Difference between revisions of "Saddle (SDL)"

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*Started in / Announced on: [https://www.crunchbase.com/organization/saddle-finance 2020]
*Started in / Announced on: [https://www.crunchbase.com/organization/saddle-finance 2020]
*[[Mainnet]] release: [https://www.coindesk.com/saddle-raises-4-3m-for-slippage-free-defi-trading 19-1-2021]
*[[Mainnet]] release: [https://www.coindesk.com/saddle-raises-4-3m-for-slippage-free-defi-trading 19-1-2021]
*Proposed [https://twitter.com/saddlefinance/status/1688922243714457601 winding down] on 8-8-2023, but tried selling it as a victory.
*Based in: came out of [https://www.coindesk.com/saddle-raises-4-3m-for-slippage-free-defi-trading Silicon Valley] (19-1-2021). With their head quarters in San Fransisco.
*Based in: came out of [https://www.coindesk.com/saddle-raises-4-3m-for-slippage-free-defi-trading Silicon Valley] (19-1-2021). With their head quarters in San Fransisco.
*[[Automated Market Makers (AMM)|AMM]]
*Focused on preventing slippage in value between different types of pegged-value assets like [[stablecoins]] and [[Wrapped Tokens|tokenized]] [[bitcoin]]. Within hours after its launch it got [https://etherscan.io/tx/0x3c351cea655b8a50348e6ffa1bfff5b4ce68f99366cfad3d8a02ffb01f63138a exploited] and had an [https://www.rekt.news/saddle-finance-rekt/ unacceptable amount of slippage] (20-1-2021) for a protocol designed to “fix the problem of slippage in [[DeFi]]”
*Focused on preventing slippage in value between different types of pegged-value assets like [[stablecoins]] and [[Wrapped Tokens|tokenized]] [[bitcoin]]. Within hours after its launch it got [https://etherscan.io/tx/0x3c351cea655b8a50348e6ffa1bfff5b4ce68f99366cfad3d8a02ffb01f63138a exploited] and had an [https://www.rekt.news/saddle-finance-rekt/ unacceptable amount of slippage] (20-1-2021) for a protocol designed to “fix the problem of slippage in [[DeFi]]”


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*Had a [[Quantstamp]] [https://github.com/saddle-finance/saddle-audits/blob/master/12-09-2020_Quantstamp.pdf audit] (10-12-2020):
*Had a [[Quantstamp]] [https://github.com/saddle-finance/saddle-audits/blob/master/12-09-2020_Quantstamp.pdf audit] (10-12-2020):


''"Quantstamp has performed a security review of the Saddle Finance implementation of StableSwap. It is important to note that '''this implementation is ported from in the [[Curve Finance (CRV)|Curve Finance]] [[contracts]], which was used as a reference during the review.''' In total 14 security issues spanning across all severity levels were identified, along with a few deviations from the specification, code documentation issues and best practice issues. '''Due to the poor documentation we were not able to determine how the developers have derived some of the implemented formulas from the StableSwap [[whitepaper]].''' Additionally, we have noticed that all tests in the current test suite use exactly 2 tokens in the pool. We strongly recommend adding more tests that use 3 or more tokens and addressing all identified issues before deploying the code in production.''
''"Quantstamp has performed a security review of the Saddle Finance implementation of StableSwap. It is important to note that '''this implementation is ported from in the [[Curve Finance (CRV)|Curve Finance]] [[contracts]], which was used as a reference during the review.''' In total 14 security issues spanning across all severity levels were identified, along with a few deviations from the specification, code documentation issues and best practice issues. '''Due to the poor documentation we were not able to determine how the developers have derived some of the implemented formulas from the StableSwap [[whitepaper]].''' Additionally, we have noticed that all tests in the current test suite use exactly 2 [[tokens]] in the pool. We strongly recommend adding more tests that use 3 or more tokens and addressing all identified issues before deploying the code in production.''


