AscendFi Mechanism
Last updated
Last updated
In traditional AMM (Automated Market Maker) mechanisms, liquidity providers can only passively supply liquidity and earn minimal returns from transactions. However, they are also exposed to the risk of impermanent loss, which often prevents them from maximizing profits and can even result in losses. In this mechanism, there is no connection or consensus among liquidity providers, and no sense of shared belief or relationship between participants.
Currently, the DeFi space lacks a mechanism that effectively fosters community cohesion and drives the wealth effect, which reduces the willingness of individuals to provide liquidity.
Building on the traditional AMM mechanism, we introduced changes to the model of holding LP tokens without requiring platform tokens, along with a sustained deflationary mechanism. This incentivizes users to collectively build the liquidity pool, effectively increasing its size while avoiding the "death spiral" caused by token sell-offs. This approach fosters stronger consensus and successfully leverages invested funds to unlock more opportunities during the launchpad phase.
If users need to exit midway, they simply need to sell their LP tokens. The mechanism will calculate and return the corresponding assets to the user's address.
