Protocol Spotlight: Glitter Finance

Is Glitter Finance the passive income protocol we’ve all been waiting for?

Disclaimer: This isn’t financial advice! As we say in crypto, don’t trust – VERIFY! Do your own research and don’t ever invest more than you’re willing to lose. Like any DeFi project, Glitter Finance comes with risks. The project can fail, smart contracts can be hacked, bridges & underlying assets can be compromised, etc. 

Be safe out there and make sure you do enough research before you decide if Glitter Finance is right for you. 

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Welcome back to the club, gov!

Today’s newsletter introduces Glitter Finance, a recent recipient of a grant from the Algorand Foundation. Their public testnet is launching next week (tentative launch date 2/15), so keep reading to be one of the first in the know on this exciting protocol with immense passive income potential coming to the Algorand ecosystem.

What is Glitter Finance?

Glitter Finance is a cross-chain bridge with what their team is dubbing “advanced bridge functions”. The Glitter bridge (named ‘One Bridge’) works like any other bridge (i.e. Algomint) by allowing users to lock assets (i.e. ALGO) into a vault to create wrapped tokens to deploy within other ecosystems (i.e. Solana). However, with advanced bridge functions Glitter will unlock their vaults to allow users to redeploy a portion of their collateral into yield pools integrated directly on One Bridge. This will unlock otherwise dormant liquidity for users.

The integrated yield pools will be existing pools from the partner ecosystems that have been audited, assessed for risk, and whitelisted by Glitter. For example, when the Algo-Solana bridge launches users will be able to interact with Serum yield pools directly within the Glitter UI. By integrating yield pools directly on the bridge, users will be able to farm yields without needing to move their assets off the bridge. By building out this functionality on the One Bridge, Glitter effectively creates an investment vehicle and a more streamlined user experience. This is true especially for newer users who lack the confidence they need to experiment with DeFi.

In addition to these first few features, Glitter will incorporate two other key features: a FIAT Portal and AI / Algorithmic Trading. With these, the team hopes to deliver on their promise to make DeFi more accessible, simplified and less manual for the average user. Users will be able to deposit funds directly from their bank account, automate their trading with one click, and withdraw their profits back into their bank account. If they can deliver on this vision, Glitter will be a true game-changer not only for the Algorand ecosystem but for DeFi as a whole by creating a one-click algorithmic trading platform that can reap the benefits of multiple chains and their ecosystems.

The first bridge set to launch is Algorand-Solana. It launches on testnet on February 15th, then on mainnet once security audits are finished. Yield pools are tentatively set to launch in April while AI is set for a summer launch. Further down the line, the team will build bridges from both Algorand and Solana to Polygon and Terra.

Governance & the XGLI Token

Glitter Finance will be a hybrid between a traditional organization and a DAO in terms of how it will be governed. Holders of Glitter’s governance token (XGLI) will not be able to influence the technological or greater business aspects of Glitter; but will be able to:

• Vote on:

  • the next yield pools to be whitelisted 

  • the next tokens to be bridged 

  • treasury decisions

  • oracle updates

  • a new admin

• Unlock lower fees on the platform 

• Stake their tokens within yield pools on Glitter to gain additional rewards

What are the fees and how does Glitter make money?

There’s a 0.3% fee for cross-chain swaps and 10% of yield gained via the platform.

The fee structure is relatively straightforward on Glitter. While the cross chain fee is relatively standard, the latter does seem pricey on the surface. However, the price may be worth the saved time and effort if the technology delivers on its promise to automate yield farming successfully. We’ll be sure to test this once Glitter is live to provide a POV if the yields are worth the steep fee. 

The XGLI token will launch on February 15th alongside the testnet launch. 

Passive Income Potential

The passive income potential is what excites us the most for the first-ever automated yield farming tool within the Algorand ecosystem. By integrating the yield pools directly within One Bridge, Glitter users can take advantage of the best yield pools across several different ecosystems with minimum work. Users can deposit their ALGO, click one button to begin automated trading, and reap the benefits of the best DeFi ecosystems (i.e. Solana, Ethereum via Polygon, & Terra). How’s that for passive income, gov?

More advanced traders will be able to take advantage of this while also unlocking liquidity within multiple DeFi ecosystems to experiment with on their own. For example, users can allocate a portion of their collateral to the automated investment vehicle directly on Glitter while also using a portion of their collateral to manually invest in yield farms on and off of Glitter. By interacting with farms & protocols directly, more advanced users can try and garner better yields than Glitter’s AI.

While the second option isn’t as passive as the first, it does allow Algorand users to automate a portion of their yield farming if they wish to. This isn’t currently an option elsewhere across the ecosystem at this time.

In addition to the above, we’re curious to see how XGLI staking evolves alongside the platform. Details are scarce at this time, but this capability could unlock even more passive income streams. 

We hope this spotlight was helpful! If you want to learn more about Glitter, we recommend reviewing their official presentation or whitepaper. Note that Glitter originally started as a project on Solana, so the documentation alludes to that. After receiving a grant from the Foundation, it more or less became a joint venture between Solana, Algorand, and Glitter.

As always, thanks for dropping by the Club. Until next time, gov!