''The implemented relation looks different (from the original StableSwap). We are not able to understand how this relation is derived from the relation in the original StableSwap paper, mentioned at the beginning of this description."''
''The implemented relation looks different (from the original StableSwap). We are not able to understand how this relation is derived from the relation in the original StableSwap paper, mentioned at the beginning of this description."''
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===Bugs/Exploits===
===Bugs/Exploits===


* [https://newsletter.blockthreat.io/p/blockthreat-week-17-2022?token=eyJ1c2VyX2lkIjoxMzk3OTAwLCJfIjoicTgvVWsiLCJpYXQiOjE2NTMwNDMzNTYsImV4cCI6MTY1MzA0Njk1NiwiaXNzIjoicHViLTgxMDUiLCJzdWIiOiJwb3N0LXJlYWN0aW9uIn0.m8dAg21p-Zeb4OQ7gzXAJZYJRR0v_Nvq4r6ViV8Q2Ik&s=r From] Blockthreat (3-5-2022):
''"On April 30, 2022 Saddle Finance lost $11M in a price [https://rekt.news/saddle-finance-rekt2/ manipulation attack]."''
*[https://www.rekt.news/saddle-finance-rekt/ From] [[Rekt]] (20-1-2021):
*[https://www.rekt.news/saddle-finance-rekt/ From] [[Rekt]] (20-1-2021):


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* From their [https://saddle.exchange/#/risk website] (17-6-2021):
* From their [https://saddle.exchange/#/risk website] (17-6-2021):


''"Saddle's [[Admin Key|admin keys]] are controlled by a 3/5 [[Gnosis (GNO)|Gnosis Safe]] [[Multi-Signature|multisig]]. The signers are [[Mariano Conti]], [[Kain Warwick]], [[Degen Spartan|DegenSpartan]], Klim K, and [[Damir Bandalo]]. This multisig has capabilities to pause new deposits and trades in case of technical emergencies. Users will always be able to withdraw their funds regardless of new deposits being paused. The multisig can also change the swap/withdrawal fees and the per pool/account deposit limits."''
''"Saddle's [[Admin Key|admin keys]] are controlled by a 3/5 [[Gnosis (GNO)|Gnosis Safe]] [[Multi-Signature|multisig]]. The signers are [[Mariano Conti]], [[Kain Warwick]], [[Degen Spartan|DegenSpartan]], Klim K, and [[Damir Bandalo]]. This [[multisig]] has capabilities to pause new deposits and trades in [[case]] of technical emergencies. Users will always be able to withdraw their funds regardless of new deposits being paused. The multisig can also change the swap/withdrawal [[fees]] and the per pool/account deposit limits."''


===DAO===
===DAO===
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* From their [https://blog.saddle.finance/announcing-the-saddle-sdl-token/ blog] (11-2021):
* From their [https://blog.saddle.finance/announcing-the-saddle-sdl-token/ blog] (11-2021):


''"SDL token holders can vote on proposals to improve Saddle and allocate treasury funds.  Initially, the proposals will be on [[Snapshot (The Portal)|Snapshot]], which the current community [[Multi-Signature|multisig]] will then enact. Discourse will be the platform for discussion of the proposals. We expect proposals in the next few months to migrate to fully on-chain governance using the [[Compound (COMP)|Compound]] Governor Bravo and add additional token economics."''
''"SDL [[token]] holders can vote on proposals to improve Saddle and allocate treasury funds.  Initially, the proposals will be on [[Snapshot (The Portal)|Snapshot]], which the current community [[Multi-Signature|multisig]] will then enact. Discourse will be the platform for discussion of the proposals. We expect proposals in the next few months to migrate to fully [[on-chain]] [[governance]] using the [[Compound (COMP)|Compound]] Governor Bravo and add additional token economics."''
 
===Treasury===
==Token==
==Token==
===Launch===
===Launch===
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* From their [https://blog.saddle.finance/announcing-the-saddle-sdl-token/ blog] (11-2021):
* From their [https://blog.saddle.finance/announcing-the-saddle-sdl-token/ blog] (11-2021):


''"51% of the SDL genesis supply is allocated to Saddle community members, of which 15% has already been allocated to historical users (vested over 2-3 years)"''
''"51% of the SDL [[genesis]] supply is allocated to Saddle community members, of which 15% has already been allocated to historical users (vested over 2-3 years)"''
 
===Utility===
===Other Details===
==Coin Distribution==
==Technology==
==Technology==


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=== Implementations ===
=== Implementations ===


*Built on: [[Ethereum (ETH)|Ethereum]], will [https://saddle.finance/ integrate] [[Synthetix Network Tokens (SNX)|Synthetix's]] synths (17-6-2021).
*Built on: [[Ethereum (ETH)|Ethereum]], will [https://saddle.finance/ integrate] [[Synthetix Network Tokens (SNX)|Synthetix's]] [[synths]] (17-6-2021).
*Saddle Finance is [https://twitter.com/CurveFinance/status/1351564385957924864?s=20 copied directly] from the [[Curve Finance (CRV)|Curve]] code, but whereas Curve is written in [[Vyper]], Saddle rewrote it in [[Solidity]].
*Saddle Finance is [https://twitter.com/CurveFinance/status/1351564385957924864?s=20 copied directly] from the [[Curve Finance (CRV)|Curve]] code, but whereas [[Curve]] is written in [[Vyper]], Saddle rewrote it in [[Solidity]].
 
