Ammalgam LP Deal

Ammalgam is a new type of DeFi protocol that combines an AMM and a lending market in a single contract - a Decentralized Lending Exchange (DLEX). LP capital works simultaneously in market-making and lending, improving capital efficiency compared to standard AMMs. The protocol operates without oracles. Backers include Framework Ventures, Lightspeed Faction, Robot Ventures, and Kain Warwick (Synthetix).

Action

Fill out the application form, deposit ETH or USDC, earn 1–9% APY in the vault + $AMG tokens + revenue share

Bonus

5% referral bonus in $AMG tokens + 50% of vault fees redistributed to participants

Description

Ammalgam  LP Deal

Ammalgam is a new type of DeFi protocol that combines an AMM and a lending market in a single contract - a Decentralized Lending Exchange (DLEX). LP capital works simultaneously in market-making and lending, improving capital efficiency compared to standard AMMs. The protocol operates without oracles. Backers include Framework Ventures, Lightspeed Faction, Robot Ventures, and Kain Warwick (Synthetix).

Participation Terms

Deposit ETH or USDC for 90 or 180 days. Hard lock format: if the deposit amount decreases by any amount, all accrued rewards are forfeited.

Minimum participation: 3 ETH or $5,000.

Important: to participate you must fill out the application form before March 18, 2026, 23:59 UTC 👉 Fill out the form

Rewards

Participants receive four types of rewards:

  1. Vault yield. Base return from the market-making strategy: 1-5% APY for ETH, 6–9% APY for USDC.
  2. $AMG tokens. Allocated proportionally to deposit size and duration:
    • 90 days: ETH - 6 bips, USDC - 8 bips per $1M of total token supply
    • 180 days: ETH - 14 bips, USDC - 18 bips per $1M of total token supply
  3. Revenue share. 50% of protocol fees (origination fee on loans + 10% of all interest accrued) is distributed among participants.
  4. Referral bonus. cp0x returns 5% of referral rewards in tokens to participants.
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Fees

Standard vault fees are 1% management and 10% performance. Deal participants receive a 50% discount: effective rates are 0.5% management and 5% performance. The remaining fee revenue, after covering operational costs (hedge options, gas, strategy management), will be used to buy back Ammalgam tokens at TGE.

Vesting

Two options available:

  • TGE 20% + 6-month linear unlock (80%)
  • TGE 20% + 12-month linear unlock (80%) + 33% bonus tokens on top of the base allocation

Vault Strategy

Assets move through three phases:

  1. Assets are deployed into existing Gauntlet Vaults (~2 weeks after vault launch):
  2. Transition to an ETH-USDC market-making strategy with impermanent loss hedging via options on Derive (~2 weeks).
  3. Gradual migration to the Ammalgam protocol (~4 weeks).
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All assets remain on-chain and are verifiable at any time.

Hedging: ~1% of the deposit is used to purchase OTM options on Derive to protect against impermanent loss. Maximum loss within the hedge range is capped at 4%. Hedge range: -70% to +250% from the entry price.

Liquidity for withdrawals: 1% immediately, 20% within 48 hours, 100% within 7 days.

Liquidation thresholds: ETH vault - if the ETH price drops 70.8% from the entry price; USDC vault - if the ETH price rises 340% from the entry price.

Funding History

Pre Seed - September 2022 - $750k @ $12M FDV
Seed - March 2024 - $2.5M @ $20M FDV
Echo - January 2025 - $150k @ $35M FDV
Bridge - $500k @ $50M FDV (filled)

About the Team

The protocol has been in development since 2022. The team has consistently worked on the same core idea - combining AMM and lending in a single product - without pivoting. The protocol was deployed to mainnet in 2024. Multiple audit rounds have been completed, including AI-assisted scans (Savant, Zellic, Chain Security Beta AI Scanner).

Risks

Participation involves the following risks:

  • Smart contract risk of the Ammalgam protocol
  • Smart contract and bridge risk related to Derive (the hedging counterparty)
  • Additional Gauntlet vault risk during the first phase of the strategy
  • Full impermanent loss if the price moves outside the hedge range (-70% or +250% from entry)
  • If the price approaches the hedge boundary, additional rebalancing costs may apply (up to 0.5% of the deposit)
  • Hard lock: any reduction in deposit amount results in the forfeiture of all accrued rewards

This is not financial advice. By participating, you confirm that you understand and accept the risks described above.

 

Useful links

 
 
 
 
 

 

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