To outline our further steps in transformation of seigniorage protocol to seigniorage ecosystem, because the demand is getting higher and higher, it’s time to reveal further steps:
LUNA – LUNAtics – show us that if we come out with concept that is interesting for holders, they do not hesitate bridging their assets (in LUNA/LUNAR pool we have already almost $3 mil – almost everything was bridged via allbridge). That proves that it is possible bring enough liquidity to AURORA from other chains. And as u might know, that this is the priority for us from the very beginning.
In classic seniorage algocoin concept protocols create one pool with one pegged asset and native coin and with solid tokenomics they can create nice buy pressure of a native asset while compounding. Win-win situation for defi protocol as well as for native asset. BUT You all do know what happens when peg is lost… You also do know that with multipeg we are defending the value of SPOLAR differently -> more pools -> more printing -> nonstop utility. That implicates high demand of our shares governance token.
However as many times said, this is just a beginning. We are transferring classic seigniorage protocol, to seigniorage liquidity provider on the top of the DEX. What that means? You know that we need DeFi for decentralization, we need pools, we need liquidity in pools and providers of liquidity have to be rewarded.
Even the biggest dexes have issues with inflation of reward tokens, investors are running with funds from pools because of low inflationary rewards and high impermanent loss.
Let me introduce how our multipeg concept will help to solve this. With our pegged assets we are going to create smart routing with high liquidity on Trisolaris DEX to make swapping easy with low price impact, to convince investors, that the best place for their assets is on Aurora. Forget CEXes, let’s focus on decentralization.
As we several times told you, there is no difference whether SPOLAR is minted in one LP or in 20. The only important thing is high demand, big TVL and constant utility for SPOLAR. Those 3 factors are putting big buy pressure on SPOLAR and keeps pushing its price up.
Our first step for smart routing with our pegged assets is, that we are creating new pool POLAR/LUNAR that will reward investors with SPOLAR as well as other LPs. This pool will help investors to easily swap their LUNA or LUNAR to any other asset. Both POLAR & LUNAR are pegged assets of strong big coins so the impermanent loss shouldn’t be that high and, of course, you will get SPOLAR as a reward for providing liquidity..
Let me show you one example. Let’s say you are only in LUNA/LUNAR LP and you have 162 LUNA or equally 100 LUNAR, let’s say you are for some reason bullish on NEAR and want to participate in POLAR/NEAR LP as well. 50 LUNARS for NEAR and 81 LUNA for POLAR. While swapping this You will get more than 5% of price impact and horrible exchange rate because of low liquidity in NEAR/atLUNA pool. Our pool LUNAR/POLAR will create route atLUNA -> LUNAR -> POLAR -> NEAR so you are gonna be able to easily swap for different tokens or stables with very low price impact. Same principle applies on any other token that don’t have liquidity on AURORA.
Simply said: We won’t be limited by liquidity in pools on dexes. Pool is going to be live tomorrow. Happy farming. We are aware of that this might push peg even higher, but the smart routing via algocoins could help the decentralization itself.