2021 saw Waterfall DeFi achieve several major milestones — the conceptualization of the risk tranching protocol; the conclusion of the seed round funding; being listed on both centralized and decentralized exchanges; launching our first product — BUSD Falls — in Q4 that reached more than $20M in TVL. Over the course of 2021, the team worked tirelessly to turn our concept into reality and into something tangible, introducing risk tranching to the community one step at a time.
In 2022, the Waterfall team will continue to build on this solid foundation, expanding the concept of risk tranching to include additional DeFi yield assets while showcasing our product to different communities.
Starting the year off strong, we at Waterfall DeFi would like to share some exciting news while outlining our 2022 roadmap below:
- Embark on a cross-chain journey With more and more innovative blockchain solutions cropping up seemingly every hour, yield farming and liquidity mining options are being developed on the daily. To fully capture the ever blooming DeFi ecosystem, Waterfall DeFi will go beyond BSC to venture cross-chain, starting with Avalanche (AVAX). Upcoming in Q1 2022, we plan to launch a MIM-focused tranching product that combines Wonderland and Trader Joe — for more information, follow our channels to keep up to date. Additional EVM-compatible chains such as Polygon and Fathom will be our next focus after the AVAX deployment.
- Launch v1 Protocol Staking for $WTF Users will be able to stake and lock $WTF to earn veWTF, the voting escrow version of the WTF token. Holders of veWTF will be able to earn additional $WTF as well as participate in future DAO matters. For detailed information, please refer to the detailed article here.
- Enhance existing product features Since our product launch in mid-November 2021, we’ve been taking suggestions from our community to improve and further polish our product. Below are a list of updates and additional features to look forward to, including:
- Auto Rolling Users will be able to “auto-roll” their deposits to the next tranche cycle at the flip of a switch, meaning the principal plus yield earned during the previous cycle will automatically be deposited into the same tranche for the next cycle. This simplifies the manual process of logging in to the dApp to roll deposits, greatly improving user experience and efficiency.
- Multi-currency Portfolio To expand the composability and diversity of Waterfall DeFi, our products going forward will be able to take in multiple currencies to generate a wider selection for users, starting with our current product, BUSD Falls. This would come in a product with a stable coin portfolio that takes in a combination of BUSD, USDT or USDC, for example.
- Time-based Deposit The tranching product is currently operating on a TVL-based trigger mechanism, meaning the product will only be locked and deployed when the TVL limit is triggered. To avoid products getting stuck in the deposit window due to insufficient TVL, we will be adding a time-based trigger mechanism to ensure the product automatically deploys once the timer is up. A number of time-based features will be launched on select products to provide users with the option to choose the deployment mechanism best suited for them.
- Improve v2 Protocol Staking (Olympus DAO, Rehypothecation) Mentioned previously at the release of our v1 staking (the veWTF lock-up & earn module), the ultimate goal for Waterfall DeFi is to turn the protocol into a blackhole of its own token — the $WTF. As part of ensuring the WTF tokenomics are healthy and sustainable, the upcoming v2 staking will aim to further reduce circulating supply and make WTF deflationary. Existing reserve currency mechanisms pioneered by Olympus DAO and further iterations by other similar protocols show great examples of absorbing good quality revenue generating assets into the DAO treasury. To boost $WTF’s value to the ecosystem, we will build gauges for Waterfall so $WTF emissions will be directed to farms through DAO gauge weight votings (by bribing veWTF holders’ vote), in addition to blending mechanisms from Convex / Olympus models to capture circulating supply into our DAO treasury, limiting supply and therefore outpacing demand for $WTF.
- Set up DAO structure Setting up the DAO will allow veWTF holders the opportunity to participate in protocol-related governance decisions, such as the dispersion of the accumulated protocol fee, future $WTF emissions per product (a gauge setup similar to CRV), and down the line user-generated tranching product elections.
- Create new WTF vault for leveraged farming With plans to introduce a protocol-backed leverage option for users to collateralize their deposit in the tranched product and undergo 1x leverage, a WTF vault will be set up to provide users with additional liquidity options. Users will be able to pay a leverage fee to seamlessly leverage their position in the tranching product to earn additional yield, providing our community with additional yield farming options on top of the 3 layer tranching strategy to maximize return.
- Introduce LP tokens into tranching The ideal grounds for Waterfall tranching products to come into play, LP farming’s high risk (due to impermanent loss) and lucrative yield gives ample space for us to incorporate LP tokens into our portfolio and find a way to tranche the risk of impermanent loss.
- Launch non-EVM compatibility Once we manage to cross into multiple EVM compatible chains, the next logical step for Waterfall DeFi will be to embark on non-EVM compatible chains to preach the tranching concepts to more communities across the Layer-1 space, such as Solana, NEAR and Algorand.
- DIY tranching DAO structuring will be further established with veWTF holders being able to compose their own tranching products to earn fees or vote on other DAO members’ compositions, further decentralizing the protocol and allowing crowdsourcing of yield aggregation or tranching strategies.
- Dynamic tranching Creating a new dynamic tranching setup means Waterfall will be able to run each product in perpetuity, with no time limit. In true dynamic fashion, assets in the portfolio will change based on yield performance, as will return rates, even for Senior and Mezzanine tranches.
- Staking Derivatives tranching With more Layer-1 Blockchains moving to a Proof-of-Stake (PoS) setup and the impending shift on Ethereum to PoS, staking derivatives would hold more significance. The underlying risks from slashing, and the staking derivative issuing protocol itself, will then be able to be tranched by Waterfall’s products. Incorporating staking derivatives of multiple Layer-1s into the product suite will prepare the protocol for a range of interesting assets as the Merge (Ethereum) finally comes.
- Rollups compatibility (Arbitrum, ZKsync, etc.) Moving forward, we plan to collaborate with different rollup protocols to resolve the high gas fee issue that prevented the protocol from launching on the ETH mainnet. With L2-Rollups, we will be able to expand onto the Ethereum DeFi ecosystem, significantly boosting the protocol’s options in our access to different types of yield generating assets, governance protocols and liquidity.
- Chain-Agnostic Yield Network Our final goal is to become chain-agnostic — to be able to compose different chain’s assets into a single portfolio and tranche the risk involved. This would essentially create a liquidity network that taps into different chains, allowing users to farm yields without limits and achieve true composability and diversification.