Lyra Finance: Launching on both Arbitrum and Optimism, a promising decentralized options exchange
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Lyra Finance: Launching on both Arbitrum and Optimism, a promising decentralized options exchange
Let's take a closer look at this sleeping giant—$LYRA.
Navigating Web3 tides with focused insightsWritten by: Kaduna
Translated by: TechFlow
There is a decentralized options trading platform operating on both Arbitrum and Optimism:
- Over $1 billion in trading volume;
- More than 160,000 trades;
- Only a $47 million market cap.
Let’s take a closer look at this sleeping giant—$LYRA.
What is Lyrafinance?
Lyra is a decentralized options trading platform that allows users to trade in the crypto options market with extremely low fees and near-instant execution speed.
Lyra consists of three core components:
• Lyra Protocol;
• Lyra Interface;
• Lyra Governance;
Lyra Protocol
Lyra Protocol is a set of smart contracts forming an AMM that enables traders to buy and sell options on crypto assets. Traders buy or sell options from the Market Maker Vault (MMV), which is funded by liquidity providers.
Fees generated by traders are paid to liquidity providers as rewards for supplying liquidity. This structural design helps Lyrafinance maintain a more decentralized state compared to many other trading platforms.
Lyra Interface
Lyra Interface is the web interface through which users interact when trading and accessing the Lyra protocol. Many would agree that Lyrafinance has one of the cleanest UIs in the field for trading options.
Lyra Governance
The Lyra protocol uses its native token $LYRA for governance. Simply holding $LYRA does not allow users to directly vote on decisions like many DAOs; instead, $LYRA holders can vote for representatives.
The "Lyra Council" consists of five representatives elected by $LYRA token holders. A new council is selected every four months, ensuring good protocol management and transparent changes.
Let's examine Lyrafinance's performance from a data perspective. Since launching on Arbitrum, TVL has been steadily rising, and launching simultaneously on $OP and Arbitrum was a major move by the team.
Both networks are currently hot—Coinbase announced development of their own chain powered by Optimism, while Arbitrum has become a popular new L2 due to its technology and fundamentals.
Since launching on Arbitrum, Lyrafinance has seen consistent growth across all key metrics such as volume and fees:
• Total trading volume: $36 million;
• Total fees: $47,000;
• Open interest: $7.7 million;
• TVL: $21.8 million;
Their statistics on Optimism are equally impressive. Since launching on $OP, they have achieved:
• Total trading volume: $485 million;
• Total fees: $1 million;
• Open interest: $3.6 million;
• TVL: $12 million;
Clearly, Lyrafinance is here to stay and will be among the top players in crypto options trading, if not the largest. Currently, Lyrafinance ranks as the second-largest options platform by TVL and has proven to be the fastest-growing.
Staking
Lyra offers users a 5.69% APY for staking their $LYRA tokens. Staking $LYRA increases your trading rewards. Note that staking is different from providing liquidity, which we discussed earlier.
Providing Liquidity
As mentioned previously, users can provide liquidity to the AMM, enabling others to trade options. This is done via "Vaults." LPs currently earn between 11% and 21% APY.
$LYRA Token:
- Price: $0.16
- Market Cap: $47 million
- TVL: $37 million
- FDV: $161 million
- Circulating Supply: 290 million
- Max Supply: 1 billion
When considering potential investments, it's best to review the tokenomics and ensure any tokens held by the team or venture investors have a secure vesting schedule.
Lyrafinance performs well in this regard.
With 20% of LYRA tokens allocated to the team, this ensures long-term incentives while allowing the community to hold the majority of the supply/project. Team tokens are released linearly over two years.
Seed investor LYRA tokens are also released linearly over two years, with final unlocks on January 1, 2024. Tokens for other funding rounds are locked until September 2023 and then vest linearly over three years, with final unlocks on September 1, 2026.
In summary, Lyrafinance’s tokenomics do not create excessive selling pressure. Combined with the impressive statistics discussed earlier, it is clear that LYRA is poised to become a major player in the options trading space.
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