# GammaSwap AMA Overview
This is an overview of the conversation in written form. The methodology used was to transcribe the recording with HappyScribe, then pass the transcription through OpenAI's GPT-3 API in batches of 10 segments (a segment is defined as something a speaker said), then passed the summaries into ChatGPT asking for a bullet list summary of the discussion. Enjoy.

## High Level Overview
* OlympusDAO (represented by dr00 and Indigo) and GammaSwap (represented by Devin) had a conversation about GammaSwap, a new platform that allows users to borrow liquidity from AMMs to short the liquidity and get compensated for the risk they are assuming.
* GammaSwap treats LP tokens like an option, compensating option sellers with premiums paid by those buying the option, rather than trading fees, to help projects and retail LPs come out ahead.
* Other players in the space with the same thesis of LP tokens selling volatility were discussed, such as Primitive, Panoptic, Infinity Pools, and Aave.
* The issue of impermanent loss and how GammaSwap can help mitigate it, as well as the issue of concentrated liquidity and how GammaSwap can help democratize the market, were also discussed.
* The team behind GammaSwap is composed of six members and is currently finishing up two audits for their core smart contracts and adapter for Balancer, aiming for a beta test by the end of the week of February 24th and a mainnet launch in early March.
* Devin and Indigo discussed the potential of working together, with dr00 asking a question about how liquidity thickens if you're unwinding it.
* Parameters are in place to make sure leverage in their platform is never too high, and the team is waiting for audits before they move to the next stage.

## GPT-3 Segment Summaries
GammaSwap is a new product that allows users to borrow liquidity from AMMs such as Uniswap and Balancer, allowing them to short the liquidity and get compensated for the risk they are assuming. This is a new way of looking at LP tokens, treating them like an option rather than traditional market making. It compensates option sellers with premiums paid by those buying the option, rather than trading fees. This new product is expected to help projects and retail LPs come out ahead,

Devin and dr00 had a conversation about GammaSwap, a platform that allows users to borrow liquidity with a more exponential curve. They discussed the other players in the space that have the same thesis of LP tokens selling volatility, such as Primitive, Panoptic, Infinity Pools, and Aave. They also discussed the complexity of the product and their decision to simplify the UI. Lastly, they discussed the economic analysis of the OHM ETH Pool and the potential use of GammaSwap

In the conversation, the speakers discussed GammaSwap, a project that allows users to hedge their pools and make efficient market making on-chain. They mentioned that Tokens are often used to attract liquidity, but can be used more responsibly in the future. They also discussed the issue of impermanent loss and how GammaSwap can help mitigate it. Lastly, they discussed the issue of concentrated liquidity and how it can crowd out retail and hurt them, and how GammaSwap can help democratize the market

GammaSwap is a new platform that seeks to create a way for retail traders to market make profitably. It is designed to borrow liquidity from any AMM, and is currently finishing up two audits for their core smart contracts and adapter for Balancer. The team is composed of six members, and is looking to scale up to eight. They are aiming for a beta test by the end of the week of February 24th and a mainnet launch in early March.

Devin and Indigo are discussing working together and the potential of the project. Devin mentions Trader Joe's Liquidity concentration and how they have been doing well with Arbitrum and have high APYs. dr00 then asks a question about how liquidity thickens if you're unwinding it, and Devin responds by saying that it depends on the context of the unwinding.

Indigo and Devin discussed the mechanism of having people bet on the other side of liquidity to help thin out volatility in AMMs. They also discussed parameters in place to make sure leverage in their platform is never too high, and that they are waiting for audits before they move to the next stage. dr00 thanked them for their discussion and encouraged the audience to follow GammaSwap on Twitter and join their discord.

