Oct 31, 2021
Deliq : Enabling Protocol Owned Liquidity.
Deliq introduces a novel Liquidity-by-Staking(LBS) model to enable protocols direct liquidity as they need!
🤔Why do we need Deliq ?
Tokenization of assets has given rise to completely new financial implementations.
The Decentralized Finance protocols are powered by native tokens , these tokens are traded among users , borrowed , staked and collateralized for yields. This token intensive decentralized world comes to a halt if sufficient liquidity is not available.
Liquidity is a key piece of the decentralized infrastructure to support the upcoming novel DeFi platforms . So currently what solutions are available and why they cannot be part of future of DeFi ❓
Let’s take a deep dive in :
⛏️ Liquidity Mining : Liquidity Mining promotes misaligned incentives that promote selling pressure onto the protocol token and introduces inflationary tokenomics.
💰 Centralized market makers : Capital inefficient solution that introduces legalities and other centralizes resources like trading strategies and expertise .
⌚️ Liquidity Mining call options : LM call options just postpone the inevitable side effects of Liquidity Mining bcoz seller will dump the token at the first chance they get i.e call option expiry .
Introducing….
🌊Liquidity by Staking model of Deliq :
Protocol treasuries are increasing in value by the day , Deliq enables these protocols to own their liquidity by staking the DLQ token into the asset pools and direct liquidity to desired exchanges . Instead of wasting the resources for free , protocols can generate a new revenue stream for themselves as well as get access to sustainable liquidity.
💡How do protocols benefit from LBS model :
- Long term liquidity as opposed to temporary and fragmented liquidity.
- Capital efficient.
- Generate a new revenue stream for DAOs in the form of Liquidity Director fees.
- Easy Plug n Play Liquidity.
- Direct liquidity to the destination protocol needs as opposed to non evenly distributed liquidity.
- Use the DAO treasury more efficiently for improvement of the core product as opposed to wasting it on liquidity mining rewards.
🦧Benefits of LBS to Liquidity Providers :
- Single sided asset provisioning
- Impermanent loss mitigation using Protocol Controlled Assets.
- Asset doesn’t lose value over time due to mercenary dumping.
As time passes LM incentives will decrease for all DeFi protocols , instead of relying on hypothetical short term price increase DeFi needs a long term decentralized , transparent like Deliq.
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