Trisolaris is the leading decentralized exchange on Aurora and it\’s showing out-of-this-world growth. How does this intergalactic operation work? Does the tech come in peace? Join me as I orbit this protocol and discuss where it came from, what it’s doing here and what’s in store for the future of Trisolaris.
Aurora – The EVM Compatible Answer
“If you wish to make an apple pie from scratch, you must first invent the universe”Carl Sagan
“If you wish to make an EVM compatiable decentralized exchange on the NEAR blockchain, you must have a Layer 2 solution called Aurora”Carl Sagan’s lesser known fan, Brick Frog
To understand Trisolaris, you must first understand the cosmic engine it exists within. Trisolairs operates within Aurora, which launched in May 2021 as an Ethereum Layer-2 experience that runs on the NEAR protocol. Originally framed as a turnkey solution for upcoming developers seeking to extend their dApps across multiple markets, Aurora has become an integral part of the NEAR ecosystem, offering high throughput, scalability, and those low transaction fees we all crave in DeFi. If you’d like a deeper dive into the NEAR universe, join Naly as he explores Far and NEAR.
Aurora consists of two core components: the Aurora Engine runtime, which allows for the seamless deployment of Solidity and Vyper smart contracts, and the Aurora Bridge (based on the Rainbow Bridge technology), providing for the permissionless transfer of tokens and data between Ethereum and Aurora. The Aurora engine allows for Trisolaris to exist in this otherwise non-compatible blockchain.
Marrying the benefits of the Ethereum and NEAR networks, Aurora provides a number of enhancements for developers and users alike. Aurora’s EVM compatibility allows for ERC-20 tokens to trade on the same network as Near Enhancement Proposals (NEP) tokens.
Uniquely, Aurora is implemented as a smart contract on the NEAR blockchain. This allows Aurora to benefit from the current and future advantages of the NEAR blockchain and offers a simplified process for early-stage maintenance, upgrades, and governance.
If you have more questions about Aurora, check out the original launch post by the NEAR team.
Birth of the Stars
In the beginning (of Aurora), there was Trisolaris. The protocol was the first DeFi project on the Aurora engine and is a fork of the DeFi gold standard project that is Uniswap. Uniswap pioneered the automated market maker (AMM) design that allows liquidity providers (LPs) to supply their tokens into liquidity pools over traditional order books. Uniswap walked so Trisolaris could soar. For a detailed walk-through of the different kinds of AMMs, why not check out Charles’s article here.
Trisolaris announced its intention to be a one-stop trading platform on the Aurora network in September 2021. The team outlined early that its focus would be tackling the problems that plague DeFi, such as capital efficiency, on-chain order books, limit orders, proper liquidity incentives, and derivatives.
The team would go on to announce its official Beta launch in October 2021. The protocol launched with a fully-featured dex, with a simple and intuitive UI, that seamlessly allowed users to:
- Provide Liquidity for any ERC20 tokens on Aurora
- Swap between any ERC20 tokens
- Earn fees for providing liquidity
- Provide a seamless DEX experience to Ethereum native users
A Tour of the System
We’ve figured out the universe that is Aurora. We’ve pinpointed the birth of Trisolaris. Now, let’s take a trip into the local Tri Solar System and visit the native TRI tubbies (the cute little astronaut mascots).
Planet 1 – Putting the Exchange in Decentralized Exchange
The exchange/swap function is where you’ll go to trade one token for another.
The liquidity for these swaps comes from LPs who stake their tokens in pools. In exchange, they get LP tokens, which can be staked to earn TRI tokens in the farm but more on those later.
Trisolaris is the only decentralized exchange on Aurora that allows users to swap across multiple AMMs from one unified user interface. As we mentioned, Trisolaris is a fork of Uniswap and built on Uniswap’s “Constant Product” AMM invariant (seriously, check out the AMM article we suggested before to understand what we’re talking about). This version is great for swapping between any two assets, bootstrapping liquidity, and determining price without the use of a centralized third party. However, it did have some downsides when trading ‘similar assets’. Enter another titan of DeFi, Curve Finance, and their StableSwap Exchange invariant, which offers significantly lower slippage between stablecoin trades over Uniswaps alternative.
Trisolaris launched its Stable AMM, which uses smart-order routing to automatically direct users\’ trades to the AMM (Constant Product AMM vs. Stable AMM) with the deepest liquidity, lowest slippage, and the most efficient execution. Enter your trade into Trisolaris’s Swap function, and the protocol will take care of the rest.
When you trade on Trisolaris, you will pay a 0.3% trading fee, which is split into two functions. 0.25% of the fee will be paid to liquidity pools in the form of a trading fee for liquidity providers. By adding liquidity, you\’ll earn 0.25% of all trades on this pair, proportional to your share of the pool. Fees are added to the pool, accrue in real-time, and can be claimed by withdrawing your liquidity.
The other 0.05% will be sent to the TRI token farm.
Planet 2 – Yield Farming
Yield farming. It’s every DeFi degens bread and butter. Deposit your LP tokens into a farm and earn yield. In this system, any yield is rewarded in $TRI tokens, dual token rewards (e.g., $TRI + $AURORA), or other ecosystem tokens. Trisolaris rewards are updated every few seconds for those that like seeing the number go up! But what does one do with all this extra $TRI?