## Full Transcript
Speaker 1
Token incentives. And now, yeah, like in 2021, we started to see those yields compress a lot and started doing the math on some of these yields and different AMMS and realized that most were negative EV. So he figured, yeah, if it's negative expected value and I short this, then I should come out ahead. And then after thinking about a little more, realized, oh, like, yeah, normal options markets. You have market makers that write the options and they're paid in volatility by those buying them. When you LP, you're basically selling volatility. So you're selling the type of option. So if you enable people to borrow that liquidity and basically buy that option like exposure, then the LP should be fairly compensated. Because right now, yeah, a lot of LPs, they're selling volatility, they're exposing themselves to impermanent loss. They're being compensated volume. And although there's some correlation there, it's not always a strong correlation. We looked at the major pairs in like Uniswap. It was, I think, on average like 50% correlated, but some days as low as 10%. So we're hoping not only does this provide, like, a way for people to hedge, buy insurance and attract speculators, but that it's going to compensate LPs better for the risk that they're assuming and that, yeah, retail LPs and projects providing liquidity in their own token can expect to come out ahead instead of potentially even losing money on some of these pairs.

Speaker 1
So that's essentially what Gamma swap is. I think there are a lot of other products we want to build, too. If this model works, that would power like, connect to our ecosystem. So I think long term we might end up looking something like Craft. But this service on top of other AMMS like unisw and balancer that allows you to borrow that liquidity is our first product that we're going to market with.

Speaker 2
Holy crap, man. Okay, well, I'm hoping that there are some people that understand what the heck you just said because man, that's totally awesome. I feel like there's definitely some learning that I'm going to have to do about that. I don't think I'm super financially literate when it comes to options trading and stuff. I haven't even really gotten wrapped my head around all that kind of stuff. And so you guys are playing at a different level with the whole AMM. So I think that sounds pretty cool.

Speaker 3
I can try to explain for people who don't understand. Yeah, all right, so if you guys understand an LP token, an LP token is like buying the token that's going down in value and selling the one that's going up in value. Right. Because you're providing liquidity to a trader or an Arbitrageur. Right. So the payoff is like this upside down parabola. So with Gamma Swap, if you can borrow that token, you have the ability to flip that payoff for the person borrowing. So you're shorting the liquidity. That's pretty much it. It's like a very simple idea, actually. But what's so interesting about GammaSwap is all the things that they're building on top of that, like trying to make a market and change the way that fees. Traditionally LPs are compensated with trading fees. But this is just how it's been. Only because it was a primitive from Uniswap many years ago, no one really knew how everything would work out. So LPs were getting fees, but they were actually losing a lot more money, as you guys know, from impermanent loss. Right. So the idea that Devon and his team came up with was to change this to where since the LPs are like, losing, what they're actually doing is like selling options, right?

Speaker 3
And you don't have to understand fully how selling options works, but the idea is that you treat the LP more as an option now and you compensate the option sellers the way you would with selling options, which is like, very different. You're not accruing fees by trading, like, based on volume. You're accruing a premium that's paid by the person buying the option. So it's looking at the LP token like an option rather than how we've traditionally looked at it as like, market making, compensation for market making. Is that good, Devin?

Speaker 1
Yeah, no, that's perfect. And I think it's just kind of in line, what we're trying to do. I think Uniswap was amazing because traditionally market making was something that was only available, like institutions. Like, if you look at traditional options, mostly institutions write them and then institutions will also buy them to basically like hedge as an insurance or like, you know, you have like the Wall Street bets gang that's looking to get like, leverage on the tokens that they're bullish or bearish on. But essentially it's very hard to write those options because if you're not like hedging as you write, you can kind of get wrecked within AMM as long as it mean reverts, you should always be good and that there's always going to be liquidity throughout the range. You're not going to get liquidated. There's no credit liquidity risk. We've seen basically, like flash crashes and trade by basically markets with phantom liquidity. I think during that huge flash crash, like Black Monday, I think one of the major stocks is trading at like, one penny, for example. But you wouldn't be able to buy any shares of that at one penny. So the price was incorrect.

Speaker 1
So I think DeFi solved a lot of that and then made things that have been available to basically like a few market makers available to everyone. It's just now we're kind of seeing that, yeah, some of these primitives that put in place have scalability issues. I think that's what we're trying to solve is keep the core premise of what made AMMS great and then just hopefully find a way to better scale them. And I think that'll be compensating. If LPs are selling volatility, they're exposing themselves to that risk, compensating them directly for the risk that they're assuming instead of another unit of measurement like volume, which can be correlated, but perfect correlation would just be a two sided market for that volatility. Cool.

