What is the Orbit Protocol?

1. What is Orbit Protocol?

The Orbit Protocol is a decentralized liquidity protocol that facilitates favorable conditions for lending and borrowing various assets within the Blast ecosystem.

*dApps use Orbit Protocol's liquidity service*

As of this writing, there are 8 projects currently utilizing the liquidity services of Orbit Protocol include:

Ambient: a DEX platform on the Scroll network
Thruster: a prominent DEX platform on Blast
Ring Protocol: a DEX platform on Blast
Wassabi: an NFT Leverage protocol on Blast
YES: an ERC-420 project
Mangrove: a restaking project on Blast
Particle: permissionless leveraged trading on Blast
Hyperlock: a productivity and super management protocol on Blast

Users who utilize the Lending and Borrowing products on Orbit will receive 100% Blast Points and Blast Gold, in addition to rewards from the $ORBIT token.

2. The products and operational model

2.1 Lending/Borrowing

Orbit Lending operates on a model similar to other lending protocols such as Aave and Compound. This operational model involves users depositing funds into the protocol, providing collateral, and then being able to borrow funds for other activities. Additionally, users can earn additional profits through the $ORBIT token.

However, Orbit operates and leverages primarily from Blast's Native Yield mechanism. All funds deposited by users for lending or borrowing purposes within Orbit generate native yield as usual. The proceeds from this Native Yield are then used to buy back the $ORBIT token, the project's primary token.

With the buyback mechanism, the project redistributes profits to users who have deposited funds into $ORBIT as well as $ORBIT stakers. Moreover, the $ORBIT tokens bought back by the project will gradually be burned, leading to a continuous reduction in supply over a period of 4 years.

Since its launch over 2 months ago, Orbit has burned 2.2 million $ORBIT tokens, equivalent to 2.2% of the total supply.

2.2 Staking

Staking is a key feature of the Orbit Lending protocol, allowing users to lock their $ORBIT tokens for a customizable period of time. The longer the lockup period, the higher the APY (Annual Percentage Yield) for the $ORBIT token.

Currently, Orbit Lending offers APY ranging from 69-200%, depending on the lockup duration, with $ORBIT tokens being directly rewarded. Users can claim these rewards on the protocol weekly.

Staking serves as an incentive to reduce token supply and attract more stakers to the platform. However, Orbit Lending faces the inherent weakness of typical "farming" protocols, where initial high APYs lead to significant token circulation in the early stages, resulting in token dumping.

Recognizing these vulnerabilities, Orbit has reduced the maximum APY to 200% (for a 4-year lockup) from 500%. With the decrease in APY, a considerable amount of Total Value Locked (TVL) has flowed out of the project, from 400 million TVL to 240 million TVL.

In the long term, the relatively reduced APY and increased pace of "BUY BACK AND BURN" for the $ORBIT token are noteworthy advantages. We will elaborate on this further in the subsequent section.

3. Tokenomics

3.1 The allocation ratio and total supply

Total supply: 100,000,000 $ORBIT
Liquidity Incentives: 48% - Released over 10 years
Initial Liquidity: 1% - 100% added as liquidity
Ecosystem Fund: 21% - 1% unlocked at TGE (Token Generation Event), gradually released over 24 months
Team treasury: 13% - Locked for 6 months, then gradually released over 24 months
Private Sale: 12.5% - 15% at TGE, gradually released over 6 months
Advisory: 4% - 1% at TGE, gradually released over 6 months

3.2 Current information about the $ORBIT token

Total $ORBIT staked: 9.5 million $ORBIT
Current circulating supply (excluding staked): 14.6 million $ORBIT
Number of $ORBIT burned: 2.2 million $ORBIT
Number of $ORBIT allocated for inflation: 12.4 million $ORBIT

4. Team

Updating…

5. Investor

Orbit has received backing from several angel investors in the industry, including support from two funds: GBV and Manifold. Manifold is an investment fund that invests in high-quality projects, many of which are winners on Blast. It is also one of the funds that have invested in Blast.

