Welcome to another exciting AMA session hosted by BeInCrypto! Today, we’re joined by a visionary in the DeFi space, Evan Deutsch, also known as Mark, the Core Contributor and Co-Inventor of Clone Protocol.
Mark will also share insights on the innovative trading processes on Clone DEX and explore Clone’s technical prowess compared to traditional DeFi platforms. Learn directly from the source about the creation of cloned assets, their benefits, and how they can significantly improve your trading strategies.
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AMA session with Clone Protocol
BeInCrypto: It’s AMA time 🔥 Our today’s guest is Evan Deutsch, AKA Mark, Core Contributor & Co-Inventor of Clone Protocol.
🗣 COMMUNITY: As usual, I have some questions for Mark, and then he will answer the 5 most interesting questions from you (quick reminder: we collected these questions in advance)! These 5 lucky Community members will get $20 🤑
Let’s start with the simple questions that arise when you hear about clAssets (cloned assets). What are they? And how does the trading process work on your Clone DEX?
Mark: Great question, Cloned Assets are synthetic derivatives that are designed to bring liquidity to non-native tokens on Solana.
clAssets are supported by our unique Comet Liquidity System (CLS), but trading them is as easy as it gets. Simply swap USDC for any cloned asset on Clone Markets, our dedicated, intuitive frontend for traders.
Currently, we’ve listed Cloned Arbitrum, Cloned Optimism, Cloned Sui, and Cloned Dogecoin. Clone is currently the only spot market available to trade any of these tokens on Solana, and we are quickly scaling to new markets.
BIC: And what are the technical advantages of using Clone compared to existing DeFi solutions?
Mark: Bridging solutions allow anyone to wrap a token and bring it to the Solana ecosystem. These bridged assets very rarely have liquidity on Solana, and even more rarely have utility.
This problem isn’t unique to Solana, it’s very difficult across the crypto space to move and actually use tokens between chains.
We believe the future is multichain, and crypto needs a scalable, sustainable solution to this problem. Clone, and our cloned assets, are that solution.
Our DEX has the power to bring liquidity to non-native tokens without ever needing to touch a bridge, and our hyper-efficient liquidity model allows us to scale to new non-native token markets very quickly.
BIC: Can you explain the process of creating a cloned asset? 👀 What are the steps involved?
Mark: One interesting quality of the CLS is that our comet liquidity positions, or more simply “comets”, are cross-margin. This means LPs can provide leveraged liquidity to every clAsset pool simultaneously with one position using only USDC!
For this reason, creating a new cloned asset is incredibly simple, we run an instruction in our smart contracts to add the new pool, and LPs can immediately allocate liquidity without needing to move any capital.
Each clAsset also needs a trusted oracle price (we utilize PYTH) and a trusted bridged asset (we use deBridge or Wormhole) to ensure that the asset remains secure and stable.
BIC: Why did you choose Solana blockchain?
Mark: Our goal has always been to build a DEX that can bring an efficient, scalable solution to the bridged asset liquidity issue. When it comes to efficiency and scalability, we see no better option than Solana. Also, because Solana isn’t EVM based, it’s even more difficult to bridge over liquidity for many popular tokens.
We have been building on Solana since 2021, it’s been a rollercoaster, but we’ve remained committed to the blockchain that we believe to be the most powerful in the world.
BIC: Ok, I believe this question will be interesting for our Community 🙌 How can Clone help crypto traders improve their trading strategies? What are some real-world examples of how Clone can be used to gain an edge in the market?
Mark: By bringing non-native token liquidity to Solana using clAssets, we are making it possible to trade any token with incredibly low transaction fees and quick execution speed on a completely decentralized platform.
Additionally, cloned assets open up other trading options within Solana DeFi, one example being funding rate farming.
I just wrote an article on this, but in a nutshell you can farm perp funding rates by establishing the profitable position on the perp DEX, and the opposite position on Clone. This can all be done without leaving Solana.
BIC: How does Clone Protocol envision the role of Solana as a hub for trading any token from any chain using clAssets?
Mark: As I’ve mentioned, we believe Solana is the most powerful blockchain in the world, and we are passionate about helping the chain reach its full potential
Why should Solana maxis be the only ones able to enjoy the benefits of Solana’s cheap transaction cost and speed?
By making any token available to use and trade on Solana, the chain becomes the most capital-efficient decentralized platform to trade any token!
