Roela Finance: Solving The Uni Return Gap

Roela Finance builds upon the biggest derivatives opportunity embedded in Uniswap and solves the returns gap for liquidity providers. The team is made of passionate degens who have been building in the DeFi space for a considerable amount of time. <img alt="" src="https://miro.medium.com/v2/resize:fit:700/1*ZkStLGk5l6K_tCOTjuPX5Q.png" style="height:350px; width:700px" /> The biggest opportunities hide in plain sight. Uniswap has become a mainstay in the crypto ecosystem. In 2022, Total volume has surpassed $1 trillion and at its peak had ~10b in total value locked. A critical part of this success comes from the participation of liquidity providers (LPs), who stake assets on the protocol to generate volume-based swap fees and in turn take on impermanent loss (IL) risk. <img alt="" src="https://miro.medium.com/v2/resize:fit:700/0*xT0_NGiqMcYx3htP" style="height:320px; width:700px" /> The term “impermanent” in IL risk can be misleading as losses can be significant and very permanent. In fact, the potential loss profile is similar to shorting a string of vanilla options (both puts and calls). When liquidity providers enter into a position on Uniswap, they are effectively putting on a short volatility position, similar to selling options across the entire Uniswap curve. If the risk profile of providing liquidity in Uniswap is similar to the risk profile of shorting options, the question is whether the return profile is similar as well. More specifically, do the returns from the swap fees match up to returns from selling options? <a href="https://medium.com/@roela.finance/roela-finance-solving-the-uni-return-gap-963492452c58">Website</a>