Speaker 2
So Nach. I saw you had your hand up. Sir, do you have a question about this part of the talk?

Speaker 4
Yeah, hi, I'm new to DeFi, so this is all pretty, but I saw that there was a similar person that has a red hat on the face. So I was like, oh, that's great. Somebody who also likes to color red. Hi DeFi Devin, is that how you say your name? Devin?

Speaker 1
Yeah.

Speaker 4
Hey Devin. My name is nach two one one. I had a question about gamma swap and how it works. So if I'm, let's say, a giant market maker that has, I don't know, millions and millions of dollars of driving the aura pools for that, and I've also got like a Frax BP, but I also have this really interesting stack of liquidity on uni to buy out basically bids on the low and high side. What you're saying to me, it sounds like from what I'm listening again, I've never used DeFi before, but it sounds to me like Olympus would be in a particularly good position to kind of earn a stream of income if they would utilize gamma swap and its ability to try and market make in a more efficient way because it would essentially be a maker on one side, a taker on another side, but then also earning some of the difference based on our being its own other pools. Does that sound about right? Sounds like that would be pretty profitable for Olympus.

Speaker 1
Yeah, that's what we're hoping for. That more projects essentially will provide liquidity. So I guess traditionally make, but then also on the other side, buy some insurance on that position on the permanent loss. And since the borrowing is leveraged on the straddles the calls or puts that you could potentially hedge as little as like five to 15% of your yield. So we're going to be posting an article essentially on this. Basically it's a guide for projects for retail to be able to hedge themselves then. Yeah, eventually we'll have vaults that will do this automatically, but.

Speaker 4
It sounds like a managed vault for a look at us to kind of automatically hedge liquidity and automatically hand it like kind of manage IL is going to also probably allow them to be more efficient in deploying capital outside of just like farming and LPs and stuff. It could just be a more efficient use of capital for Olympus. I think that's really interesting for Ohmies. Yeah, sounds really interesting.

Speaker 1
That's great.

Speaker 2
Thank you so much for taking my Question doctor. Zero. I really appreciate you for letting me come up and speak.

Speaker 1
I'm really excited to hear.

Speaker 2
You are so sweet. Thank you. I have a question, Devon. Are there any other players in the space that are doing something similar to what Gamma Swap is trying to accomplish?

Speaker 3
Not as good as GammaSwap is doing it.

Speaker 1
There are others in the space that have, I would say the same. There are a lot of other players in the space have the same thesis that LP tokens are like selling volatility, but every implementation, I would say is different. So we spoke to Primitive today, they're an interesting one. They're essentially doing like a replicated market maker, but they're going to have different payouts, basically of like a covered call, a covered put, and basically you would provide liquidity and someone else could take the opposite side of the trade. Then they could even be bounded within basically like a range of strike prices. So that's one that's going to be coming out. So similar idea of different implementation. Then there are two others I've seen, like being built on V three, panoptic and Infinity Pools. This is more, I guess, for panoptic. Panoptic is like an actual options platform, but we're more like an ave that allows you to borrow liquidity but with a more exponential curve. And so with something like Panoptic, you might have more optionality in the strikes, but if no one buys your option, your LP position might not be better off.

Speaker 1
So that's something I think that a concession we made is that, yeah, you're not going to be able to have all these strikes basically set your own strike. But the cool thing about AMM is that whatever price the tokens are currently at is a strike price. And if you look at like normal options, that's where the majority of the bids are essentially anyways and near that strike price. So we thought that was like a concession we would make too to also simplify the UI. And then, yeah, infinity pools, they're doing it just on V three. And it seems like it's a little bit different implementation as well, where it's basically like you have all these different pools as an LP and you have your own specific pool. And so I think similar thing is Panoptic. You get more optionality with that. I think there's also the problem where maybe if your liquidity isn't being used, you would also have that issue because I think they're trying to combine liquidity to have more optionality on the strikes. And then I think, yeah, that implementation could be good. I think just generally the course that we have kind of followed is generally in defy.