===How it works===
===Fee Mechanism===
===Upgrades===
===Staking===
===Liquidity Mining===
===Liquidity Mining===


* From their [https://blog.saddle.finance/announcing-the-saddle-sdl-token/ blog] (11-2021):
* From their [https://blog.saddle.finance/announcing-the-saddle-sdl-token/ blog] (11-2021):


''"5% of SDL (50,000,000 SDL) has been allocated to liquidity mining programs across [[Ethereum (ETH)|Ethereum]], [[Arbitrum]], and (later) [[Optimism]] which can be earned without any vesting.'' "
''"5% of SDL (50,000,000 SDL) has been allocated to liquidity [[mining]] programs across [[Ethereum (ETH)|Ethereum]], [[Arbitrum]], and (later) [[Optimism]] which can be earned without any vesting.'' "


*[https://defirate.com/saddle-finance-amm/ From] [[DeFi Rate]] (20-1-2021):
*[https://defirate.com/saddle-finance-amm/ From] [[DeFi Rate]] (20-1-2021):


''"The DeFi protocol is bootstrapping [[liquidity]] through a deal with [[Thesis|Keep Network]] (also built by Thesis) that will set aside 125,000 KEEP per week to payout to Saddle’s [[Liquidity Provider (LP)|liquidity providers]]."''
''"The DeFi protocol is bootstrapping [[liquidity]] through a deal with [[Thesis|Keep Network]] (also built by Thesis) that will set aside 125,000 KEEP per week to payout to Saddle’s [[Liquidity Provider (LP)|liquidity providers]]."''
===Scaling===
===Interoperability===
===Other Details===
==Oracle Method==
==Privacy Method==
==Compliance==
==Their Other Projects==
==Roadmap==
==Roadmap==
*Can be found [Insert link here].


* [https://www.coindesk.com/saddle-raises-4-3m-for-slippage-free-defi-trading From] [[CoinDesk]] (19-1-2021):
* [https://www.coindesk.com/saddle-raises-4-3m-for-slippage-free-defi-trading From] [[CoinDesk]] (19-1-2021):


''"Saddle plans to use [[Synthetix]]’s virtual synths. (Synthetix makes synthetic assets where instead of trading [[ETH]] for USD, users trade sETH for sUSD.) [[Sunil Srivatsa|Srivatsa]] said there is currently a limitation with the Synthetix system, since trades between “synths” come with a five-minute settlement delay before a trader gets the underlying assets (this is to prevent [[Frontrunners|front running]]). Virtual synths fix this by introducing a new token that basically represents a claim on that unsettled trade, Srivatsa said.''
''"Saddle plans to use [[Synthetix]]’s virtual synths. (Synthetix makes [[synthetic]] assets where instead of trading [[ETH]] for USD, users trade sETH for [[sUSD]].) [[Sunil Srivatsa|Srivatsa]] said there is currently a limitation with the Synthetix system, since trades between “synths” come with a five-minute settlement delay before a trader gets the underlying assets (this is to prevent [[Frontrunners|front running]]). Virtual synths fix this by introducing a new token that basically represents a claim on that unsettled trade, Srivatsa said.''


''“So you can use that as a placeholder, atomically, and then settle after the fact,” he said. “The reason you want to do this is because synths also have this pretty exciting property where you can trade between them with no slippage – at any size, up to the size of Synthetix’s global pool.”''
''“So you can use that as a [[placeholder]], atomically, and then settle after the fact,” he said. “The reason you want to do this is because synths also have this pretty exciting property where you can trade between them with no slippage – at any size, up to the size of Synthetix’s global pool.”''


==Usage==
==Usage==
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===Projects that use or built on it===
===Projects that use or built on it===


* [[Alchemix (ALCX)|Alchemix]] [https://twitter.com/AlchemixFi/status/1404628381686108164 turned to] (15-6-2021) Saddle for its alETH pool. The announcement attracted a lot of negative attention and even turned [[Curve Finance (CRV)|Curve]] to propose not giving them CRV rewards through one of Alchemix's strategies.
* [[Alchemix (ALCX)|Alchemix]] [https://twitter.com/AlchemixFi/status/1404628381686108164 turned to] (15-6-2021) Saddle for its alETH pool. The announcement attracted a lot of negative attention and even turned [[Curve Finance (CRV)|Curve]] to propose not giving them CRV rewards through one of [[Alchemix]]'s strategies.


