Today I want to bring you a project, which I really like and use all the time. I’m going to tell you why I’m so bullish on Timeswap and also give you some strategy examples how you can use it.

What exactly is Timeswap?

It’s essentially a money market that works without liquidations. To achieve that, options like mechanisms are in play. Don’t worry, it’s easy to understand and I explain it with an example.

It works completely without oracles, which makes it immune to a lot of attack vectors. And all pools are isolated and immutable, which means, if a pool is deployed, it can’t be changed.

The Timeswap code ran through several audits, Code4rena, PeckShield and Trust Security.

Here’s a quick thread on the functionalities 👇

Now to the example. There’s a USDC/OP pool and you want to borrow 1000 USDC against your OP.

That means you have to lock in 714.29 OP as collateral with a fixed interest of 0.03%. Yes, fixed means it won’t change after you deployed your funds. That’s basically what “fixed” means!

The interest is calculated through the amount of borrowed and lent assets. The more assets to borrow are in the pool, the lower the interest and vice versa.

But the borrowed assets have to be paid back before the maturity date, otherwise you lose your collateral.

What does liquidation-free mean?
In our example we have a transition price of $1.40. So at this price our deposited 714.29 OP have a value of exact 1000 USDC.

If the OP price falls to or below $1.40 we can decide if we want our OP back or if we keep the 1000 USDC. In simple words, our risk is capped at 1000 USD, but the upside isn’t. And this is the advantage to regular money markets, where you usually lose money if you get liquidated.

If you take the other side as a lender, you’ll have the downside risk, but you’re capped to the upside. (More to it later)

Disclaimer: I’m not getting paid from Timeswap, but I won the recent story telling competition and I farmed quite some $TIME points already.

Why am I so bullish?

Easy and quick answer, because it’s extremely useful! And you will see why in the strategies section later. There’re some plays you just couldn’t do without liquidation-free loans.

Currently, there’s almost no competition. Myso works with similar mechanics and is the only competitor to my knowledge.

Timeswap is basically the perfect protocol with lots of possibilities.

Options are super useful, but too financy. Timeswap created an options like protocol with its benefits and a much better user experience. And people just love borrowing! They love it even more without liquidations.

The other reason is how the team is handling things. They know how marketing works (one of the most important skills), how to build a community (they have a vibrating one) and they support early supporters. And of course, their meme game is on point!

They already deliver the most important chains, but more expanding is going on… more chains, more users! Injective is next.

Strategies

When I say I use Timeswap, I mean it. I constantly have 10-20 positions running, what I just couldn’t do if I were worried of getting liquidated.

First of all, there’re some very lucrative opportunities. Sometimes, you can lock in very appealing fixed rates and it’s not rare that you can lend assets for more than 40% up to over 100% APY fixed real yield. But you have to be quick! That’s the reason I usually check the market several times a day.

mETH looping

A new ETH/mETH pool on Mantle recently launched. With the double-dose staking yield for mETH and Eigenlayer points distributed from Mantle’s 100k restaked mETH, looping is the way to go. A lot of people did that already, so the rate isn’t optimal right now.

When the pool went live, I immediately looped several times for an average fixed rate of 1-2%. This lets me earn ~22% net staking yield + Eigenlayer points + $TIME rewards. And because of the collateralization rate of 103%, I almost get the same amount of ETH. For 1 ETH collateral you can borrow 0.97 ETH.

Cash flow

The protocol is a fantastic tool to generate cash flow in a bear or side market. In such markets the upside is limited anyway and getting in some money is essential.

In a bull, however, I’d rather choose the leverage and therefore, the borrowing side. Of course, there’re still opportunities in lending.

Limit downside

As explained in the example above, you can protect yourself from violent moves and crashes and limit your losses with still staying in the game.

Hedging usually costs a lot of money, but not with Timeswap!

Here’re some more examples:

Numbers

Up only since October last year.

And not only in TVL with currently $14.25m, but in all categories.

But it still flies under the radar of so many. The daily user number ranges from 20-85, lending txs from 34-204 and borrowing txs form 14-164 the last 30 days. But that means we’re still early and we can farm the precious $TIME points.

Ohhh husbandt...

You srept on Timeswap and we have no TIME 

Now we are homeress!

Don’t be like her husbandt!

Stay Sexy!

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