Speaker 1
The more complexity there is, often the more vulnerabilities there could be. I think there's complex products that have been built without vulnerabilities, but for us it just made sense to try to have the simplest implementation. So in our implementation, all liquidity is just deposited in the underlying AMM and we're like a wrapper, like a wrap token, kind of like a wrapped pool for these different AMMS. So that's how we're doing it can be very similar to Ave but with a more exponential curve. All the LPs should be better off unless there's more underlying token incentives and underlying pool. And then, yeah, there are a lot of cool things we want to build ourselves like a novel type of AMM that would actually be a fee list X and the LPs would just be compensated off those buying volatility and counterintuitively. We would actually increase the Il so that the borrowers could get up to like 100 X leverage. And we think that that would attract more speculators. And so the LPs would actually potentially have higher yields than something like some of the Ames now. And as an LP you could basically opt into how much risk willing to accept instead of different fee tiers.

Speaker 1
So it'd be like high L, medium low, then that basically varies if you want something similar implementation, I think, for stables, actually, where especially because stables often mean revert, we would basically have kind of like a euro dollar. Feature market where you can get a few hundred X leverage if the price moved, like ten basis points, because often those pools would be inverted. So it's actually not nearly as receivable.

Speaker 2
So on the RFC that you guys posted, you had done a bit of an economic analysis on the OHM ETH Pool, and I think you had indicated that that would produce an annual loss of around $500,000 a year based on current TVL. The question that I have for you is like, if Olympus didn't have OHM ETH liquidity would the use of gamma swap still be like I know that you had just mentioned it would work for stables as well. But if our sole liquidity was OHM DAI, for example, or against other treasury stables and we didn't have OHM ETH, what would the picture look like?

Speaker 1
I guess I need to differentiate some of these products that I mentioned better. So we're going to start with our wrap service on Uniswap V2. Sushi, Balancer probably do an implementation on Uni V3 with some wider ranges. And then we're building our own AMM. And I think when we build the ground up, that's where we can actually introduce the most innovation. So the reason we'd be hesitant to do this with like stable pools or curve is that you would have to borrow so much liquidity out to get any decent kind of like leverage exposure. And we just don't think utilization of those pools can be super high to make a meaningful difference. So that's why we want to have like a new curve in our novel A, and them that would essentially incent not as much liquidity would have to borrow it out and it would still incentivize like speculators to basically speculate on the price movements or the price divergences of something like OHM DAI. I think it could be very interesting for something like OHM DAI because it's range bound, but there is a little bit of volatility there. So I think something like that would be better for our novel AMM.

Speaker 1
But then something that has like one volatile token and one stable or semi stable, like the wheat pool bouncer that's perfect for a wrap service. I think you can still get up to like 10-15X leverage in a pool like that, especially with balancer. And then that's something that would incentivize a significantly higher yield. And yeah, I think the Hedging is something that will be available now, but even without the Hedging, you can imagine the LP Olympus with the protocol and liquidity normally balancer They earn the swap fees minus the impermanent loss, but now it'd be swap fees minus the permanent loss, plus the borrow fees. Since those borrow fees are dynamic based on volatility like in the sense that periods of higher IL there should be more demand for that volatility, more borrowing then at least Olympus would be a little bit better compensated for the risk without hedging then yeah can hedge as well to mitigate the risk of IL fully if Olympus wants to.

Speaker 2
Indigo, you have any follow up questions?

Speaker 3
Not really. I've talked to Devon many, many times at this point, so I'm pretty well aware of the system. I could give context as to why I hit them up if you guys want to hear.

Speaker 2
Yeah, man, for sure. Really just also kind of like recount any of your conversations and just share with the community some points that you think would encourage us to sort of pursue a relationship with Gamma swap, right?

