | Discord | Docs | GitHub | Telegram | Medium | YouTube

A humble servant of the Lord Satoshi has leveled up his DeFi game, and joined the party. Shrouded by darkness, disguised as a mere peasant, we touched him for 10 of the best.

After much lurking and observing on the sidelines, 10 BTC made its way from the One True Chain onto C̶Z̶’̶s̶ ̶c̶o̶m̶p̶u̶t̶e̶r BNB.

Please show him your warmest welcome. We want him to shill us on Twitter as he has done repeatedly for our c̶a̶p̶r̶i̶c̶i̶o̶u̶s̶ ̶h̶a̶r̶p̶i̶e̶s‎ esteemed colleagues.

Investment Terms

The following investment terms have been agreed upon:

▶ The investor has agreed to acquire 47,000 LVL at the 24hr TWAP of $4.7 per token.

▶ The investor has financed the purchase by paying 10 BTC.

▶ Purchased tokens have a 6 month lockup and 6 month linear vesting period thereafter.

▶ For full transparency: 0xEEe58C37658070F9aF55A14d9F479Db5742f9f95

▶ All sold LVL tokens will come from the DAO Treasury.

All BTC from the sale will be deposited to the Treasury and managed by the LEVEL DAO.

Use of Proceeds

Doing the good work of Lord Satoshi. Stay tuned for 1.5 updates.

Join LEVEL

As part of the LEVEL DAO Treasury, an itemized allocation of tokens has been set aside under Strategic Partnership. All proceeds are added directly to the DAO Treasury. If you would like to contribute to the LEVEL project, please contact us via social media (see links below) and together we can pioneer the future of decentralized liquidity centers.

LEVEL is a decentralized and non-custodial perpetual DEX on BNB Chain with custom risk management and innovative LP solutions. Experience LEVEL’s advanced DeFi venue that offers a great user experience, leverage trading, and real yield. Join LEVEL today and take control of your decentralized trading journey.

🏡 Website: Level.Finance
🐦 Twitter: twitter.com/Level__Finance
🎮 Discord: discord.gg/LevelFinance
📖 Docs: docs.level.finance
👷 GitHub: https://github.com/level-fi
📟 Telegram: t.me/LevelFinance
📚 Medium: medium.com/@level-finance
📺YouTube: youtube.com/@levelfinance

We are excited to announce the third investment in LEVEL DAO just a day after securing our second investment, further propelling our position as a leading decentralized trading platform. This latest investment is a strong indication of LEVEL’s growing demand and market fit, following a month of impressive all-time-highs in daily fees, TVL, and open interest.

Generally, in start up investment scenarios, the development team directly receives investment capital. With LEVEL, all investment capital is accumulated in the DAO Treasury fund. This approach generates value for the participants of LEVEL directly.

We are particularly excited about this investment, as it underscores our continous commitment to building the most advanced and user-friendly decentralized trading platform, accessible across various DeFi ecosystems. With this investment, we are confident in our continued momentum and anticipate accelerating our growth in the months to come.

Investment Terms

The following investment terms have been agreed upon:

▶ The investor has agreed to acquire 121,212 LVL at the TWAP of $3.30 per token.

▶ The investor has financed the $400,000 purchase by paying $400,000 in BUSD tokens.

▶ Purchased tokens have a 6 month lockup and 6 month linear vesting period thereafter. To ensure transparency, the address of the investor will be published.

▶ All sold LVL tokens will come from the DAO Treasury Reserve.

All BUSD from the sale will be deposited to the Treasury and managed by the LEVEL DAO.

Use of Proceeds

As the dev team has bootstrapped the project since the summer of 2022, LEVEL launched without any form of external funding. Fortunately, given our users’ enthusiasm for the product and its unprecedented growth, the revenue from LEVEL sustains current development. As we continue to develop and scale the platform, the capital will be directly injected into the DAO treasury, where it can be utilized and deployed into the areas agreed upon by the community, via DAO proposals.

Our latest investor is a genuine supporter of decentralized derivatives protocols and with very deep expertise in decentralized systems. The investor is a pioneer in MEV-related research, and operated an Ethereum mining pool that accounted for 5% of the entire network computing power during Ethereum’s proof-of-work days. In addition to the investment in LVL, the investor will also provide liquidity in the LLP pool, supporting the project growth going forward.

Join LEVEL

As part of the LEVEL DAO Treasury, an itemized allocation of tokens has been set aside under Strategic Partnership. All proceeds are added directly to the DAO Treasury. If you would like to contribute to the LEVEL project, please contact us via social media (see links below) and together we can pioneer the future of decentralized liquidity centers.

LEVEL is the Omnichain Perpetual DEX, enabling fully permissionless, on-chain and non-custodial trading with up to 50x leverage.

