Before we get started, this is not a recommendation or endorsement to buy any token(s) mentioned.
This week, we cover a newly launched omnipool protocol built on top of Aura and Balancer called Opal.
Similar to Conic Finance built for Curve, Opal provides liquidity pools where users can deposit a single asset and the omnipool then allocates liquidity to a set of whitelisted Balancer pools.
This protocol is designed to offer set-and-forget, gas efficient, diversified and less time-consuming access to farming opportunities.
Opal is a protocol built on Ethereum Mainnet but likely to expand to L2s with DEX protocols such as Maverick in the future.
Currently, Opal is aiming to enhance the DEX liquidity flywheel for the Balancer ecosystem. With Aura Finance, liquidity providers (LPs) enjoy boosted Balancer LP yields thanks to protocol-owned veBAL which allows Aura to earn maximum yields.
Aura’s design is very similar to what many LPs have enjoyed in Convex Finance.
However, there are 2 major drawbacks for users of Aura Finance. One is the need to continually monitor and seek out the highest boosted yields for LPs, and two is the need to create an LP by pairing multiple tokens vs depositing a single asset.
Until now! Having just launched on March 9th, Opal makes it possible for users to deposit single assets such as ETH, while Opal governance auto-allocates the liquidity towards various underlying DEX pools, to farm multiple rewards denominated in AURA, BAL, trading fees, and Opal’s new native governance token GEM.
The distribution of liquidity is determined by allocation weights representing the share of an Omnipool’s total liquidity that should be supplied to each underlying pool. Omnipool LPs thus gain exposure to multiple underlying Balancer pools via a single Omnipool LP token. Today, Opal offers only 4 Omnipools supporting deposits for these LST and LRT assets:
- wstETH
- rETH
- wETH
- weETH
Opal’s native governance token is GEM with a fixed supply of 50M tokens. You can learn more about the supply tokenomics in the Opal docs here.
To incentivize regular deposits and withdrawals, GEM emissions will be distributed to LPs who deposit into Omnipools while the pools are imbalanced, following a dynamic emission rate based on a bonding curve encouraging time sensitive deposits.
This will eventually stop when the pool is balanced again. This boost in rewards will be distributed linearly over the next epoch. Removing liquidity from the pools results in forfeiting the boosted yield.
To bootstrap Opal users and GEM holders and reward them based on their commitment and pro rata share of the protocol TVL, a GEM emissions boost mechanism it set to apply up to 2.5x APR multiplier. To learn more about the benefits of locking GEM, check out the Opal docs here.
vlGEM boost rewards claims are subject to a 4-epoch cooldown in two forms :
Classic Claim: A 4-epoch cooldown is automatically triggered when vlGEM boost rewards are emitted and eligible users receive all GEM at the end of the period.
Early Claim: Users can claim all their GEM rewards before the end of the cooldown by forfeiting a % of the rewards equivalent to the % of cooldown time remaining.
Today, I’ll show I can begin earning the comparably higher yields (up to 33% APR) with Opal passive omnipool strategies.
DeFi Dad is one of the earliest power users of DeFi, having worked with early Ethereum startups going back to 2018, including Zapper.