Speaker 3
Yeah. At Olympus we have a bunch of POL, so we are essentially market making. So one of the problems that we've had is like, it's always been kind of difficult for us to properly hedge ourselves. And like the LP pools, for example, a lot of large institutions who LP, they hedge their own pools. Right? And it's because LPs lose a lot of money to the Hedging, to the Arbitrage. Right? Sorry, I said that wrong. A lot of the institutions, when they LP, they ARB their pools, can they hedge it? I'm sure, but anyway, one of the great things about GammaSwap is it lets us hedge our pools by having like an exact payoff that matches the LP payoff, so we can get better closer to neutral payoff for ourselves. That's nice, but the big thing that I was wanting to do was when I read about GammaSwap in the beginning when they first announced, I was already thinking about how we could make ourselves more of a base pair throughout defy. And one of the big things was, one of the things I really want to get us away from is relying on things like convex or aura or ve systems to incentivize liquidity.

Speaker 3
That's all. Like Band AIDS. On top of the core problem of providing liquidity, that there's this huge issue of impermanent loss. So when I saw GammaSwap and the ideas behind GammaSwap have been theorized for a long time, but Gammaswap is the first project that I saw that actually built it out. So when I saw it, I was like really excited because it's like, okay, well, you can now have the tools to actually create a profitable liquidity position and actually do efficient market making on chain, which is like it's been very hard to do that. A lot of people hedge their pool like their LPs on centralized exchanges just because they have better options, liquidity and things like that. We now are starting to get more of the tools on chain so that it's just better for us as a fully on chain native project, especially one that has such a focus on liquidity, it makes a lot of sense that we would want to work with the projects that are giving us the tools to hedge for pools. Right? Yeah, that's it.

Speaker 1
Just to add a little bit there, I was really happy when Indigo reached out to me because I know he's super knowledgeable about default and aligned with our vision. I think Tokens are really great for bootstrapping networks, but when they're a necessity to attracting liquidity and just a way to compensate for risk, a lot of projects are forced to basically maybe not do an emission structure that makes the most sense for them. I think that's where it can get kind of bad. So I don't think Token incentives are still going to go away. I just think they can be used more responsibly, hopefully in the future, especially on long tail coins where, yeah, maybe you don't feel this much because the fees, you're sharing the fees with less people, the pools have less TBL, but that's actually where that correlation between volatility and volume is kind of the weakest. You know, they're super highly volatile, you know, low flow projects, and then not many people know about them yet, so there's not much that swapping. So I think particularly for that long tail, that's where we can help. The other thing I wanted to mention too, is that a lot of people mention Gamma swap as a solution for Il, which it is, but it's also a solution for the type of risk that Indigo was kind of referencing with LPs losing money to Arbitrageurs, and that's called LVR.

Speaker 1
So we talked to Tim Rough Garden, who proposed that paper. And one thing he what he thought was interesting about GammaSwap is that a lot of other protocols, what they try to do is they try to do model based to assume the LVR risk, like assume the volatility, so like dynamically adjusting fees. But the problem with that is that I'm sure a lot of people know the crypto market is always changing. So trying to predict with a model what that Volatility or Arbitrage risk is going to be like is kind of hard. So instead we're not trying to do a model based approach at all. We're just going to let the market decide what that rate should be. So hopefully an efficient market, which crypto isn't yet, but will become more efficient, especially as a protocol, hopefully attracts more liquidity. Is that during? Yeah. Those times of higher arbitrage, that LVR risk is actually returned as gains versus rebalancing to the borrowers, so that they'll be incentivized to borrow liquidity out and pay the LPs more for the LVR risk that they're assuming. So we'll have to see how it plays out. But that's another risk that gambling could potentially help solve for a little bit.

Speaker 3
Have you guys written about that, the LVR thing? You guys should make it through?

Speaker 1
No, Daniel is thinking about writing a medium, so yeah, the two next articles we want to write are about hedging strategies for protocols for retail. I guess those are the two participants we're most focused on right now. I think institutions can probably figure it out for themselves, but we're happy to talk with them. And then the other one yeah. Was about OBR, like what that risk actually is and how GammaSwap could potentially help mitigate some of those risks.

Speaker 3
Yeah, I would encourage anyone to just follow the Gammaswap Twitter account. You guys release a lot of really good information, so anyone who's curious.

Speaker 2
Yes, I definitely follow it. I like a lot of that stuff. So I have a question for I mean, this could be both of you, I think, could provide some answers to this. So I like to think about DeFi sometimes in a bit of a harder way.