==Competition==
==Competition==
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''"“Personally, I think this is a knee-jerk reaction from Curve’s community members who are less technical or less familiar with clean room implementation cases,” Saddle engineer John Lim said in a direct message. He added that Saddle is a re-implementation of the StableSwap algorithm in [[Solidity]], not a “line-by-line” reproduction of the entire project."''
''"“Personally, I think this is a knee-jerk reaction from Curve’s community members who are less technical or less familiar with clean room implementation cases,” Saddle engineer John Lim said in a direct message. He added that Saddle is a re-implementation of the StableSwap algorithm in [[Solidity]], not a “line-by-line” reproduction of the entire project."''


==Pros and Cons==
==Cons==
===Pros===
* Had investment from [[FTX (FTT)|Alameda Research]]/FTX. This could mean fall-out risk. [https://docs.google.com/spreadsheets/d/1xoYqw-5EjQIiunX75UzozzMPOspm0KwFzgA-SKBcvyo/edit#gid=0 Turned out] (8-12-2022) to have sold $100k worth of tokens to [[Alameda]].
===Cons===
 
==Team, Funding, Partnerships, etc.==
==Team, Funding, Partners==
===Team===
===Team===


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*From their [https://saddle.finance/ website] (17-6-2021):
*From their [https://saddle.finance/ website] (17-6-2021):


''"Saddle is built by DeFi natives with years of prior experience at Web2 companies like Uber, Amazon, and Square."''
''"Saddle is built by DeFi natives with years of prior experience at Web2 companies like [[Uber]], [[Amazon]], and [[Square]]."''


* [https://twitter.com/CurveFinance/status/1404682025563533312?s=20 Curve] called out Saddle saying it is a 'line for line' code [[fork]] off of Curve (15-6-2021).
* [https://twitter.com/CurveFinance/status/1404682025563533312?s=20 Curve] called out Saddle saying it is a 'line for line' code [[fork]] off of Curve (15-6-2021).
Line 148: Line 130:
===Funding===
===Funding===


* [https://www.coindesk.com/saddle-raises-4-3m-for-slippage-free-defi-trading Raised] (19-1-2021) $4.3 million in seed funding from [[Framework Ventures]], [[Polychain Capital]] and [[Electric Capital]]. [[Linda Xie|Linda Xia]] and [[Qiao Wang]] are both also [https://www.crunchbase.com/organization/saddle-finance/company_financials mentioned] by Crunchbase (17-6-2021).
* [https://www.coindesk.com/saddle-raises-4-3m-for-slippage-free-defi-trading Raised] (19-1-2021) $4.3 million in [[seed]] funding from [[Framework Ventures]], [[Polychain Capital]] and [[Electric Capital]]. [[Linda Xie|Linda Xia]] and [[Qiao Wang]] are both also [https://www.crunchbase.com/organization/saddle-finance/company_financials mentioned] by Crunchbase (17-6-2021).
*[[Dragonfly Capital Partners|Dragonfly Capital]], [[Divergence Ventures|Divergence]], [[FTX (FTT)|Alameda Research]], [[Coinbase (COIN)|Coinbase Ventures]], [[BoostVC]] and [[Nascent]] are also mentioned on their website (17-6-2021).
*[[Dragonfly Capital Partners|Dragonfly Capital]], [[Divergence Ventures|Divergence]], [[FTX (FTT)|Alameda Research]], [[Coinbase (COIN)|Coinbase Ventures]], [[BoostVC]] and [[Nascent]] are also mentioned on their website (17-6-2021).
*Raised another $7.5M, led by Polychain and Electric Capital with participation from Nascent, Project Galaxy and others (11-11-2021).  
*Raised another $7.5M, led by [[Polychain]] and Electric Capital with participation from Nascent, Project Galaxy and others (11-11-2021).  


===Partners===
===Partners===
Line 161: Line 143:
Making these free wiki pages is fun but takes a lot of effort and time.
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Latest revision as of 04:11, 9 August 2023

Basics

History

"“Personally, I think this is a knee-jerk reaction from Curve’s community members who are less technical or less familiar with clean room implementation cases,” Saddle engineer John Lim said in a direct message. He added that Saddle is a re-implementation of the StableSwap algorithm in Solidity, not a “line-by-line” reproduction of the entire project."

