iZUMi LiquidBox

Yield Aggregator

iZUMi LiquidBox is a platform providing programmable Liquidity As A Service (LaaS) so that protocols can provide incentive rewards within certain price ranges.

Risk Rating
Average
Protocol Code Quality
Protocol Maturity
Protocol Design
Summary
What we like
iZUMi's LiquidBox enables protocols to distribute incentive rewards in certain price ranges for concentrated liquidity positions like Uniswap V3.
What we like less
Centralization risk as the team has not provided details if privileged roles have moved to a multisig setup.
What it means for you
Enables liquidity provides on Uniswap V3 to deposit their NFT LP token on iZUMi to start earning extra protocol incentives in addition to trading fees.
Information
Exploit/Hacks
None
Info
  • Website
  • Token: IZI
  • Tags: Yield Aggregator
Key Metrics
  • TVL: $237K (Rank #206)
  • TVL Ranking by Yield Aggregator: #0
  • Blockchain: Binance, Polygon, Ethereum, Arbitrum, Cronos, Aurora
  • Chain TVL
    • Binance: $115.74K
    • Polygon: $63.93K
    • Ethereum: $40.61K
    • Arbitrum: $16.72K
    • Cronos: $0
    • Others: $0
Risk Assessment
Average
Protocol Code Quality
  • Code reviewed by several experienced auditors including CertiK and BlockSec
  • Anonymous team reduces transparency
  • No documented protocol hacks since launch
Protocol Maturity
  • Core protocol launched in 2021; maturity over one year minimizes technical risk as smart contracts are well battle-tested
  • Bottom 80% by total value locked increases risk
  • Multisig wallet controls protocol upgrades
  • Multisig consists of less than 4 signers, which makes the protocol more susceptible to centralization risks
  • No timelock exists or no information documented, which mean a malicious actor could approve upgrades without any delay
  • Low voting power concentration reduces risk
Protocol Design
  • No death spiral concerns
  • This protocol is susceptible to risks related to yield optimizers which deploy custom strategies to automatically manage user funds
Things to know about iZUMi LiquidBox

How iZUMi LiquidBox works

iZUMi's LiquidBox was first designed as a liquidity mining scheme to address yield farming with Uniswap V3 LP positions. Unlike the traditional V2 LP tokens which are fungible, the V3 positions were represented by non-fungible tokens (NFTs). The LiquidBox enables users to stake their NFT LP tokens on iZUMi to start earning liquidity mining rewards in addition to trading fees. After users stake in LiquidBox, it will automatically determine whether the value range of the LP tokens is within the liquidity incentive value range set by the protocol owner. If it is within range, LiquidBox will issue a liquidity mining token reward for the LP. An algorithm converts each NFT into a fungible token in order to calculate the percentage of rewards that should be earned. The protocol incentives are provided by iZUMi itself as well as other DeFi protocols to incentivize user liquidity. Lastly, LiquidBox now also supports iZiSwap pools in addition to Uniswap V3.

What are the different liquidity incentive models?

The protocol currently has three options to farm with LiquidBox: Fixed Range, One-side, and Dynamic Range. With the Fixed Range option, LiquidBox distributes protocol incentives in certain price ranges. This is best suited for stablecoins and pegged assets that trade in a relatively narrow price range. The One-sided option is more suitable for emerging protocol tokens that minimize the impermanent loss on the upside. It accomplishes this by allocating half of the LPs funds (non-protocol tokens) directly below the current price and the protocol tokens into a staking address. This incentivizes buying when prices decline but there is no impermanent loss when prices go up as there is no liquidity provided above the current price. Instead, LPs will receive rewards from the staking pool. The last model, Dynamic Range, is more tailored towards established projects with high volatility in token prices. Here, users participate in liquidity mining by setting the liquidity in the value range of the current price. The width of the price range can also be set by the protocol to provide more concentrated liquidity. After the user provides liquidity to the pair at the set price range, iZUMi will automatically stake Uniswap V3 NFT LP tokens into the liquidity mining program to start earning rewards in addition to trading fees. Even if the user's position were to move out of range, their entire position would continue to earn protocol incentives.

How you make money on iZUMi LiquidiBox?

You can provide liquidity in iZUMi's LiquidBox within one of the liquidity incentive models (Fix Range, One Side, Dynamic Range) to start earning trading fees and protocol rewards.