Integral Stakeholder Letter (May 2021)

Dear ITGR holders, LPs, and early Traders,

We heartily thank you for your continuous support in this rough past month. We would like to kick off a series of letters addressed to our staunchest supporters to keep you abreast of what we have executed and what our plans are for the near future. We believe that this is one of the best ways to bring out the collective power of our supporters.

For the past month, our focus has been on achieving a sufficient degree of product-market fit.

On May 18th, we upgraded our core algorithm and enabled full-scale trading on our ETH pools. We charged a fee and purposefully shunned giving out any trading incentives. We were happy to report that we have been seeing purely organic and recurring trading behaviors from our early traders. 85% of trades were done by returning users, including this whale who chose Integral over centralized exchanges.

Twitter avatar for @ProfessorJEYProfessor J.E.Y. @ProfessorJEY
Another 🐋 spotting: Moving 500.25 $ETH fresh from a @FTX_Official hot wallet, and swapping into 1.167m $USDT powered by @IntegralHQ
Integral.link has served $11m of big swaps and counting.

Professor J.E.Y. @ProfessorJEY

Neighborhood friendly🐳spotted taking multiple of their $ETH -> stables trades ($1m+ ea.) to @IntegralHQ pools. Rocky markets are creating splashes for big traders to try @IntegralHQ. An eventful day on the road ahead to product-market-fit for capital efficient DEX tech.

Since then, our total trading volume has grown rapidly, and surpassed $310mm in 20 days.

Critically, our ETH pools maintained mean-zero IL despite one of the most volatile periods in crypto history. This is a big validation of our core design.

However, nothing quite goes exactly according to plan. We halved LP rewards 6 times until we hit the $300M TVL mark which we felt was sufficient for traders. Just as we hit the mark, ETH crashed and we ended up with a sub $100M TVL just when trading demand starts to explode. We ended up with a very skewed pool ratio.

In order to fix that, we re-worked the rebalancing rewards. And with the collective efforts of our understanding and intelligent LPs, we fixed the pool ratios together! As this letter goes out, all of our ETH pools are quite very well balanced.

Egged on by this initial success, we then rushed to launch the stablecoin pools, thinking that the success will repeat itself. However, we made the mistake of choosing Uniswap V2 as our oracle. Our DAI-USDT and DAI-USDC pool TVLs are larger than Uniswap V2 itself, and therefore render their oracle inappropriate for usage.

When we switch to the V3 oracle later in June, the stablecoin pools will return to the mean-zero IL paradigm like with our ETH pools. But at this point, we must apologize to the early LPs of these stablecoins pools because they did suffer from 0.5% to 1% IL. Further IL has been completely stopped by our emergency fee hikes, but this is an imperfect solution until we can implement the V3 oracle later in June.

Overall, we believe that we have achieved a sufficient degree of product-market fit, and we have our first group of traders who love trading on us and keep returning to us.

The next step, knowing that our product can indeed organically convert and retain traders, we can more self-assuredly step on the gas peddle and create wider awareness of the Integral DEX.

To end on a very cheerful note, our protocol has quickly amassed a small fortune of $250k from trading fees. This fee belongs to all ITGR token holders proportionally and will be accessible once we enable DAO voting later this year.

Stay tuned for more good news from us,

Sincerely,

Integral Team


If you would like to help Integral grow faster, the most important and leveraged thing you can do is to refer us 1 good engineer that you know. We are hiring smart contract engineers and full-stack engineers, and we need your help to source the best possible candidates.