What is Platypus Finance?
Platypus Finance is a project on single-sided AMM (Automated Market Maker) protocol developed to create liquidity and trade stable coins of ERC-20 such as USDC, USDT, DAI on Avalanche ecosystem.
Features of Platypus Finance
-Shared Liquidity: With the first generation AMMs, the liquidity pools are often separate such as: USDT-DAI, USDC-DAI, etc. This causes liquidity fragmentation leading to slippage fluctuations. when one wants to trade at a pool that is not liquid enough.
With Platypus Finance, liquidity pools will be interconnected. This will reduce the price slide to as low as 0.01%.
-Flexible Pool Composition: Current StableSwaps only allow pools to have a few asset classes.
For example, Curve Finance's pool only includes USDC, USDT, DAI and requires a liquidity balance of each asset class (40 USDC-40 USDT-20 DAI). Since then, it will be difficult to add another asset with lower liquidity to the Pool.
To solve that problem, Platypus Finance introduced the concept of Coverage Ratio instead of Liquidity Balancer. The balance of assets on Platypus will be measured by the covarage rate, not the liquidity volume of that account, so the assets in the pool will be easier to change.
-Single-Sided Token: When users add liquidity with an asset class, they will receive the correct LP token representing that asset class. From there, users will no longer worry about the ratio of assets in the liquidity pool.
Example: With a traditional AMM, when A deposits 100USDC into a USDC-DAI pool and receives 100 USDC-DAI LP tokens in exchange, it will get 80 USDC and 10 DAI. But after a while, the ratio of assets in the pool changed and A exchanged 100 LP tokens and received 60 USDC and 15DAI in return. As for Platypus Finance, when A deposits 100 USDC into the USDC-DAI pool, A will receive 100 USDC LP tokens and these 100 LP tokens can be exchanged for 100 USDC at any time.
That will create the advantages of Platypus Finance:
-Low Slippage: With single-sided mechanism and open liquidity pool, Platypus Finance will create a larger liquidity pool than other AMMs, so slippage will be lower.
-Higher Scalability: With the mechanism to regulate Coverage Ratio for each asset class in the pool, more assets will be added to the pool.
-User Experience: Users can now add and withdraw liquidity with an asset class without worrying about rate changes in the liquidity pool.
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