Planet 3 – Tri Staking and pTRI
So you’ve got all this TRI lying around. Enter Profit TRI (pTRI), the new TRI staking mechanism. Users that stake TRI will get pTRI which will earn a % of protocol revenue in the form of stablecoin LP tokens. That’s right! pTri stakers will receive LP tokens from the network 3Pool, which is comprised of USN, USDC, and USDT.
Trisolaris will convert all revenue into USN, USDT, and USDC. Trisolaris will then add these tokens to the existing 3Pool to get LP tokens back, which are then distributed to stakers based on their proportion in the staking pool. Users can elect to claim the LP tokens for some of the stablest coins or claim + auto stake back into the 3Pool farm.
Here are the
five six easy steps on how the protocol achieves such a goal
1- The USDCMaker – converts normal AMM fees to USDC
2- USDC is sent to the stableLPMaker
3- Combines with the stableswap fees
4- Converts to stableswap LP
5- Sends to pTRI as rewards
6- Happy users (I may have added this step)
Check out their documentation here for more details and contract addresses.
5Pool: An initiative spared from Terra
This lovely 3Pool was not the first iteration of this idea, with the initiative originally being backed by the 5Pool Stableswap. This 5Pool contained USDC, USN, USDT, FRAX, and the now infamous UST. Immediately after the ‘Terrabile’ incident with Do Kwon, the team was able to hide the 5Pool from the UI and all Trisolaris users were saved, no funds were lost.
And so, Trisolaris decreed that the 5pool would be no more and instead, 2 base pools would take its place. Now a USDC-USDT pool and the previously mentioned 3Pool guard the galaxy. On a serious note, Trisolaris prides itself on offering first-class support for NEAR native assets which is why the 3Pool exists in its current form.
TriNomics – Probing Governance and Tokenomics
Trisolaris has a history of carefully considering its community\’s feedback. This open dialogue was a significant factor in developing the pTRI mechanism over the original xTRI method. xTRI was where users staked their TRI tokens to receive the exchange’s shared revenue in the form of more TRI. After research and feedback from the community, the team implemented the pTRI strategy in use today.
xTRI was used for governance but no governance proposal has been put to vote since the swap to pTRI. The team plans to progressively decentralize the protocol over time so expect more action on the forums and proposals pages in the months to come.
Trisolaris states in their documentation that the 0.3% protocol fee for swaps and where they flow can both be adjusted in the future via governance by TRI token holders.
Token Contract: 0xFa94348467f64D5A457F75F8bc40495D33c65aBB
Total Supply: 500,000,000
Months to emit: 36
- 70% Community + Liquidity Incentives
- 15% Treasury: For future strategic partnerships, investors, and more
- 15% Current & Future Team: 4-month lockup, followed by 12-month vesting. See full details here
For a full list of vesting contracts, visit the Trisolaris tokenomics documentation.
The team plans to systematically reduce the rate of emissions over the first three years of operation across their liquidity mining programs. The first such gradual reduction occurred in February 2022.
Here is a chart that provides a full view of the overall TRI supply distribution and how it comes into circulation:
A brief overview of the different segments above:
- Farming Rewards: The current and future emissions across all liquidity mining farms on Trisolaris.
- Team/Advisors: Vesting TRI tokens allocated for the team and advisors. More info about the plan with these tokens here.
- Marketing & Community: This is a general category that encompasses TRI held in the treasury at the moment that will be used over time for additional community incentives (such as the recently announced retroactive airdrop).
- Future Strategic Investors: This is a portion of the token treasury that is an allocation held out for future strategic investors. It means that in the case that Trisolaris were to raise investor funds in the future (to scale up the team or grow the project further), these would be the tokens allocated for them. These would be vested over time.
Liquidity providers who take their LP tokens from specific pools on the Farms page will be rewarded with additional $TRI from the 70% Liquidity Incentives Allocation.
Trisolaris H1 Report
The Trisolaris DAO was able to raise strategic investment from several venture capitalist (VC) firms, including funding from Electrical Capital, Jump Crypto, Dragonfly Capital, Leminscap, Ethereal Ventures, and a few ‘strategic angels’ in April 2022. This fund has been used to scale the team, develop, and help the team survive during the bear!
The Trisolaris team managed to secure not one, but two grants from Proximity Labs, which were used to distribute $AURORA to users in the form of liquidity mining rewards across Trisolaris farms.
They’ve also partnered with other major players in the Aurora/NEAR/crypto world like Synapse Protocol, Rift Finance, Origami, Bastion, and Polaris Finance. All this and more can be found in their impressive H1 report that explains how the protocol has weathered the first half of 2022.
The Future of Trisolaris
In Q1 of 2022, when candles were green and markets were bullish, Trisolaris reached its all-time high in Total Value Locked (TVL) at $584 million. Now when the times are tough, Trisolaris continues to build and engage with its community showing determination and commitment to its users. Will this project degenerate into a cold lifeless system? Or is this vibrant slice of the Aurora universe just the beginning?