🍪 Frequently Asked Questions

TLX is a novel DeFi protocol built on Optimism, focusing on one core product: Leverage Tokens (LTs). By leveraging Synthetix infrastructure, TLX’s LTs benefit from deep liquidity, low slippage, and cost-effective fees. These tokens use the ERC-20 standard and represent tokenized, auto-managed positions in perpetual futures. They maintain a specific leverage without the user needing to manage margins, liquidations, funding rates, or other complex aspects of perpetual trading. Users can always mint or redeem specific LTs against the contract, and since they are ERC-20 tokens, they can be traded on secondary markets or transferred to other wallets.

In a nutshell, LTs are a new primitive that makes it much easier and user-friendly to access leveraged trading, whether for speculative short-term purposes or for hedging and risk management strategies.

TLXstats is not directly affiliated with TLX. It is a community-run website founded with the intent of making all stats and data related to TLX more easily accessible for TLX investors, traders, the team, and the community. Initially, the project was developed for private consumption because I needed fresh data from the protocol (TVL, volume, etc.), and being so early, this information was not yet parsed from the blockchain.

To introduce myself, I’m gekko, a long-term investor in DeFi. The main reason for needing this info is my investment position in $TLX, which has grown substantial enough to justify this time investment. I’m an old-school, data-driven investor, so having first-hand access to information is crucial.

After requests from the community and team, I decided to make the website public and more complete, using it to maximize what I think is one of the most interesting projects in this space, both from a product perspective and a tokenomics approach. The TLX team approved a Grant to help cover the costs of developing TLXstats, and I’ve been closely connected to the team and community ever since.

By trading on TLX while using a ref-code, you’ll be able to get 35% rebates in redemption fees, paid in sUSD as soon as you redeem a trade. To activate rebates, follow a ref-code link like this one. The next time you initiate a Mint, you’ll have a set-referral transaction that activates your rebates—this is a one-time transaction, set and forget. Rebates can then be claimed in the Rewards section of TLX at any time.

By using our ref code, you help support TLXstats. Thanks 🤠🤙🏻

Most of the data, including “Trades” data, is updated every 5 minutes. Some other data points, such as charts and user PnL, are updated every 15 minutes. More specific or less important data, like $TLX held by users, is updated every few hours.

We parse most of the data directly from the blockchain, compile it, process it, and store it in our database. More specifically, we monitor most of TLX's core contracts.

For TLX price, we monitor Velodrome's wETH/TLX LP. For LTs price, we get it directly from the contract and use past block data for historical data. Some other data, such as TLX held by address, we use synthquest's Dune dashboard.

For total circulating supply, we directly monitor known contracts to get this information independently from any sources. There are also plans to implement more APIs with third-party data to enhance info data sets, such as the DeBank API, etc.

Unlike standard Perps and futures, LTs are designed to never be liquidated. In practice, an LT is a tokenized managed position in Perps, programmed to maintain a certain level of leverage at all times, defined by a range. The position is actively rebalanced when the leverage reaches the upper or lower band of that range. So, unlike standard Perps where the user needs to closely monitor their collateral levels to avoid liquidation when the price goes against them, in LTs, this process happens automatically with the help of Chainlink Oracles and a top-notch product design by TLX.

But this doesn’t come without risk, especially when using high leverage LTs. If a price goes heavily against your position, you won’t get liquidated, but you will suffer heavy losses, and it won’t just take the price going back to the initial point for you to break even.

The same applies to the upside. When the price goes up, your leverage level won’t come down as in Perps due to the rebalancing. LTs are programmed to always maintain the target leverage. So if you trade a 5X LT and it goes up 100%, you will still have a leverage of 5X after that rise (and at all times), so risk management is mandatory. Keep in mind that LTs (and Perps) are meant to be used by sophisticated traders who fully understand the math behind them.

Although the entire system is designed to never be liquidated, it relies on Chainlink Oracles for rebalancing and other price feed oracles like Pyth. In theory, in the event of an Oracle failure to rebalance at the same time as an oversized drawdown in price, the LT could be liquidated. While this is highly unlikely due to the system being heavily battle-tested, it is theoretically possible in extreme cases.

Volatility decay impacts Leverage Tokens (LTs) by eroding their value over time, particularly in highly volatile markets. Here’s a simple explanation using a 5x LT as an example:

Leverage Tokens:
A 5x LT means that for every 1% change in the price of the underlying asset, the LT changes by 5%.