Most people agree the future is multichain, but in that multichain future, we believe the vast majority of traders will flock to Solana, and because of Clone, they will be able to trade any token.
BIC: How many clAssets are available on Clone Markets now? 🤔
Mark: There are currently 4 available tokens: clARB, clOP, clSUI, and clDOGE. And we are very quickly adding more!
BIC: Ok, what about ‘comets’? What are they in the context of the Clone Liquidity platform? ☄️
Mark: Comets are the name of our unique liquidity positions. They have unique characteristics like being supported entirely by USDC, being cross-margin, and supporting leverage.
These unique positions are very flexible and efficient, but they can be a bit complex for newcomers. The “Comet” section of Clone Liquidity was designed specifically to make managing your comet as easy as possible.
Comets, and the CLS, are what allow us to scale to new cloned asset markets so quickly.
BIC: Could you provide step-by-step guidance on how users can start creating comets and providing liquidity on Clone Liquidity? 🦾
Mark: Of course! There are really only 2 simple steps.
Step 1: Add collateral, which is in USDC, to your comet.
Step 2: Add liquidity to as many pools as you’d like, with the leverage of your choice!
It’s important to understand each component of your comet liquidity position, especially the Health Score and the ILD (impermanent loss debt).
The health score quantifies the risk of your position, if it ever reaches 0, you are subject to liquidation.
The ILD is the debt you owe based on the impermanent loss of your position, it negatively impacts your health score so it’s very important to monitor.
BIC: We love short instructions 😁 How can users borrow Cloned Assets? Who will this feature be useful for?
Mark: Borrowing on Clone requires 250% over collateral, and it can be useful for shorting or arbitraging clAssets. Most users won’t need to use the borrowing functionality on Clone Liquidity.
If you want to borrow/lend cloned assets, it’s almost certainly more capital efficient to use our Clone pool on Solend!
BIC: Mandatory question for all our AMA sessions 🤷🏻♀️ What measures does Clone Protocol take to address potential risks associated with flash loan attacks and other security vulnerabilities in the DeFi space?
Mark: We are audited by Halborn, but as we all know, an audit is not sufficient for guaranteeing safety.
Every day our team spends time trying to find vulnerabilities and “hack” our own platform. We understand the responsibility a DEX must undertake, and each we are 100% committed to putting ourselves in the shoes of a hacker and plugging any potential vulnerabilities.
BIC: How does the Cloner community influence Clone DEX development? Can you elaborate on the decision-making process within Clone Protocol’s governance model? How will token holders participate and influence proposals or changes to the protocol?
Mark: There is nothing more important to us than our community of Cloners, they drive every decision we make. For example, most changes to our frontends, partnerships/promotions, and new cloned asset listings are ideas that come directly from our community
We haven’t launched a token yet, but a critical part of it’s utility will be for governance.
BIC: In what ways is Clone Protocol pushing the boundaries of what’s possible in the Solana DeFi ecosystem, and what challenges are you aiming to overcome?
Mark: We are building a brand new product from scratch to solve a problem no one else has tried to solve before. We understand that many crypto users out there are frustrated with the bridging experience and the lack of liquidity for bridged assets, especially on Solana, and we are committed to solving this problem.
We are excited to usher in the new age of cloned assets, where anyone can use any token from any chain within the Solana DeFi ecosystem.
BIC: Will Clone integrate with any popular DeFi wallets or platforms?
Mark: We already have announced partnerships/integrations with key platforms in our ecosystem, like Pyth, deBridge, and Solend.
This is only the beginning, there are many incredible projects on Solana, and together we all make up one amazing Solana community. If we have the opportunity to work with these projects, and teach their communities about what Clone has to offer, we are always more than happy to do so.
BIC: Tell us about the Season 1 of your points program. How can our community members participate in it?
Mark: It’s important to us that $CLN holders are actively using and understanding the product, and this is the purpose of the Clone Points Program.
Users can prove their contribution and understanding of the protocol through trading, providing liquidity, and social engagement through our Zealy campaign.
Participating in the campaign is easy, you can immediately start earning points by trading clAssets on Clone Markets or providing liquidity using Comets on Clone Liquidity.
