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Platypus Finance: All You Need to Know

platypus finance logo over green image of platypus
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Your ultimate guide to Platypus Finance

A single-sided Automatic Market Maker (AMM) for stablecoins, Platypus Finance was created on the Avalanche Network, which was designed to enhance capital efficiency.

Instead of mandating liquidity providers (LPs) to offer liquidity by pairing tokens (e.g., ETH-AVAX), LPs have the option to provide liquidity by offering a single type of token.

This mechanism was introduced as a way for LPs to offer liquidity with a single token type instead of the traditional pair tokens, ultimately reducing the impermanent loss for LPs while also increasing trading efficiency. Platypus works on the principle of asset liability, which is where LPs always receive the same amount and type of token that was deposited by them originally, along with any rewards they earned whenever they choose to withdraw from the liquidity pool.

In many existing AMMs, there are several design flaws when it comes to things like impermanent loss risk, capital inefficiencies, and UX fragmentation. Platypus Finance was made to overcome these problems and work by enhancing the process on current frameworks. Platypus Finance has developed a single-sided liquidity provision mechanism called StableSwap.

StableSwap

StableSwap is a smart way of exchanging cryptocurrencies, allowing for smoother transactions, better user experience, and improved scalability. Unlike other exchange platforms, StableSwap doesn't require specific pairs of tokens for trading. This means users can trade any token for any other token, making it more flexible and accessible.

At the heart of StableSwap's design is the principle of asset liability management (ALM). This means that deposits made by LPs are recorded as a liability for the platform. LPs receive LP tokens representing the exact amount and type of token they deposited into the liquidity pool.

This ensures that when LPs withdraw their tokens, they receive precisely the same amount of tokens they deposited, along with any rewards earned.

ALM also enables each token to grow naturally based on its demand and supply, unlike most other AMMs that require all tokens to have the same level of liquidity, which can hinder the growth of less popular tokens.

This design gives StableSwap a reliable metric for tracking its financial health, lending out idle assets, and eliminating impermanent loss. Overall, StableSwap provides a more reliable, efficient, and user-friendly way of exchanging cryptocurrencies.

Platypus Finance functions and pricing 

The core function of the Platypus protocol is StableSwap. This system is designed to facilitate the exchange of stablecoins pegged to the US dollar, enabling users to swap tokens easily and with minimal barriers. It aims to reduce the impact of high-value trades by minimizing friction and lowering slippage during the exchange process. Each StableSwap transaction requires a 0.01% liquidity provision fee and $AVAX for gas fees.

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Platypus Finance price

platypus finance to GBP chart

Currently, Platypus sits at £0.06 with a market cap of £2,550,619. PTP is on an upward trend after a drop at the end of March. It has a circulating supply of 41,436,585 and a fully diluted market cap of £18,467,806.

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tripti sarda

Author: Tripti Sarda

Spirituality, cats, and a love for pop culture. You will always find me talking about the mountains.

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