Overview
Last updated
Last updated
Ref Finance is an open-source software.
Inspired by Uniswap v2, Curve Finance, and iZiSwap, Ref Finance is an automated liquidity protocol powered by two constant product functions, and a discretized concentrated liquidity function:
Swap function: x * y = k
StableSwap function: χDn−1 * ∑ xi + ∏ xi = χDn + ( D / n )n
StableSwap function for yield-bearing tokens (Rated pools)
iZiSwap function for Discretized Concentrated Liquidity Pools (Ref v2)
For more information, please refer to:
Swap function
Uniswap v2 Whitepaper: https://uniswap.org/whitepaper.pdf
StableSwap function
Curve StableSwap Whitepaper: https://curve.fi/files/stableswap-paper.pdf
StableSwap function for yield-bearing tokens (Rated pools)
Discretized Concentrated Liquidity
iZiSwap Discretized Concentrated Liquidity Whitepaper: https://izumi.finance/paper/dswap.pdf
Ref Finance is implemented on the NEAR blockchain. The platform is fully permissionless and removes the need for trusted intermediaries, prioritising decentralisation and censorship resistance. Anyone can trade and/or become a liquidity provider (LP) for a pool by depositing an equivalent value of each underlying token in return for pool tokens (LP tokens). These tokens track pro-rata LP shares of the total reserves, and can be redeemed for the underlying assets at any time.
Unlike Uniswap, Ref Finance smart contract (v2.ref-finance.near), which manages the automated market maker functions; swap and provide liquidity, contains all pairs or liquidity pools, made of reserves of two or three NEP-141 tokens (ERC-20 equivalent on NEAR).
When a LP creates a new pool, the pool fee is customisable. Every pool has the same fee structure, as shown below.
The Ref Finance ecosystem is primarily comprised of five types of users: traders, liquidity providers, stakers, lenders & borrowers, voters and developers.
Traders can swap NEP-141 tokens
Liquidity providers are incentivised to provide these tokens to liquidity pools
Stakers are receiving pro-rata shares of the shared protocol revenue
Lenders & Borrowers can unlock the liquidity of Near Ecosystem
Voters can participate in the governance of the project and the allocation of liquidity incentives
Developers can integrate directly with Ref Finance smart contracts to empower users in their interactions with tokens, trading interfaces, trading strategies, and more
There are different types of traders interacting with the protocol:
Speculators can use a wide range of strategies from fundamental to technical analysis, to 'ape' approach (process of buying a token shortly after the token project launch without conducting thorough research)
Hig-frequency bots can cover different strategies, such as market-neutral arbitrage or long/short strategies
Dapp users buy tokens for use in other applications on NEAR, for example, buying PixelDapp tokens to play games
Smart contracts that execute trades by implementing swap functionality, from products like DEX aggregators to custom scripts
Legal entities (can be for-profit or not-for-profit organisations) and/or DAOs (can be a smart contract) that execute trades to manage their affairs, such as the settlement of an invoice in a differrent currency/token
Traders are all subject to the same fee for trading on the platform
Liquidity providers, or LPs, are a fragmented group, mainly made of:
Passive LPs are token holders who passively invest to accumulate trading fees, they generally do not actively monitore their positions and divergence loss
Sophisticated LPs are focused on market making as their primary strategy, they usually develop custom tools and monitore actively their positions and divergence loss
Token projects sometimes choose to become LPs to 'initiate' liquidity, by creating a liquid pool for their token
Protocol-oriented or 'politicised' LPs are focused primarily on the REF<>NEAR pool and the vetoken model, allowing them to participate in the governance of the protocol (also see Voters)
Stakers can have different objectives and belong to specific subgroups:
Long-term stakers are usually interested in a more predictable source of revenue, deriving from the protocol revenue, while holding the protocol token and participating in the governance (Under Development)
Short-term or intra-strategy stakers are staking for a limited period of time, with the objective to optimise their returns, generally until the underlying token (REF) needs to be sold or used for a different purpose (i.e., liquidity provision)
Voting-only stakers can be identified as users that stake only to vote the associated proposal(s), they are generally interested in participating/influencing the future of the protocol by voting on specific proposals
Lenders & Borrowers are the key components in every DeFi Ecosystem, which can exist in all the following groups:
Retail Investors: They have access to the current layer of liquidity and play a crucial role in accelerating DeFi activities within the ecosystem.
Venture Capitalists: This group includes entities such as Maker Maker or any institution that can access the NEAR Ecosystem liquidity. They employ various DeFi strategies such as hedging, asset optimization, and flash loans to maximize their returns.
Please note that the information provided is based on general knowledge about DeFi ecosystems and may not reflect the latest developments or specific details about individual projects.
$REF holders can participate in the governance of the projects by voting on key governance proposals and by voting on the allocation of REF tokens to specific farms for additional farming rewards.
Voters can be:
Community members, organisations, or investors that are interested in participating in the development and strategic orientation of the project
Project owners who want to support/grow their community by voting on the allocation of additional rewards for their corresponding farm
Short-term farmers who want to maximise their farming APR by voting on the allocation of additional rewards for their corresponding farm
Once the veTokenomics function is released, this feature will become accessible.
There are many ways Ref Finance can be used by developers, some examples include:
UX/UI experiments and front-ends built to give users access to the backend functionalities
Data and analytics (e.g. https://stats.ref.finance/)
Liquidity aggregation
Yield aggregation
DeFi dashboard projects (e.g. https://app.odyssey.fi/, https://app.depocket.com/dashboard)
Trading bots
Finally, the Ref Finance team along with the DAO (ref-finance.sputnik-dao.near) and the broader community drives development of the protocol and its ecosystem.