Audits & Exploits

"Quantstamp has performed a security review of the Saddle Finance implementation of StableSwap. It is important to note that this implementation is ported from in the Curve Finance contracts, which was used as a reference during the review. In total 14 security issues spanning across all severity levels were identified, along with a few deviations from the specification, code documentation issues and best practice issues. Due to the poor documentation we were not able to determine how the developers have derived some of the implemented formulas from the StableSwap whitepaper. Additionally, we have noticed that all tests in the current test suite use exactly 2 tokens in the pool. We strongly recommend adding more tests that use 3 or more tokens and addressing all identified issues before deploying the code in production.

The implemented relation looks different (from the original StableSwap). We are not able to understand how this relation is derived from the relation in the original StableSwap paper, mentioned at the beginning of this description."

"The Saddle smart contracts were audited by OpenZeppelin, Quantstamp, and Certik."

Bugs/Exploits

  • From Blockthreat (3-5-2022):

"On April 30, 2022 Saddle Finance lost $11M in a price manipulation attack."

"After the Saddle Finance pools were arbitraged for millions within hours of launch, the Saddle team were forced to release a formal excuse for their performance, which contained an unacceptable amount of slippage for a protocol designed to “fix the problem of slippage in DeFi". Igor Igamberdiev released several warnings advising users to exit the Saddle Finance pools, while their founder Matt Luongo showed no sympathy for the users who lost money by using the protocol he had helped to copy.

At least three major arbs took over 7.9 BTC ($275,735) from the early liquidity providers within 6 minutes."

Governance

Admin Keys

"Saddle's admin keys are controlled by a 3/5 Gnosis Safe multisig. The signers are Mariano Conti, Kain Warwick, DegenSpartan, Klim K, and Damir Bandalo. This multisig has capabilities to pause new deposits and trades in case of technical emergencies. Users will always be able to withdraw their funds regardless of new deposits being paused. The multisig can also change the swap/withdrawal fees and the per pool/account deposit limits."

DAO

  • From their blog (11-2021):

"SDL token holders can vote on proposals to improve Saddle and allocate treasury funds.  Initially, the proposals will be on Snapshot, which the current community multisig will then enact. Discourse will be the platform for discussion of the proposals. We expect proposals in the next few months to migrate to fully on-chain governance using the Compound Governor Bravo and add additional token economics."

Token

Launch

"There is no native token attached to Saddle Finance at the moment."

Token Distribution

  • From their blog (11-2021):

"51% of the SDL genesis supply is allocated to Saddle community members, of which 15% has already been allocated to historical users (vested over 2-3 years)"

Technology

Implementations

Liquidity Mining

  • From their blog (11-2021):

"5% of SDL (50,000,000 SDL) has been allocated to liquidity mining programs across Ethereum, Arbitrum, and (later) Optimism which can be earned without any vesting. "

"The DeFi protocol is bootstrapping liquidity through a deal with Keep Network (also built by Thesis) that will set aside 125,000 KEEP per week to payout to Saddle’s liquidity providers."

Roadmap

"Saddle plans to use Synthetix’s virtual synths. (Synthetix makes synthetic assets where instead of trading ETH for USD, users trade sETH for sUSD.) Srivatsa said there is currently a limitation with the Synthetix system, since trades between “synths” come with a five-minute settlement delay before a trader gets the underlying assets (this is to prevent front running). Virtual synths fix this by introducing a new token that basically represents a claim on that unsettled trade, Srivatsa said.

“So you can use that as a placeholder, atomically, and then settle after the fact,” he said. “The reason you want to do this is because synths also have this pretty exciting property where you can trade between them with no slippage – at any size, up to the size of Synthetix’s global pool.”

Usage

Projects that use or built on it

  • Alchemix turned to (15-6-2021) Saddle for its alETH pool. The announcement attracted a lot of negative attention and even turned Curve to propose not giving them CRV rewards through one of Alchemix's strategies.

Competition

"Btw 99% sure that the way Saddle reimplemented the code (line-by-line translation from one language to another, unless anything changed) violates the license on Curve contracts. Just saying."

"“Personally, I think this is a knee-jerk reaction from Curve’s community members who are less technical or less familiar with clean room implementation cases,” Saddle engineer John Lim said in a direct message. He added that Saddle is a re-implementation of the StableSwap algorithm in Solidity, not a “line-by-line” reproduction of the entire project."

Cons

Team, Funding, Partners

Team

"Saddle is built by DeFi natives with years of prior experience at Web2 companies like Uber, Amazon, and Square."

  • Curve called out Saddle saying it is a 'line for line' code fork off of Curve (15-6-2021).

Funding

Partners

  • Part of the second cohort (18-9-2020) of startups that joined the DeFi Alliance’s accelerator program.

(:

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