ACY is the First AMM DEX that Gets Protocol Owned Liquidity
This liquidity mining model can be a double-edged sword. Although liquidity mining can help bootstrap protocols in the early stages of community building and user acquisition, the downside was apparent. As the compensation for liquidity supply is continuously released, there exists a selling pressure, making the model not sustainable in the long term.
To compensate for liquidity mining, DeFi services attracted users with high APY, and the high inflation of circulating tokens eventually resulted in a drop in token prices.
So far, the existing DeFi projects were not too different from traditional financial services such as swaps, farms, collateral loans, and leverage. And they used liquidity mining and gave high APY to attract users. However, it failed to serve as a long-term operable model.
In DeFi 2.0, ACY Finance is trying to build long-term pools of ‘Protocol Owned Liquidity’. In the existing DeFi, such as Uniswap and Sushi, liquidity is supplied by users and subject to the users and the liquidity providers can stop supplying liquidity at any time. However, in ACY Finance, part of the Liquidity will exist for a long long time even forever. The protocol itself can take part in liquidity and control.
The key to this solution is the Flash Arbitrage Revenue. 20% of this revenue will turn into Protocol Owned Liquidity (POL) for long. As the transaction volume in ACY Protocol goes larger and larger, the POL will account for a certain proportion in the whole liquidity including the pools that the users add in.
In addition, the protocol itself, not the users, owns the LP tokens, thereby generating transaction fees from the liquidity pool and at the same time preventing immediate selling pressure from liquidity providers.
Matrix Interpretation
3 Points: Protocol Owned Liquidity
2 Points: Staking Liquidity
1 Point: Bonding Liquidity
0 Point: Add Liquidity
-3 Points: Withdraw Liquidity
[3,3] is the strongest status.
[-3,-3] is the weakest status.