Speaker 2
Right.

Speaker 2
So I want to think, like, who are the winners and who are the losers within the current, like, the way that things are and how does Gamma swap change the winner loser balance? Does it even things out? Thinking about it that way, do you have any insights on that?

Speaker 1
Who wins and loses in DeFi now? And how could GammaSwap will all have maybe change that? Is that what you're asking?

Speaker 2
Yes.

Speaker 1
Okay. I think for good and bad, we have lots of controversial opinions to GammaSwap. So one controversial opinion, I think, is that concentrated liquidity was a big mistake. I think one thing that we were talking about earlier is that impossibility is super important. That's a huge reason we like GMX and GLP. I think it was honestly a genius design choice. And if you looked at some of the competitors that Uniswap originally beat out on, like Bancorp and Air swap, one of the reasons that they were superior along, I guess, with other factors is how composable the LP tokens were. Well, I think constituent liquidity was well meaning. It was a way to scale D five. Better make it more capital efficient. But I think the core premise of D Five is being composable. So I think definitely that should be optimized for and then also we want to democratize market making to retail, right? And so I think that's why I don't really like clubs or anything approximating a club and why I think the future AMMS want to build are all going to be full range and not concentrate liquidity at all. So think about what concentrate Liquidity is.

Speaker 1
Essentially LPs have to be active and set their range and then often because of that and how complicated that actually is to predict, they don't do very well. At least the data shows there's all this flow as well that's not super good for them. And then as the volatility increases, there's less active liquidity because less LPs are in range. And so GammaSwap actually has the same function in the sense that in periods of higher volatility we withdraw liquidity. But instead of relying on the LPs to set the liquidity ranges and be active, LPs can be passive and then Hedgers and Speculators can do the work of withdrawing liquidity for them. So I think we're going to have these wrap services, a few other products as well. But yeah, I think Concentrate liquidity does some things well. Like it's very good for optimizing for slippage and capital efficiency, but I think it kind of crowds out retail and hurts retail. So we're hoping that we can continue to democratize build a system. It allows retail to continue to market, make and be positive abd and yeah, that's more passive for them.

Speaker 3
I just want to echo that. I wouldn't go so far that saying that UDV Three was a mistake, but I think like, the use case of Uni V3 is very different versus a full range liquidity and it's one of the reasons why we push to not go on Uni V3 for our own liquidity. Finding the constant, I don't know if you guys have ever seen, but the payoffs for the Uni V3 LPs is like most of the time, like negative. So most people lose money on their positions, at least in those naked positions. So the complexity of that versus having a full range token or full range of liquidity has so many benefits that I feel like Uni V3 is like CT's baby. And I personally like it too. I use it all the time. But there is definitely issues with it and I think it was sad that everyone moved towards the Uni V3 model. And I think like the full range or the simpler systems like the X*Y=K or the stable swap, those are actually very interesting systems. We're used to order books so we're like, okay, trying to move towards order books when that's not how it has to be.

Speaker 3
So yeah, GammaSwap is super cool because we can move towards better systems on top of the actual composable defy native system that we have.

Speaker 1
I think that was a little bit not the best way to frame that as a mistake. But I guess maybe more accurate term of my feelings is that I think it's good for some things. I think it's great. For high size trades to optimize the slippage like something like Uni V3 is going to perform much better than at least like full range of limitations now and then our future AMM as well, potentially. And that yeah for projects market making, you might be able to do that in a more capital efficient way. I just don't think it's a good product at least in its current form for retail and so I think a lot of people actually an issue we first came out thought we would be an institutional product. Well, I actually feel like we're mostly a retail facing product that some institutions and on chain funds may end up using. But we're really geared towards creating a way for retail to continue to market, make profitably, instead of, I think, sophisticated retail can, sophisticated traders can on the Uni V3, but it's hard to be passive, which was one of the really interesting things about the original AMM designs that have been around.

Speaker 2
What are your thoughts on how Gamma swap is going to make money within this paradigm? Are you guys just planning on making money within the AMM or are there other channels?

