Levana Protocol, A Sustainable Trading Platform In The Cosmos Ecosystem

Leading cryptocurrency trading platform Coinstore will list LVN/USDT on January 31. Founded in 2020, Coinstore has served over 700 project teams and listed over 750 trading pairs. Trusted by more than 5 million users and 175 countries, Coinstore provides a series of products, including spot trading, futures trading, Launchpad, earn, and wallet.

What is Levana？

Levana is a perpetual swap supporting high leverage and low fees on over 25 different markets, including cryptocurrencies, foreign exchange, and commodities. Levana is an acronym for “Leverage any Asset.” Levana Perps is currently deployed on three blockchains: Osmosis, Sei, and Injective. Peckshield audited Levana’s codebase. Levana is incubated by Delphi Labs, with key Investors such as Arrington XRP, Tribe Capital, Spartan Capital, Dragonfly, Coinfund, Parafi, and more.

Key features of the Levana Protocol

1. Collateralization model

One of the appealing features of Levana is its robust full collateralization model, a distinctive feature that helps traders maintain adequate collateral to cover their positions. This approach significantly mitigates the risk of defaults, fostering a stable trading environment. The emphasis on maintaining sufficient collateral contributes to the overall resilience and reliability of the Levana Protocol.

2. Low gas fee

Just like the parent, Injective Blockchain, another great feature of Levana is its low fee structure, positioning it as a competitive player in the market. Traders seeking cost-effective leverage trading solutions are drawn to Levana, appreciating the platform’s commitment to minimizing fees. This competitive fee structure enhances the attractiveness of the Levana Protocol within the broader DeFi landscape, attracting traders who prioritize cost efficiency in their trading strategies.

LVN Token

With a total supply of 1 billion tokens and an initial liquidity injection of 70 million, $LVN was launched in November 2023, and now, a little over 91 million is available. The token allocation is like below:

33% for contributor/investors;

30% for community;

20% for core team;

9% for foundation treasury

8% for advisors

The $LVN token serves as a governance token, facilitating the transition of the Levana Protocol into a genuinely decentralized protocol. Levana aims to adopt an economic model similar to dYdX and Kujira, distributing protocol fees to staked token holders and providing a sustainable source of passive income through staking.

Risk and challenge

In December 2023, Levana suffered a hack attack, resulting in a loss of over $1.1 million. The team’s post-incident report showed that from December 13th to December 26th, the attacker successfully extracted 10% of Levana’s liquidity pool; however, emergency response measures protected an estimated 90% of LP funds due to the protocols. Despite being described as one of the most sophisticated ever seen on Cosmos, Levana’s systems proved their robustness, safeguarding most users’ funds from potential drainage.

Furthermore, in response to the financial losses incurred by liquidity providers, Levana planned a twofold compensation approach. Affected parties will receive an airdrop and the distribution of collected protocol fees during the attack. This move demonstrates Levana’s commitment to its community and resolve to manage the aftermath of the exploit responsibly.

The Levana exploit on the Osmosis blockchain is a stark reminder of the ongoing security challenges in the DeFi space. As Levana navigates through this crisis, its response and measures for restitution highlight the importance of robust security protocols and swift, transparent action in the face of digital asset vulnerabilities.

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