Hi all, Bodie & 0xDEADBEEF here from FABRIC with a Serum Grant Proposal. Before starting, we want to thank the Serum team for all of their hard work. The CLOB and open-sourced DEX GUI implemented by Serum have allowed FABRIC and many small-cap projects to thrive when otherwise impossible.
Given that we’re not yet as well established as some of the other grant proposal applicants, the below few paragraphs will serve as an introduction to FABRIC. we’ll keep this brief whilst trying to give the most accurate picture of what FABRIC is, our journey so far and the ideology that underpins our actions.
FABRIC is a synthetic asset issuance protocol built on Solana. Through the FABRIC dApp, users will be able to gain exposure to all of the most popular crypto’s, fiat currencies, stocks, commodities and inverse assets with infinite liquidity, zero slippage and no risk of front-running, all through the use of synthetic assets. In addition to our main offering, the wider FABRIC ecosystem consists of the FABRIC yield farms, FAB PUNK NFTs and our upcoming intelligent order aggregator.
After seeing the success of derivatives platforms on other L1’s, it was clear that there was a strong appetite for synthetic asset trading despite the multitude of pain points commonly experienced with the current protocols. Identifying issues such as high gas fees, losses due to front-running and extremely long confirmation times is what led us to develop FABRIC. After setting up the FAB DEX through the utilisation of the SERUM GUI, we airdropped 8% of our total supply (40,000,000 FAB) to COPE holders and we had officially begun. However, without any clear incentives to hold FAB or stake it in a Raydium permission-less pool, our liquidity quickly began to dry up.
To remedy this situation, we built out a yield farming protocol and launched the FAB-USDC LP staking pool. Our pool allowed FAB liquidity providers to stake their LP tokens and receive FAB rewards. Incentivising users to stake their FAB and USDC by rewarding them with a yield harvest opportunity proved to be a powerful way to bootstrap liquidity, causing our TVL to go from $3K to over $100k within three days of going live and is currently sat at over $4.9m.
We then went on to open up our LP pools to other small-cap protocols that weren’t able to get listed with Raydium, Orca etc and needed a way to incentivise liquidity. We’ve since helped them to build deep liquidity without charging USD fees. Instead, we asked for an allocation of their native tokens which we then redistributed to FAB Liquidity Providers via our FAB USDC LP pool as a way of saying thank you to the community for supporting us. Additionally, this allowed us to build Solana’s first triple yield pool. Despite not being our main offering, we’ve seen that our pools are a vital part of the Solana ecosystem as they help to support, nurture and grow the more overlooked small-cap protocols that would otherwise be left for dead.
By incentivising users to stake their LP tokens from Raydium, we are directly adding useful liquidity to the Serum markets.
With our background sufficiently covered, we propose a total of 250,000 of the 5,000,000 SRM tokens available given to FABRIC. With these additional tokens, we will be able to massively grow TVL on Serum through the increased onboarding of small-cap protocols that will not only bring new liquidity to the Serum Dex but also provide a lifeline to small-cap projects that aren’t currently being supported. Additionally, the grant will speed up the development of, and bring significant attention to the FABRIC core offering, our synthetic asset issuance protocol (synth dApp). This is noteworthy as FABRIC plans to facilitate the use of Serum as one of the primary forms of collateral that underpin the synth dApp. Given that the current collateral in Synthetix (the closest equivalent to FABRIC on Ethereum) exceeds $690m dollars, having this additional long-term utility for the Serum token is an extremely exciting value prop.
Putting Tokenomics aside for a second to focus on a more holistic view of the Solana ecosystem, as mentioned above the grant would also bring increased attention to the Synth dApp. The lions share of Defi users are currently on ETH; but with expensive gas fees, sub-par performance and composability issues as a result of L2 scaling solutions, Defi users are set to look for faster, cheaper and more frictionless alternatives to their Defi protocols of choice. FABRIC looks to take a significant portion of the Defi derivatives market share coming from ETH. Given our deep integration with Serum through the use of the DEX GUI and our staking protocol, we see FABRIC’s growth as enormously beneficial for the Serum ecosystem.
In addition to our main synthetic asset offering, we have two other upcoming features on our roadmap which would contribute useful TVL to the Serum ecosystem:
AMMs/liquidity pools - we are developing our own AMMs paired with LPs, including stable coin focused pools.
Intelligent order router - a swap aggregator with an intelligent order router breaking down large orders into multi-venue minimal slippage orders (with one venue being Serum markets) which would contribute to volume on Serum (not TVL).
Additionally, FABRIC has a strong relationship with the Solana NFT community. It’s not widely realised how little crossover there is between the Solana NFT community and the Solana Defi community. However, given the success of our recent generative art NFT launch, Fabric is in an extremely fortunate position as we’re able to tap into a pool of Defi unsullied Solana natives that can be guided through the FABRIC customer acquisition funnel and onboarded onto our Defi offerings. This represents an untapped market of users that Serum may not have access to through their current Defi offerings and presents a significant opportunity.
FABRIC is a fair launch project that has received no official funding, grants or external support and has had to work tirelessly to build, innovate and thrive within the ecosystem. The Serum grant, whilst not essential, would create the alignment necessary for FABRIC to continue creating long-term value for the Serum and Solana ecosystem.
We plan to implement:
Multi-yield pools to incentivise Raydium AMM LP staking
fSRM, synthetic SRM (utilising SRM in a SRM-fSRM LP pool, enabling direct swaps)
Support for SRM and MSRM as collateral on the FABRIC synth dApp
We would run a liquidity mining schedule for various small-cap and large-cap pairs. Pools hosted by Fabric for liquidity mining would emit the base token (i.e. FAB from a FAB-USDC LP pool) and SRM. We envisage hosting 4 to 6 pools with a total of 250,000 SRM, starting with the highest volume LPs. This will enable small projects to bootstrap useful TVL.