Platypus Finance is an AMM or automated market maker that’s single-sided and designed to optimize efficiency for stablecoins built on the Avalanche network.
In the past year, a major point of interest in the crypto segment has been decentralized finance or DeFi. The winner of an Avalanche X grant, platypus finance aims to become the most capital-efficient, user-friendly, and scalable StableSwap platform ever built to this end.
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What is Platypus Finance?
Platypus Finance is an AMM or automated market maker that’s single-sided and designed to optimize efficiency for stablecoins built on the Avalanche network. Liquidity providers make provisions through a single token type rather than token pairs to mitigate impermanent loss risk.
The mechanism also creates capital efficiency throughout the ecosystem, reduces slippage for traders, and improves the existing AMM framework. Platypus finance’s guiding principle is one of asset liability management that guarantees exact principal amount returns for withdrawals by liquidity providers.
Keep reading to learn how this decentralized exchange, or DEX, is revolutionizing market-making protocols that lay the groundwork for the future of the finance sector.
The Innovative StableSwap Features of Platypus Finance
DeFi products leave plenty of development and growth space for the benefit of users, as does any new technology. Within the avalanche ecosystem, there needs to be a dominant StableSwap, which, although exploding, doesn’t have deep liquidity.
Based on the veCRV setup of Curve, platypus finance has implemented a one-sided, open StableSwap with essential features like scalability, better user experience, and less slippage. It aspires to be the VAX technology’s standard platform, intending to provide merchants with excellent performing DeFi protocol in the crypto sphere.
Instead of using sets or pairs of tokens for liability or asset registration, users get token accounts to provide one-sided liquidity. But Platypus removes the restraints of liquidity equilibrium by using coverage ratio as the AMM input parameter. That’s unlike Curve’s StableSwap invariant, which allows organic evolution of the token depending on inherent supply and demand.
Platypus’ design allows new tokens to be added to the existing pool to increase capital efficacy and protocol scalability. It facilitates shared liquidity in a concept known as Open Liquidity Pool, which showcases its unique value proposition.
What Has Platypus Finance Improved on Older StableSwap Protocols?
One of the challenges of older StableSwap protocols is that liquidity isn’t shared between separate asset pools, leading to fragmentation. That’s because they operate on a closed liquidity pool model, and slippage price is calculated by accounting for the invariant of a specific pool.
Platypus Finance allows all asset pools to share token liquidity, effectively lowering slippage and increasing liquidity depth. Traditional StableSwaps also made integrating new assets challenging and even difficult, and tokens abide by strict equilibrium mechanisms.
For a user to complete a swap, all the pool assets must have the same amount of liquidity, but the innovation in Platypus has yet to be explored by other AMMs. The protocol’s unique take on liability redefines equilibrium and is based on coverage ratio, not liquidity, as a low friction asset exchange.
Unilateral liquidity provision is essential to the long-term evolution of dApps and the entire avalanche ecosystem. It helps to enrich the DeFi 2.0 narrative and offers key benefits like a better UX experience, intuitive technology, and the groundbreaking liquidity pool design for StableSwap scalability.
Tokenomics and Mechanism Design of Platypus Finance
One of Platypus’ native tokens is $PTP, a utility and governance token earned by providing liquidity and is staked to boost provider rewards. Another is $vePTP, a reward-boosting token earned by staking $PTP on which the investor earns more $vePTP and vice versa.
There’s a total supply of $300 million $PTP, mined in various methods, such as when you provide liquidity to Platypus’ base pools. The booting pool also offers additional rewards when the token is staked, incentivizing secondary market activity to encourage long-term staking.
Like $veCRV, Curve’s voting escrow token, the boosting pool utilizes $vePTP, which cannot be traded or transferred. One $PTP staked will generate $0.014 $vePTP hourly, but accompanying rewards fall to zero if you’ve un-staked your $PTP.
This mechanism aims to mitigate liquidity pool volatility while incentivizing long-term staking, as you’ll consider the opportunity cost of un-staking $PTP. That’s because you’ll forfeit any $vePTP accumulated from liquidity provision.
Unique Swapping Selling Point of Platypus Finance
The StableSwap protocol on Platypus reduces slippage for significant value exchanges without compromising stability or flexibility. Its ecosystem currently supports dollar-pegged stablecoins like USDT.e, USDC.e MIM and DAI.e.
Its layer one Blockchain, AVAX or avalanche, is easy for developers to build dApps and impresses with aspects aligning with Platypus’s core vision. The low-cost, eco-friendly, fast ecosystem constitutes the stable and scalable leverage of the StableSwap platform’s primary deliverables.
Cross Asset Swapping
When trading on Platypus Finance, remember that you need the native AVAX token for transactions such as gas fees, charged at 0.04% for liquidity provision. Depending on the pool coverage rate, the platform will charge you deposit and withdrawal fees, and you can’t trade tokens that aren’t listed.
Importing Platypus’ contract addresses is also not currently supported, and some tokens might get unlinked for unforeseen reasons despite the indexed exchange rates. If a significant deviation is detected, Platypus will stop trading as it uses a reliable price oracle like Chainlink to track real-time data feeds.
Blockchain industry experts build Platypus with years of hands-on experience to improve existing innovation to some of DeFi’s most poignant issues. Due to an ergonomically designed interface, you can complete cross-asset exchange in a few steps, including;
- Choosing the asset pair to trade from the Swap mode’s drop-down menu and entering input and output amounts
- Select Approve to start the swap, and then check the details before clicking the Exchange button
- From the pop-up window that appears, confirm the details and click on Confirm Exchange.
- A settlement period of one second or less ensues once you’ve made the confirmation, and you shouldn’t navigate from the page during this session.
- Use the View in the FUJI C-Chain explorer function to check your transaction details.
How Do You Provide Liquidity on Platypus Finance?
The Platypus Finance pool provides one currency type and one-way liquidity, and it’s made scalable and flexible by the need not to create token pairs. In the user cauldron, you’ll see that the stablecoin pool currently contains four tokens. You can farm the $PTP governance token when you store liquidity.
For each asset exchange, you’ll share the 0.04% transaction fee earned, and you can deposit or withdraw tokens on one side in bulk, unlike traditional liquidity pools. That means your actions won’t affect the pool’s size or composition.
To withdraw liquidity tokens from the pool, select withdraw under the Pool tab in the corresponding column. Enter the amount of liquidity you want to withdraw from the pool and select Approve Withdrawal before clicking on the Withdraw button.
Confirm the transaction through a Metamask interface, and you can view the completed transaction details using the FUJI C-Chain explorer. Remember that some assets may experience under-hedging once you’ve withdrawn your liquidity provision, which results in partial liquidation. The response from the Platypus DEX may include the following;
- Advising a liquidity provider to withdraw at most what cash is on the system or to wait until the coverage ratio returns to balance before withdrawing
- Allow liquidity providers to withdraw other assets over-covered from the pool.
Platypus finance is a young project that’s enjoying enthusiastic attention from an expanding DEX community and, as such, is seamlessly growing. You’ll find a wide user base on social media platforms like discord, Twitter, and Telegram with active engagement that’s extra present.
It’s an initiative addressing the shortcomings of StableSwaps, including slippage and costs, setting aside adequate liquidity for future potentials. Through regular updates, competitions, and project development, platypus finance is cementing its identity within the crypto space and grooming its community by maintaining ever-active interest.