What are the two innovative DeFi projects, Whitehole&Pacman, that are about to IDO on Arbitrum? (Party1)

On April 25th, Arbitrum has started distributing initial ARB allocations to DAOs in its ecosystem. Not long ago, Dune data showed that the total number of official cross-chain bridge transactions on Arbitrum One has exceeded 1 million, reaching 1,002,597 transactions. The current total amount of ETH stored on the Arbitrum One bridge has reached 2,428,922, worth over $4.4 billion at the current exchange rate of $1830. The number of independent deposit users on the bridge is also as high as 635,810.

Not only that, various projects in the Arbitrum ecosystem have been landing one after another, whether it's the WINR Protocol, a liquidity and incentive protocol that has seen an increase in trading volume since its launch; or Camelot, a decentralized exchange that saw a 15x increase in its opening price; as well as the Perpy GMX copy trading system and the on-chain fund management platform Factor DAO. Each IDO of these projects means more opportunities for users to create wealth.

We can see that the Arbitrum ecosystem is thriving.

This time, the veDAO Research Institute brings you an analysis of two upcoming DeFi projects in the Arbitrum ecosystem that have not yet undergone IDO. As one of the hottest sectors in 2023, every project's IDO on Arbitrum is worth our attention.

Whitehole Finance: A multi-asset lending protocol in the Arbitrum ecosystem

Official website:

https://whitehole.finance/

Twitter:

https://twitter.com/WhiteholeFi

More information:

https://app.vedao.com/projects/29c436a3f9825b33cde8960654c372d8a6710349c1d4bef2a7765670676c6ba8

Project Introduction:

Users can easily deposit, borrow, and use NFTs and crypto assets on the platform. It is understood that Whitehole Finance aims to create a fair ecosystem for platform users and allow users to receive fair returns by using the platform's features.

The platform's token is GRV (Gravity Token). Whitehole Finance will start its IDO on its own platform from 11:00 UTC on April 25th (19:00 Beijing time) and will last for 3 days, ending at 11:30 UTC on April 28th (19:30 Beijing time). The initial IDO price is 0.03U.

On the Whitehole Finance platform, there are 5 types of participants:

• Depositors: Owners of crypto assets can deposit their assets into Whitehole Finance and set their own lending and liquidation terms. Depositors can earn interest through their deposits, including governance reward interest paid in GRV and deposit collateral interest paid in cryptocurrencies.

• Borrowers: Borrowers can participate by providing various virtual assets to Whitehole Finance. Borrowers provide crypto assets as collateral and can borrow other crypto assets that suit their needs through the platform. As a cost of borrowing, borrowers need to pay borrowing interest, but at the same time, this action will also earn them official GRV token rewards. Currently, the Whitehole Finance platform supports deposits and lending of six crypto assets: ETH, WBTC, DAI, USDT, USDC, and ARB. The total amount of deposits is $1,124,591, with the highest deposit yield (WBTC) being 110%; and $470,450 has been lent out.

• NFT holders: NFT holders can mortgage their NFTs to the Whitehole Finance platform and borrow KLAY (presumably the Klaytn token, a Korean-based metaverse development platform). Users can re-deposit the borrowed KLAY into Whitehole Finance for farming. While earning farming income, they can also receive GRV token rewards to offset interest. Currently, Whitehole Finance only supports the mortgage of two NFTs, Smol Brain and LilPudgys, with a total TVL of 0.988ETH in the NFT market, which is negligible compared to token lending. This indicates that NFT lending will not be mainstream on Whitehole Finance in the near future.

• NFT auction bidders: When the collateral value of an NFT borrower decreases and triggers liquidation, the user's NFT will be liquidated through auction. Other users can purchase the NFT at a discounted price.

• GRV stakers: By locking GRV, users can exercise voting rights and earn staking interest.

How it works?

Deposits and interest settlement: In Whitehole Finance, all interest earned during the addition of cryptocurrencies to the lending pool appears in the form of gTokens. When GRV is first launched, the exchange rate between gToken and Token is 1:1, and then the interest income will accumulate and immediately reflect in the token's value.

For example: When GRV is first launched, User A deposits 10 ETH, so at this time, the relationship between their principal and interest is: ETH: gETH = 1:1, and User A receives 10 gETH.

After GRV has been live for some time, User B deposits 10 ETH, and the relationship becomes ETH: gETH = 1:1.5, so User B receives 15 gETH.

When a depositor withdraws their deposit, Whitehole Finance will immediately convert the user's gETH to ETH and pay it out, and then the gETH will be destroyed promptly, and the user will receive ETH, the amount of which will increase with the increase in interest.