Rebalancing:
Unlike daily rebalancing, LTs rebalance only when the leverage hits a preset upper or lower limit (in this case, the 5x LT range is 4.20x - 6.33x).

Example:
Imagine the underlying asset starts at $100. On Day 1, if the asset price increases by 10%, it goes from $100 to $110. Consequently, the 5x LT would increase by 50%, from $100 to $150.

On Day 2, if the asset price then decreases by 10%, it drops from $110 to $99. The 5x LT would decrease by 50%, from $150 to $75.

Key Takeaway:
Even though the asset price only fell by 1% overall, the 5x LT dropped by 25%. This demonstrates volatility decay, where high volatility leads to frequent rebalancing and compounding losses over time.

Summary:
Volatility decay erodes the value of LTs in volatile markets due to rebalancing within a leverage range. Understanding this risk is crucial for managing high-leverage positions. This is felt more heavily on higher leverage LTs; for example, the 5x LT will experience much more volatility decay than the 2x LT. Additionally, volatility decay is more extreme in higher volatility assets; for example, PEPE LTs will experience more volatility decay than BTC LTs.

⚠️ Disclaimer: Not Financial Advice!

I’ve been vocal about it, and it’s publicly known I’ve been building a sizeable core position in $TLX, likely continuing while the price remains low.

There are 2 main reasons, both from the Fundamental spectrum:

💹 Hard Data: Price to Earn Ratio:

This is simple math, backed by Hard Data. The protocol has generated steady, consistent fees with an annualized projection of $1.25M in Revenues. These are organic, non-inflationary fees from LT redemptions, streaming fees, and Synthetix integration fees. Importantly, these fees are 100% delivered to $TLX stakers as stablecoins (sUSD).

Currently, with a market cap of $4.15M and 47.50% of the circulating supply staked, this means $1.97M of the market cap staked is set to receive $1.25M in fees annually. As an early Staker, I’ve enjoyed higher APRs, making this position self-de-risking despite price fluctuations.

This projected P/E is almost unheard of, and even with higher circulating supplies, the ratio remains exceptionally attractive for a data-driven long-term investor like myself. $TLX is likely the cheapest DeFi gem I’ve seen in years. 💎

🧭 Soft Data: Conservative Projections:

$TLX is currently deployed only on Optimism but will likely expand to Base and Arbitrum due to its use of Synthetix infrastructure. Presently covering just 7 assets, it is expected to cover many more with different leverage types. We’ve only seen a small sample of the final product, deployed just over 2 months ago. So any projection being made with the current data sets are way too conservative, and even so, the results don’t fail to impress.

With this in mind, the current TVL, open interest, and projected annualized fees are likely to increase significantly, making the current P/E even more attractive (assuming the price remains the same, which I doubt).

In summary, we have a novel primitive designed by a smart team on promising infrastructure (Synthetix), creating a product with substantial product-market fit, soon to be deployed across other L2s. Its associated token ($TLX) is a cash flow-generating token that has solved one of DeFi’s greatest challenges of passing value to token holders. Amidst high FDV memes, $TLX stands out with one of the lowest valuations. As an early investor in $AAVE, $SNX, and $LINK, I know how to spot a gem, and this is one of those rare occasions.

⚠️ Disclaimer: Not Financial Advice!

If you currently trade in TLX, the most straightforward way to support TLXstats is simply by using our ref-code.

By trading on TLX while using a ref-code, you’ll be able to get 35% rebates in redemption fees, paid in sUSD as soon as you redeem a trade. To activate rebates, follow a ref-code link like this one. The next time you initiate a Mint, you’ll have a set-referral transaction that activates your rebates—this is a one-time transaction, set and forget. Rebates can then be claimed in the Rewards section of TLX at any time.

If you would like to directly donate TLX or other assets, our donations wallet is: 0x3e152ce22fe70bf9477eaa076aa4f82f686361d1.

So it's a Win+Win, by using our ref code, you help support TLXstats while you enjoy a 35% rebate in fees. Thanks in advance! 🤠🤙🏻

TLXstats doesn't have a specific X account yet, so the best way to engage about TLXstats is probably by using TLX's Discord Channel.

As for direct contact with me (Gekko), the best way to get me to read your message is via DeBank's Hi. You can also follow me on X or Warpcast (my handle is @gekko_eth), but I don't closely monitor my DMs on those platforms.