Speaker 1
Yeah, so there are a few other products you want to build if this works well. So we have some ideas that would touch stables, some of it's around JPEG insurance, some of it's around other things. I think we could build an interest rate market as well which would be really interesting vaults to hedge il and there's a new type of lending product as well that we've been thinking through that I think we haven't thought through the implementation fully and I think it'd be really interesting though. I think he's going to love it once we do release it. So there's a lot of other products we want to build and then yeah sharing that revenue hopefully with our holders as well. I think that's something that's been really interesting that has come out of this bear market is more common. But I think it makes a ton of sense to be more than just like the governance took in. I think if we work well we should be able to fund ourselves and continue to build new products. I think the thing that I think about the most is what's the right implementation for these different products we have in mind?

Speaker 1
Because I think the implementation and making it accessible to as many people as possible, especially with even our implementation, which I would say is simple form of this way to borrow liquidate for many amounts can get quite complicated. So that's something that we think about a lot.

Speaker 2
Cool. Well I can tell you right now this AMA was a bit super big brain stuff. Right. I feel like you sort of have to have a lot of financial system knowledge to sort of get it. And so I'm not seeing a whole lot of questions from the audience, but if anyone does have any questions, please go ahead and drop those in the chat. As we sort of reach the end of our discussion here, how about you touch on some of the more boring things, Devon? Like, what are you guys thinking about in terms of security? Obviously, that's super important these days. Do you want to touch on that?

Speaker 1
Yeah. So we're finishing up two audits right now. One is for our core smart contracts. So our core smart contracts are a modular. They have this service to borrow liquidity from any AMM and then for any AMM that's different than univ. Two, we have we have an adapter that we build. So we're getting that adapter that we're building for balancer audited as well. I think the final reports would be done by early next week, hopefully. And then yeah, for this governance vote, we'll wait to make sure that those audit reports are out and available before letting people vote on this because I think security is hugely important. And yeah, even though there's no necessarily economic risk for writing that quickly, because there are things we're mitigating for, but the LPs in our platform actually aren't the counterparties. It's just all liquidity in the AMM. I think the risks there are low. There's always that smart contract risk, especially with a novel product. We want to make sure that's all done fully and everyone has a chance to see that report.

Speaker 2
Cool. Do you have any well, one of the things that we wanted to talk about, but I don't think that we really touched on is, like, other people on the team, what size is, like, the gamma swap team? Anybody on the team that's been involved in other projects, anything to highlight there?

Speaker 1
Yeah, so the core teams, the co founders are three people. The core team is about six, and we're looking to scale up to eight. We're trying to hire another city engineer and another front end developer. So right now it's me. I handle operations and marketing and growth. Our CEO is working on the smart contract and a lot of the architecture of the platform and the quantitative strategies. And then the other early team member, one of the co founders, helping out with the front end and design. And then we have another engineer who's quantitative was working on an arbitrary project and had experience with a hedge fund before. He has a good flow of the experience and one experience. And then we have another front end engineer who was previously Doorswalk. And yeah, it was cool to intervene because I've actually remembered thinking that their UI was good. So that was something I think we learned from our alpha testnet. We're going to release our beta test soon was that the functionality there was quite complicated. So I think how it's going to look now when you borrow Liquidity, it can look like a perp platform where you would just choose to call, put, or straddle on a pair like Home Week, and then depending on basically that option, like exposure you want, we'll tell you which token to provide is viral, or both.

Speaker 1
You would provide that, select your LTV ratio, essentially how much leverage you want to get, and then you can just open your position that way. And I think, yes, we're already doing something novel, so we want that user interface to be familiar and intuitive to the people that are hedging or speculating on the volatility of those pairs.

Speaker 2
Nice. Cool. Well, I don't see any questions here unless there's any kind of final things that you wanted to mention. I guess one last question that I have is it sounds like a lot of this kind of stuff is still a bit in development. What sort of timeline should we expect if the community puts forth support to sort of move forward with this, what sort of timeline would we be looking at?