How liquidation works: Whitehole Finance is over-collateralized, and users can choose different lending paths for assets such as ETH and BTC, each with a different LTV (loan-to-value) ratio.

For example:

• Borrower A deposits $1000 worth of ETH as collateral.

• The liquidation threshold for ETH is 75%, with an LTV of 70%. (In this case, the borrower can borrow a maximum of 700 USDT.)

• Borrower A currently has a total loan amount of 700 USDT.

• When the value of Borrower A's ETH collateral decreases from 1000 USDT to 900 USDT, the LTV increases from 70% (borrowed 700 USDT/collateral 1000 USDT) to 77.8% (borrowed 700 USDT/collateral 900 USDT).

• Now the LTV ratio is higher than the 75% liquidation threshold of ETH at 77.8%, and the protocol will liquidate the borrower's collateral. The protocol (liquidating up to 50% of the borrowed assets) will use the collateral to repay the borrower's 700 USDT debt and charge a 10% liquidation fee of 35 USDT.

• In other words, the borrower will ultimately repay 350 USDT + 35 USDT in collateral. Afterward, the user's LTV is 67%, the collateral value is 515 USDT, and the loan balance is 350 USDT.

Tokenomics:

Whitehole Finance has two tokens:

GRV: The platform's governance token, responsible for interest redemption.

Maximum supply of 1,000,000,000 tokens.

Contract address: 0x10031e7CFf689de64f1A5a8ECF4fBBc7Aa068927.

Allocation:

• Community incentives: 40% of community incentive rewards over the next 10 years

• Presale ($GRVIDO): 10%

• Ecosystem (marketing): 10% (reserved for marketing rewards, pre-minted in a multi-signature)

• Team: 20% linearly vested over 3 years for core contributors

• Reserve: 10% (pre-minted in a multi-signature)

• Protocol-owned liquidity: 10% (pre-minted in a multi-signature, 5% for initial liquidity)

veGRV: Staking mode for GRV tokens

Users need to stake GRV to obtain veGRV, which can be used for ecosystem governance but cannot be traded or transferred. It is worth noting that the exchange between GRV and veGRV is not a rigid 1:1, but is based on the user's GRV lock size and staking time to provide a weighted boost. According to the Whitehole Finance whitepaper, the veGRV weighting will increase from 0.96% to 100% proportionally.

For example: User A stakes 1 GRV for 4 weeks and will receive 0.0384 veGRV; User B stakes 1 GRV for 2 years and will receive 1 GRV. After the staking period ends, the user's veGRV will disappear, and the GRV will be unlocked, and the user can claim it themselves.

Ecosystem Scoring System:

In the Whitehole Finance treasury interface, we can see an "EcoScore" interface on the right side of the user status bar.

EcoScore is divided into 5 areas (red, orange, yellow, light green, and green). The higher the area, the exponentially higher the profit. Conversely, low areas lead to low profits. The red area represents the initial collateral value not priced in GRV by the user. Whitehole Finance's long-term goal is to continuously increase the value of GRV in the ecosystem and maintain a high APR to attract funds. Therefore, the platform itself encourages users to stake the initial collateral GRV. Through this behavior, users can not only earn regular profits but also benefit from the profit feedback brought by the increase in veGRV quantity.

Overall, Whitehole Finance is not very popular in the industry, and there is almost no breakdown and analysis of the project on the entire internet. According to veDAO data, the current number of Twitter followers for Whitehole Finance is 61,209, but the number of followers for top KOLs is low, with 1 for asset whales and 8 for NFT whales.

Not only that, Whitehole Finance itself has a relatively low TVL for both cryptocurrency lending and NFT lending compared to other DeFi products. However, as an innovative DeFi ecosystem rooted in Arbitrum and audited by contracts, Whitehole Finance still has a certain potential for wealth creation.

The above is the first part of the analysis of the innovative DeFi projects about to IDO on Arbitrum brought to you by the veDAO Research Institute. In the next part, the veDAO Research Institute will conduct a study on Pacman Finance. In fact, the reason for choosing these two projects for research is that they do have some innovation in DeFi gameplay, and on the other hand, these two projects also have special features in their IDO methods. Whitehole Finance chooses to conduct its own IDO on its platform, while Pacman Finance is more like a project that integrates the gameplay of the social experiment project XEN and proposes the concept of "initial token staking issuance" in VeIDO on the basis of IDO. For more details, please continue to follow veDAO.

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