6. Development potential & price range

At present, Orbit Lending remains the leading lending/borrowing protocol in the Blast ecosystem and was also one of the winning protocols in the Blast Big Bang competition.

However, immediately after listing, the project experienced a pump to over 300 million FDV (Fully Diluted Value). With Advisors and Private Investors receiving tokens right after the TGE (Token Generation Event), this may have exerted selling pressure at that time when the project was pushed to a relatively high FDV level.

Furthermore, farming $ORBIT with initially high APYs aimed at attracting liquidity into the protocol has led to increasing selling pressure as more individuals farm $ORBIT tokens and sell them off.

Currently, Orbit is oscillating around a 22 million FDV mark, a relatively low FDV level for a leading lending protocol in the Blast ecosystem, which boasts nearly $2 billion in TVL (Total Value Locked).

Based on experience and personal perspective, this FDV level may closely approach that of Private Sale investors or slightly surpass it. With the FOMO (Fear of Missing Out) and strong development of the Blast ecosystem, it would be challenging for Orbit to raise Private Sale funding below a 15 million FDV threshold.

So, what are the opportunities with $ORBIT?

The project has reduced its APY farming, directly alleviating selling pressure on the $ORBIT token.
$ORBIT is one of the projects with relatively good holders in Blast, with the potential to win Blast Jackpot.
In addition to reducing APY farming, the "buyback and burn" feature is noteworthy, as this figure will gradually increase over time.
There is significant potential in the future as money flows into DeFi in Blast and seeks lending protocols.
$ORBIT has consistently been one of the top recipients of GOLD at Blast since mainnet launch, which is an advantage, as GOLD is distributed to those who deposit funds into Orbit as well as $ORBIT Stakers.
The project has integrated with Restaking protocols such as Kelp, Etherfi, and Renzo. Users can deposit various LRTs to farm $ORBIT, Blast Points, and Blast GOLD.
The FDV level is relatively small for a leading lending project, allowing users to apply a Buy $ORBIT and Stakes strategy. Besides receiving Blast Points and GOLD, after 6 months to 1 year with a 100% APY, users would have acquired $ORBIT tokens with an FDV of just over $10 million. However, this approach carries risks regarding the security of the protocol and liquidity lock-ups.

However, we also need to consider some potential risks associated with the $ORBIT token in the future:

The team has not clearly outlined the schedule and plan for buyback and burn. They have not specified the quantity and specific timing but only announced after they have burned tokens.
The product lacks novelty and innovation, needing further development in the future to maintain its position as number one at Blast.
The project's community and social development are lacking, with little interaction with users on Discord and minimal engagement on Twitter.

7. Conclusion

Orbit Lending is the leading lending/borrowing protocol in Blast, and the project has seen relatively good initial numerical developments.

However, controlling inflation remains a protocol issue that needs to be addressed, and we have seen initial solutions at this stage.

Orbit appears to have a relatively small FDV (Fully Diluted Value). Compared to other top lending projects in other ecosystems such as Navi (SUI) with a 125 million FDV or Zerolend (Linea) with a 50 million FDV, Orbit's valuation seems quite reasonable.

Furthermore, with Blast having a massive amount of money, and this money not yet fully flowing into DeFi, there is still significant potential.

With Blast launching its token at the end of June, this could bring in a substantial amount of money and incentives into the Blast ecosystem. Undoubtedly, we may see Blast tokens being used as collateral in some lending protocols to continue leveraging funds in the Blast ecosystem.

Orbit is a potential lending project in the Blast ecosystem, but you also need to consider the project's future risks. It's evident that they haven't introduced new products or breakthrough products since their launch. Additionally, their ability to develop communication channels is currently a weakness.

Above is an analysis of the Orbit Lending project and the potential of the $ORBIT token in the future. Stay tuned to Theblock101 for more quality insights.

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