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Liquidity Providing (PLP)

Overview

PLP is the liquidity provider token for Palmswap Exchange platform. It consists of an index of USDT assets that are used for leverage trading. PLP can be minted with USDT and burned back against USDT. The price for minting and re-burning is calculated based on (total worth of assets in index including profits and losses of open positions) / (PLP supply).
The vault serves as the counterparty to all trades made on the platform:
  • When traders win (positive PnL), their winnings are received from the vault.
  • When traders lose (negative PnL), their losses are sent to the vault.
Further, PLP owners earn:
  • 40% of trading fees in USDT.
  • Mint and Burn fees which are 0.3% in USDT.
  • Borrow fees paid hourly in USDT.
  • Liquidation penalty which is paid in USDT.
When PLP are bought they are minted, when they are sold they are burned. Basically, they present the share of liquidity in the liquidity pool.
$PLP Contract Address:

Minting (Buy) and Redeeming (Sell)

Minting PLP
  1. 1.
    Bridge USDT from any ecosystem to BNB Chain.
  2. 2.
    Ensure that you have some BNB for network fees.
  3. 3.
    Visit the "Buy PLP" Page.
  4. 4.
    Select Buy/Mint and enter the Amount you want to buy/mint.
After buying, your PLP will automatically be staked and you will start earning Trading fees in USDT, you can check your rewards at Earns page.
Redeeming PLP
To redeem PLP follow these steps
  1. 1.
    Visit the "Buy PLP" page
  2. 2.
    Select Sell/Redeem PLP and enter the Amount you want to sell
  3. 3.
    Now your tokens are unstaked and the cooldown period started
  4. 4.
    After 7 days you can sell your PLP and get USDT
To unstake PLP, you simply need to sell them. There is a cool-down period of 7 days to sell your PLP Tokens.
Compound Rewards
When you have earned rewards, you have the option to compound these rewards back into the pool. PLP tokens are bought with your rewards and reinvested into the PLP pool.
There is a Mint and Burn fee of 0.3% for PLP.

PLP Liquidity Pool

A portion of all protocol-generated fees including opening/closing positions, minting PLP, and excess Borrow Fees as well as any losses from traders' realized P&L and liquidations go towards the PLP vault causing its price to go up over time. Any profits from traders realized P&L are paid out from the PLP vault causing its price to decrease. Overall, it is expected and highly probable that the price of PLP will gradually increase over time as net inflow exceeds net outflow.
The PLP price is based on the number of USDT and PLP in the vault, at any time, where:
PLPprice=USDTvaultPLPsupplyPLP{price}=\frac{USDT_{vault}}{PLP_{supply}}
For example, let's say you mint 1000 PLP at a price of $1.00 by depositing 1000 USDT into the PLP Liquidity Pool. Over time, due to the net flow of USDT into the pool, let's say the price of PLP has gone up to $1.50. If redeeming your 1000 PLP (now worth 1500 USDT), you would have made a 50% return on your initial investment.