Speaker 1
Yeah, so our beta test should be we were aiming for the end of the week of the 24th is the end of that week. So yeah, by maybe the 24th or the week after having our beta test sent out, that should be up for a week or two and then May Net, definitely early March. So I think max four weeks probably till May Net, and then yeah, so we'll support Uni V2, Sushi, and balancer out of the gate, and then we'll definitely have a week there. So I think, yeah, the community votes on it. Once the audits are out, it can be as live as early as Tweets.

Speaker 2
Cool. Well, that's assuring. Indigo, do you have any final thoughts or questions or anything that you'd like to share?

Speaker 3
No, I'm just excited for us to start working together. It will be cool. There's a lot of potential here.

Speaker 2
Cool. Well, that sounds like a vote of confidence. I'm glad to hear that.

Speaker 1
Awesome. Yeah. I don't know if there are any questions. Happy to speak a little bit. Okay.

Speaker 2
I haven't seen any. I sort of ask people to drop some in there, and I don't see any. So just some people trading around. Some stuff about Trader Joe, I guess. Maybe something to look into. I don't exactly know what Trader Joe has been doing, but maybe you do.

Speaker 1
Yeah, they're doing some type of concert, Liquidity. I haven't been able to look into it that much, but I've heard a lot of smart people think it's really interesting and they've been doing very well on Arbitrum. They don't have as much TVL, but their pools have super high APYs. I think once we kind of heads down, just getting maintenance out there, I think once we do, we'll start looking at some maybe other AMMs to integrate as well, along with the other products we have in mind.

Speaker 2
Okay, I guess I had skipped over a question here. How does liquidity thicken if you're unwinding it?

Speaker 1
How does liquidity thicken if you're unwinding it?

Speaker 2
Yeah. Does that question even make sense to.

Speaker 1
You unwinding, I guess just because of.

Speaker 2
The fact that you're having people bet on the other side of it. Right, so would that thin liquidity?

Speaker 1
Yeah, it could thin liquidity. That's correct. At times of volatility. So it's a similar mechanism to concentrate liquidity in that sense, where liquidity is also thin during periods of volatility.

Speaker 2
So.

Speaker 1
That'S like the mechanism, how you kind of fight some of these IV issues that are happening in AMMs. We just have a different implementation there. I think, though, something that's interesting about doing it on a whole range is that there's always going to be, you know, since the curve is well, since that liquidity isn't in, like, different bands, there's always going to be, like, some liquidity there. You might not have as much variations if you were to build the site type of platform. So, yeah, that's something that could happen. More volatility in underlying tokens. We don't think it'll be that extreme. And we have basically parameters in place to make sure leverage in our platform is never too high, ie. Like, we disincentivize borrowing. After I think it's like 60%, we start making it more expensive to borrow. So there are some parameters in place there, but that happens in some of these new an innovations, and it's something we'll be doing as well.

Speaker 2
Cool. Well, I think that probably answers their question. All right, man. Well, thank you so much for coming out here and talking to everyone. And thank you, Indigo, for getting up here. Definitely on some of these more financial talks. I'm probably a little bit out of my depth on some knowledge there, so I appreciate you sort of breaking it down for everybody. That was awesome. I would encourage, just as Indigo said, to follow Gamma Swap on Twitter. I'll drop the link in here as well. Gamma Swap Labs. Correct. I'll drop that chat and then you guys should go follow them. Do you guys have a discord for people to come and ask questions to?

Speaker 1
A discord? Sorry. Yeah, I think it's just discord GammaSwap. Yes. There we go.

Speaker 2
There we go. Bee 926 shared it for you guys. Awesome. Cool, man. Well, again, thank you so much and looking forward to kind of going forward with Gamma Swap, and it will probably push it to OIP at some point. This is like the RFC stage. So looking forward to working with you guys and seeing some advancement over the next month or so.

Speaker 1
Awesome. Yeah, we were just waiting, I think, for Audits to do that. I just want to make sure everyone can see those before voting, but yeah, excited to move to the next stage. And thank you so much for having me here. It was great to talk with both of you and Indigo and be in front of your community as well and answer some of those questions.

Speaker 2
Cool.

Speaker 3
Thank you, guys.

Speaker 2
Thank you, guys.