The problem Limitless solves

There are currently no options for obtaining undercollateralized leverage and short exposure to small-cap crypto assets. DeFi suffers from extreme capital inefficiency for both users and liquidity providers, as liquidity is fragmented across the ecosystem in single-use pools (e.g., lending markets, trading markets, structured product vaults). This capital inefficiency results in passive liquidity providers being significantly undercompensated for the risk of impermanent loss.

Limitless addresses these issues by unifying liquidity and repurposing existing spot liquidity for multiple use cases. Future potential use cases include (i) DeFi and stablecoin insurance, (ii) leveraged/looped yields on yield-bearing pairs, (iii) structured products, and (iv) vanilla and perpetual option products. By integrating borrowing and trading markets into one, Limitless enhances capital efficiency and offers significantly higher yields for liquidity providers, thereby better compensating them for impermanent loss. The system is designed to be 100% solvent at all times, and liquidity providers are not directly exposed to trader counterparty risk. This solution will reduce liquidity fragmentation across DeFi, improve capital efficiency, and offer higher yields for liquidity providers.

Challenges we ran into

Fuzz testing and making sure the code works in all possible scenarios/sequences without bugs was challenging