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Leveling Up Tezos DeFi: Wrap Protocol and Plenty are merging!

TL;DR

Tezsure and Bender Labs decided to merge their protocols in an effort to realize an all-in-one DeFi experience on the Tezos blockchain. Tezsure is the team of engineers behind Plenty and Bender Labs is well-known for building the first bridge from Ethereum to Tezos through Wrap Protocol.

We believe that merging the technology and liquidity of Wrap and Plenty will allow the team to create a complete DeFi experience on Tezos. A single platform for bridging, trading, and earning. This merger is a great opportunity for new and improved tokenomics, with a new token called PLY, which is currently in development. WRAP and PLENTY holders will be eligible to swap their tokens for the new token PLY.

The merger of Wrap Protocol with Plenty’s Automated Market Maker (AMM) and the upcoming roadmap (which contains flat curves, bridges, and features of checker) are the perfect ingredients to foster one of the most advanced and complete DeFi protocols on Tezos, bringing unparalleled value to token holders and the Tezos ecosystem!

Merging with Wrap Protocol

We’ve always been close friends with the Bender Labs team and have had successes together in developing Tezos DeFi solutions like ctez. We have discussed the possibility of merging our protocols for the benefit of our communities and DeFi on Tezos, and are excited to share the first details!

What will happen to the current Wrap protocol?

Relaunch timeline

Many exciting new features for the Plenty Network are currently in development and will launch as soon as possible after thorough security checks including audits. After the relaunch, PLY governance participants will be able to use on-chain governance to decide on the long-term vision of Plenty. The merger of both communities, tokens, and liquidity will happen in phases to assure a smooth transition.

Phase 1

Phase 2

Phase 3

Phase 4

Rethinking Plenty: The Plenty Network

DeFi on Tezos has seen enormous growth since April 2021. The launch of Wrap Protocol kickstarted the growth in Tezos liquidity, and with the launch of Plenty DeFi in May 2021 this growth accelerated exponentially. Tezos DeFi reached its Total Value Locked (TVL) peak of more than 200 million USD in the Autumn of 2021.

Reflection

Initially Plenty launched as a yield farm experiment. The goal was to find out if it was possible to attract liquidity from Ethereum to Tezos with the help of Wrap Protocol: the bridge from Ethereum to Tezos. This experiment was an amazing success.

Ever since, the scale of the project increased significantly while the tokenomics of the governance token stayed behind. This merger offers the opportunity to rethink and redesign the tokenomics of Plenty according to the newest DeFi standards, and allows us to continue our mission with an improved and future-proof governance token.

We thoroughly reflected all major developments of the past year, and realized that our communication did not always match our idealism and vision. We have recalibrated our vision and specified the purpose that we want to communicate, now that decentralized finance on Tezos is starting to form and continues to develop at a rapid pace.

The vision

Plenty is scaling decentralized finance on Tezos by building an all-in-one DeFi platform for bridging, trading, earning, and lending & borrowing, governed by the community.

By combining bridges, AMMs, Arthur’s flat curve, ctez, and features of checker, we believe Plenty is on route to becoming one of the most complete DeFi protocols on Tezos.

We view Plenty and Tezos as long-term projects — where a solid technical foundation and a strong community are key to winning the marathon race to global adoption.

Embracing ctez

The concept of delegation on Tezos can render certain smart-contracts tricky, especially when assets from multiple participants are pooled together. A wrapped version of tez is useful in those situations, if we can achieve the following properties:

It’s fairly easy to satisfy two out of three constraints. If we do not care about missing out on delegation, a simple contract that wraps tez and does not delegate the tez it holds will do the job. If we do not care about fungibility, we can let everyone create their own wrapped token backed by funds they delegated. Lastly, if we do not care about decentralization or trustlessness, we could leave the decision of where to delegate pooled funds to some third party.

Ctez can achieve all three properties with a bit of mathematics!

To improve the onboarding of users to ctez a flat curve XTZ-ctez AMM will be introduced on Plenty. At equilibrium, 78% of the pool can be bought for a slippage of less than 5%! The smart contract is live on testnet and is undergoing an audit before deploying on mainnet. Play around with the flat curve on testnet, after minting some testnet ctez and receiving testnet tez.

A new token: PLY

More details about token distribution will follow soon. Let’s focus on what this new token means for WRAP and PLENTY holders in the first place.

Merging Wrap Protocol with Plenty DeFi means merging their value.

To this end, we’re excited to be merging the value WRAP and PLENTY into PLY!

The WRAP and the PLENTY token will be merged into the PLY token to unlock the value of the combined protocols. PLY token holders will be able to benefit from the success of bridging, swapping, and earning through the new protocol, and participate in governance through PLY.

Aligning all stakeholders

The genesis supply will be allocated to PLENTY and WRAP holders. To ensure Plenty’s longevity, newly minted tokens will be allocated to multiple different stakeholders. There will be allocations for community incentives, a DAO treasury, developer team, and strategic investors.

Roadmap

New features are in development and launch as soon as safely possible, after following thorough security procedures, including audits. We are working on:

Improving Upgradability and Governance

Almost every element of the new Plenty protocol is intended to be upgraded to value Plenty as one of the most innovative DeFi platforms on Tezos.

Stakeholders will be able to vote and play a role in the implementation of new features. Governance allows fine-tuning of existing parameters, such as liquidity mining incentives, which can be adapted weekly by integrating voting with vote-escrowed PLY (vePLY). If you are not familiar with this vote-escrowed terminology, you can read more about it here.

Governance will have the opportunity to shape the direction of the protocol. As new innovations come to the platform, some of which are already in an advanced stage of development, the tokenomics of the Plenty network can be adjusted. Our community plays an unmistakable and vital role in this process!

Of note, for a successful launch of the new platform, the community needs to be seeded with the initial distribution schema and token model. This will be open to feedback in an effort to align our stakeholders to the strategic direction of the protocol. In the next Medium article, we will present the initial distribution schema and token model for the new PLY token to be distributed to PLENTY and WRAP holders. Stay tuned!

Developing an Ecosystem

By organizing the biggest Tezos DeFi hackathon to date, we made the first steps towards building a broader ecosystem around Plenty. More is coming!

We will enable developers to build on top of Plenty by introducing a permissionless design (with a factory contract), open sourced smart contracts, and an SDK.

A Grants Program can support independent builders and contributors with resources to experiment with. Providing both funding and feedback, the goal is to cultivate talent that enriches the Plenty ecosystem and pushes Plenty and Tezos towards a path of sustainable and community-driven growth and development.

Note: This Medium post outlines the vision of what Tezsure believes Plenty could be and evolve into. It should not be seen as a promise or a guarantee of features, a roadmap, or a timeline. Please feel free to follow the development progress here and stay tuned for more updates on Twitter or Discord.

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