Currently we have a Trading Points Promotion going on where every trade earns 1.5x points. Also, we have started our first Cloner Classic Giveaway, where we are giving away 135,000 points to 3 lucky traders. Every dollar you trade earns you a ticket toward this random drawing, so starting with just $1 it’s possible for anyone to climb to the top of our leaderboard!
BIC: WOW! Community, pay attention to this offer from Clone!!! Let’s move to the questions from the Community 😏
@ErnestHarbin asks: In what ways does Clone Protocol address the challenges typically associated with cross-chain trading, such as liquidity fragmentation or interoperability issues?
Mark: Thanks for asking @ErnestHarbin, let’s dive a bit deeper into the problem Clone is built to solve.
Liquidity fragmentation, and the general scarcity of bridged asset liquidity and utility is a problem across the crypto space, not just Solana.
The main issues are liquidity being fragmented across multiple versions of the same asset and high risk/high upfront cost required for LPs to create liquid markets for bridged assets.
Clone is purposely designed facilitate the efficient introduction of liquidity for non-native asset using our cross-margined Comet Liquidity System.
By pulling liquidity from a pre-existing pool of USDC, and allowing LPs to contribute without needing to bridge or use other chains, we streamline the process of creating non-native asset markets for new assets on Solana using clAssets.
BIC: The second question is by @sondeptrai5: How does the Hybrid Collateral Model contribute to maintaining price pegs and efficient market operations for clAssets within the Clone Protocol ecosystem?
Mark: Great question @sondeptrai5!
The Hybrid Collateral Model allows users to swap bridged assets for cloned assets directly. For example, Cloned Arbitrum can be swapped 1:1 with deBridge Arbitrum at any time. This creates an arbitrage opportunity whenever cloned asset prices depeg, and ensures they always remain closely pegged to their non-native counterparts overtime.
BIC: @LittleXiaYuann: What is Funding Rate Farming, and how does it enable traders to earn yield in a delta-neutral position on Clone and perpetual exchanges like Drift?
Mark: Thanks for this question @LittleXiaYuann, let’s talk more specifically about how traders can use cloned assets to farm funding rates.
Funding rate farming allows traders to profit off of the funding rates on perp exchanges using delta neutral positions. Perp exchanges on Solana, like Drift, often have funding rates where users who are long an asset pay users who are short if the funding rate is positive, and vice versa if it is negative.
A trader can purchase a cloned asset, say clARB, and short ARB on Drift when the funding rate is positive. This delta-neutral position will earn you passive income from Drift’s funding rate, and points on both Clone and Drift!
BIC: @StefanSisco: What opportunities does the integration of the Clone pool on Solend offer to users, particularly in terms of capital efficiency and trading strategies involving clAssets?
Mark: Glad you brought this up @StefanSisco!
Our Clone pool on Solend allows users to borrow/lend cloned assets alongside SOL and USDC. This pool can be used to make funding rate farming more capital-efficient.
Following our last example, after purchasing clARB, the trader can use the clARB as collateral to borrow USDC or SOL from our Solend pool. They can then use that USDC or SOL to create their perp position on Drift to farm the funding rate. This is just one useful application of the Solend pool.
BIC: The last question is by @ToryCody: Can you discuss Clone Protocol’s vision for democratizing finance, revolutionizing liquidity solutions, and fostering Solana’s mass adoption through the introduction of liquid non-native asset markets?
Mark: From the beginning my Co-Founder, Ku, and I have been passionate about democratizing finance and investment opportunities.
We believe DeFi is the best place to accomplish this goal, and Solana is the best home for DeFi given it’s capital efficiency and speed.
We saw a problem hindering Solana’s growth, the lack of liquidity for non-native tokens, and we have designed Clone specifically to solve this issue.
Cloned assets not only enrich Solana DeFi, but make the Solana ecosystem more accessible to newcomers by allowing them to trade tokens that they are already familiar with. Using cloned assets, we plan to help Solana reach mass adoption and lead the democratization of finance moving into the future.
Final thoughts
As we wrap up this AMA session with Evan Deutsch, we hope you’ve gained valuable insights into Clone Protocol and its transformative impact on the DeFi landscape. The possibilities with cloned assets on the Solana blockchain are strong, offering huge opportunities for liquidity and cross-chain trading efficiency.
Don’t forget to explore Clone Markets and test out the trading strategies discussed today. Stay tuned to BeInCrypto for more updates and future AMAs that continue to bridge the gap between technology and practical application in crypto.
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