At LEVEL, we provide cutting-edge risk management solutions for liquidity providers, allowing you to choose your preferred level of risk and asset exposure. All income generated from trading fees is distributed in the form of real yield to LEVEL stakeholders.

https://linktr.ee/levelfinance

We are excited to announce the second strategic investment in LEVEL just a month after securing the first investor in January 2023. This marks a significant milestone for LEVEL, as it continues to lead development in becoming the most intuitive and advanced decentralized trading platform, accessible to users across DeFi ecosystems.

In addition to our new strategic partner, this month introduced new all-time-highs across the board, including daily fees, TVL, and open interest. We anticipate that our momentum will only continue to accelerate in the months to come, and see this investment as a strong validation of demand for the product, product-market-fit, and user experience.

Investment Terms

The following investment terms have been agreed upon:

▶ The investor has agreed to acquire 200,000 LVL at the TWAP of $2.50 per token.

▶ The investor will finance the $500,000 purchase by paying 1,630 BNB tokens.

▶ Purchased tokens have a 6 month lockup and 6 month linear vesting period thereafter. To ensure transparency, the address of the investor will be published.

▶ All sold LVL tokens will come from the DAO Treasury Reserve.

All BNB from the sale will be deposited to the Treasury and managed by the LEVEL DAO.

Use of Proceeds

As the dev team has bootstrapped the project since the summer of 2022, LEVEL launched without any form of external funding. Fortunately, given our users’ enthusiasm for the product and its unprecedented growth, the revenue from LEVEL sustains current development. As we seek to scale out the platform, we are pleased to apply these new capital injections toward aggressive user acquisition, community outreach, and further product expansion.

The traction so far has been extremely compelling to many investors in the ecosystem, including our new partner. A strong believer and avid participant in decentralized derivative markets, this strategic investor has a long history in the industry as a supporter of some of the earliest layer 1 blockchains, a liquidity provider to many DeFi platforms, and an advisor to many startups in the fintech space. In addition to the investment in LVL, they will also provide liquidity in the LLP pool and serve as a strong advocate of the project going forward.

Join LEVEL

As part of the LEVEL Treasury, an itemized allocation of tokens has been set aside under Strategic Partnership. All proceeds are added directly to the DAO Treasury. If you would like to contribute to the LEVEL project, please contact us via social media (see links below) and together we can pioneer the future of decentralized liquidity centers.

LEVEL is a decentralized and non-custodial perpetual exchange on BNB Chain with custom risk management and innovative LP solutions. Experience LEVEL’s advanced DeFi venue that offers a great user experience, leverage trading, and real yield. Join LEVEL today and take control of your decentralized trading journey.

🏡 Website: Level.Finance
🐦 Twitter: twitter.com/Level__Finance
🎮 Discord: discord.gg/LevelFinance
📖 Docs: docs.level.finance
👷 GitHub: https://github.com/level-fi
📟 Telegram: t.me/LevelFinance
📚 Medium: medium.com/@level-finance
📺YouTube: youtube.com/@levelfinance

LEVEL is the #1 perpetual DEX on BNB Chain for trading BTC, ETH, BNB and CAKE with up to 30x leverage. We surpassed $500M in total trading volume in just over a month since launching.

Dear community, we are excited to invite you to our quest initiative with Crew³— an engagement platform for web3 communities where you can submit your completed social tasks and get rewarded!

⚡ LEVEL Crew³ page: level.crew3.xyz ⚡

Through a series of tasks on Crew³, called quests, we want to reward and give back for your active engagement and contribution to LEVEL ❤️

⏰ The first Crew³ campaign will last until the end of February 2023.

💰 Total prize pool: $2,500 in $LVL tokens

🏆Rewards are distributed on the official Crew³ Leaderboard as follows:

How to get involved?

It takes you just a few moments to get started. You don’t have to create any Crew³ user accounts. Simply sign in with your existing accounts and you can start.

• Go to: level.crew3.xyz 👋
• Connect your accounts
• Complete as many quests as you can and collect XP. Follow the Leaderboard for rankings.

Each completed quest rewards you with some XPs, depending on the difficulty of the quest. There are a variety of quests going on at any one time, ranging from simple tasks, like following us on Twitter, or retweeting a Tweet, to more interactive challenges like writing a thread or article about LEVEL. Quests are split up into a few categories:

• Getting started / easy-quests
• Social media engagement
• Content-creation
• Inviting friends and followers, and more

Of course, there will be new quests added regularly to keep the fun going, so don’t miss out on the chance to earn rewards and have fun contributing to the community. 🎢

That’s all, happy XP hunting!

LEVEL is a decentralized and non-custodial perpetual DEX on BNB Chain with custom risk management and innovative LP solutions. Experience LEVEL’s advanced DeFi venue that offers a great user experience, leverage trading, and real yield. Start trading on LEVEL today and take control of your decentralized trading journey.

🏡 Website: Level.Finance
🐦 Twitter: twitter.com/Level__Finance
🎮 Discord: discord.gg/LevelFinance
📖 Docs: docs.level.finance
👷 GitHub: https://github.com/level-fi
📟 Telegram: t.me/LevelFinance
📚 Medium: medium.com/@level-finance
📺YouTube: youtube.com/@levelfinance