Answers to your questions about AMMs, tokenized bitcoin, the Saddle app, and more.
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Saddle is an automated market maker (AMM) for pegged value crypto assets. Saddle enables anyone holding a pegged value crypto asset to trade in between other pegged assets with minimal slippage, ensuring users don’t lose value while trading.
Tokenized bitcoin is BTC that has been “sent” from the Bitcoin blockchain to the Ethereum blockchain. BTC is held in a deposit contract that then “mints” a token on Ethereum that has the same value as regular BTC but can be used to the full capability of an ERC-20 token. Some examples of tokenized bitcoin include tBTC, renBTC, WBTC, and sBTC.
Pegged value crypto assets are tokens that have their value pegged to an underlying asset by some means. For example, the value of a stablecoin or tokenized bitcoin is supposed to be $1 or 1 BTC, respectively.
However, pegged value crypto assets fix this value using different mechanisms. Some assets, like Synthetix sBTC or sUSD, maintain their peg synthetically (in this case, via collateralization of SNX). Other assets maintain their peg by being backed by and redeemable for the actual underlying asset, either permissionlessly (e.g. tBTC) or through a centralized custodian (e.g. WBTC, USDC).
These different approaches and the associated risks are why the prices of pegged value crypto assets of the same type can vary slightly.
Price impact is the difference between the current market price and estimated execution price due to order size.
Max slippage is the maximum percentage the execution price can change unfavorably by, if exceeded your transaction will revert.
Slippage occurs when other trades change the price during the window between when your transaction is submitted and actually executed.
The A parameter, or amplification coefficient, is a configurable setting that determines how flat the liquidity curve for each pool is. For example, consider A = 1 vs. A = 10:
Pools with more volatile assets will use lower A values.
Bitcoin is the largest cryptocurrency by market capitalization, and the amount of tokenized BTC on Ethereum has been exploding - the supply has increased ~135X in 2020. Despite this growth, tokenized BTC is often not a priority when it comes to features and support. We believe bitcoin deserves to be treated as a first-class citizen in DeFi.
Yes! We will support trading between and among other pegged value crypto assets like stablecoins and ETH-based tokens. We anticipate these pools to go live in Q1 or Q2 2021.
Saddle does not currently have a token.
The guarded launch has been successful and as of 6/22/2021 we have disabled the guard. Anyone can become a liquidity provider in Saddle's pools.
Saddle is launching with Proof of Governance to protect our users with certain limits and discourage sybil attacks. Initially, there will be a pool TVL cap of 150 BTC and a per-address deposit limit of 1 BTC. These limits will be raised every 1-2 weeks.
For LPs to qualify for PoG, an address must have demonstrated active network participation in one of the following ways:
On-chain voting or delegation (MKR, COMP, YFI, YAM, CRV, UNI, UMA, Moloch DAO)
Off-chain voting on Snapshot (all protocols)
Staking SNX and minting sUSD (>$20)
The cutoff date for all activity is October 1st, 2020, with the exception of UNI, which is January 1st, 2021.
A full list of eligible addresses is available here. PoG is temporary and will be phased out in the future.
We are implementing this guarded launch to establish a more controlled environment that will allow us to ensure a stable launch and remain responsible with users’ funds in a more controlled environment. Our objective above all else is to ensure the application performs to its expectations, users’ funds remain safe, and our community of supporters, developers, and users remain confident in our ability to successfully and fairly launch.
The guarded launch does not apply to the AMM. Users will be able to trade in between tokenized bitcoin types immediately at launch.
Saddle is going live with a guarded launch known as Proof of Governance (PoG). If you see an error message, it is because the wallet you are using has not been used in one of the governance processes listed in the question above. Try connecting another wallet, or wait for the guarded launch to end.
At launch, everyone will be able to use Saddle’s AMM to trade in between tokenized bitcoin pairs.
At launch, the only people who will be able to provide liquidity to the tokenized bitcoin pool are those who have participated in select governance processes, you can refer to the "What is Saddle’s guarded launch..." question for more details.
Head to the Saddle App and start using it now!
The Keep Network team has committed weekly reward incentives for liquidity providers. Learn more about the Keep network, KEEP, and your opportunities to stake KEEP for additional APY.
You can access Keep Network's staking dashboard to stake your LP tokens.
The SharedStake team has an ongoing reward program for those who are providing liquidity in Saddle.
You can access the SharedStake's staking dashboard to stake your vETH2 pool LP tokens.
The Alchemix team has an ongoing reward program for those who are providing liquidity in Saddle.
You can access Alchemix's staking dashboard to stake your alETH pool LP tokens.
tBTC is the first truly decentralized, secure tokenized bitcoin solution. tBTC is secured by the Keep network, a blockchain solution to privacy. The Keep network stores the keys of minted tBTC in decentralized “keeps”, thus eliminating centralized weak points.
There is no fee to withdraw your liquidity from Saddle pools. Initial versions of our contracts contained a withdrawal fee feature, but we have decided to remove this from all future pools.
Saddle is built by DeFi natives with prior years of developer experience at Web2 companies like Uber, Amazon, and Square. You might have interacted with our founder Sunil (aka devops199fan) in the YFI community (he’s a multisig signer), or used tools created by members of our team, like yieldfarming.info by John (aka Weeb_Mcgee).
Saddle has been audited by Certik, Quantstamp, and OpenZeppelin. Read the audits here.
Saddle's admin keys are controlled by a 3/5 Gnosis Safe multisig. The signers are Mariano Conti, Kain Warwick, DegenSpartan, Klim K, and Damir Bandalo. This multisig has capabilities to pause new deposits and trades in case of technical emergencies. Users will always be able to withdraw their funds regardless of new deposits being paused. The multisig can also change the swap/withdrawal fees and the per pool/account deposit limits.
There are several frontends available:
You can also use any of the following aggregators:
You can also run the frontend locally, check out the saddle-frontend repo for more details.