Protocol Owned Liquidity!
The future of DeFi lies in protocol shall owning their own liquidity. Instead of incentivizing farm and dump strategies, we use the farming rewards to essentially purchase liquidity back in return for bonds, in which the users acquire discount $THOR.
We are accepting 3 bonds for Olympus Pro:
- 1.THOR-ETH SLP
- 3.RUNE-ETH SLP
“Bonding is a mechanism in which a user can sell assets to a protocol in exchange for its native token” — OHM
Olympus Pro allows users to acquire $THOR at discounted rates by bonding either their LP tokens and ETH.RUNE.
OHM Pro allows THORSwap to accumulate its own liquidity via bonds. Users provide THOR-ETH SLP, ETH.RUNE and RUNE-ETH SLP to acquire discounted THOR via bonds which will be vested linearly over 5 days. This incentivizes users to sell to THORSwap, rather than to the open market as bonds are offered at a discounted rate, and with the linear vesting it prevents users selling all the discounted tokens at once for a quick flip.
Olympus Bond Service Fee
Bond fee of 3.3% is paid by THORSwap per each bond to Olympus DAO in governance token ($THOR) for liquidity bonds and the payout token ETH.RUNE for single reserve bonds.
- 1.THOR-ETH SLP
The liquidity of the THOR-ETH SLP is shallow in comparison to the THOR-RUNE pool. This means price fluctuations are exacerbated on the THOR-ETH pool; buy and sell pressure leads to large fluctuations in price as the pool is shallow. This then leads to arbitrageurs using this shallow depth to arbitrage between the THOR-RUNE pool. By accepting THOR-ETH SLP, we as a protocol can thus deepen the liquidity of the pool and start stabilizing these fluctuations. By providing a buffer of locked liquidity this protects token holders and ensures exit liquidity in our trading pools. This is essentially being a market maker where individuals manage liquidity to reduce the impact of market fluctuations.
We have HUGE utility for this. And thus cannot disclose anymore, but all you need to know is that this is game changing.
3. RUNE-ETH SLP
There is still over 2M in 24 Hour volume on the RUNE-ETH liquidity pools. Again, we have huge plans for this which we cannot disclose but the main potential is to bring back utility to $THOR holders.
- 1.This significantly bootstraps liquidity in our trading pools. Currently, THORSwap incentivizes LP’ers via high APYs which in the short term is key to bootstrapping liquidity but in the long term this is not sustainable as it leads to farm and dump strategies. Olympus Pro bond program is the key to longevity, this method allows users to purchase discounted $THOR via temporarily providing liquidity in which we gradually acquire via vesting, this will attract capital that is aligned with long term success of THORSwap.
- 2.We acquire ETH.RUNE which will accelerate the retirement of ETH.RUNE but can also be used for multiple purposes and bringing additional utility back to THORSwap.
- 3.Fees from our POL (protocol owned liquidity) bring a constant source of revenue to THORSwap but also more potential value accrual to THOR holders and will be an alternative revenue generation to facilitate sustainable APY’s.
- 4.We can utilize revenue generated by the protocol-owned liquidity to sustain and fund THORSwap operations, marketing and more.
- 5.Additional yield farming opportunities especially if we list on the Onsen Program then our POL can earn additional rewards such as Sushi tokens.
- 6.THORChads mitigate impermanent Loss on ETH pools, as we all know THORChain offers IL Protection ;). Long term holders are not incentivized to provide liquidity, but are incentivized to purchase bonds. This shifts IL to the protocol which is beneficial to all players.
- 7.Liquidity Buffer instills confidence in users seeking available liquidity. Liquidity will permanently reside within the protocols allowing users to have ample liquidity for trading
- 8.Opportunities to buy THOR at a discount. Long term holders acquire discounted $THOR whilst THORSwap acquires liquidity, it is a win-win.
- 9.Exit liquidity, having POL ensures there will always be efficient liquidity in the pool for users to trade in. Thus reduces a bank run job where users scramble to remove liquidity due to farming reductions and thus less liquidity causes price to crash as shown below:
This is amazing news THORChads, let us celebrate with (🔱,🔱)