Multiple Protocol is Decentralizing Money Market Funds | Bitcoinist.com
As the blockchain and cryptocurrency industry grows, more and more traditional finance instruments are adopted. Decentralized finance or DeFi offers standard financial tools while still working with no intermediaries and functioning on blockchain smart contracts.
Multiple Finance is a DeFi protocol based on Ethereum that facilitates professional automated market maker (AMM) liquidity strategies for expert traders (General Partners). These strategies ensure users (LP) securely benefit from the best yielding products.
On top of bringing financial tools to the blockchain space, Multiple Protocol is an AMM. Their AMM has key attributes that assist in portfolio risk control and investment return maximization.
Traditional money market fund portfolio managers will charge investors a service fee to cover portfolio rebalancing costs; however, the portfolios are managed through centralized means, leading to underlying custodial risk.
Multiple Protocol takes the traditional concept of money market funds and evolves it. Instead of paying investment managers to re-balance your portfolio, its platform pairs users to traders (GPs) directly through smart contracts, giving users the skills and liquidity strategies to maximize investment. Also, the platform’s strategy monitoring protocol ensures the security of the funds.
The primary mission of Multiple Protocol is to concentrate liquidity for small-volume LPs and enjoy ROI that large holders achieve.
What is a Multiple Protocol GP Graph?
LPs are participants that provide funds to Multiple in exchange for LP tokens. GPs are investment managers that provide the best investment strategies possible to LPs and earn a share of the profits as a result.
A GP graph allows GPs to parse through data and come up with the best possible strategies that LPs can benefit from. This creates a partnership model between LPs and GPs that ensures all parties benefit from the success of high-performing, yield baring DeFi products. Multiple.Fi’s GP graph is one of the best tools in V3.
Multiple Protocol’s Uniswap v3 Features
Multiple Protocol’s platform has Uniswap v3 heavily incorporated, bringing the numerous benefits attached to the AMM in the process.
Uniswap is an AMM and exchange where anyone can pool assets into shared market-making strategies. Uniswap serves as critical infrastructure for DeFi, assisting developers, traders, and liquidity providers so they can more confidently partake in a secure and robust financial marketplace.
With its newest incarnation, Uniswap v3 introduces:
- Concentrated liquidity gives individual LPs granular control over what price ranges their capital is allocated to.
- Multiple fee tiers allow LPs to be compensated based on the degrees of risk they take.
- LPs can provide liquidity with up to 4,000x capital efficiency, earning higher returns on their capital in the process.
- Capital efficiency enables low-slippage trade, surpassing both centralized exchanges and stablecoin-focused AMMs.
- LPs can increase their exposure to preferred assets and reduce their downside risk.
- LPs can trade assets by adding liquidity to a price range either above or below the market price.
LPs and GPs
Multiple Protocol adopts the fund manager model, categorizing users of the platform into two roles: LP and GP. LPs are fund providers, and GPs are investment managers.
LPs provide funds, and then the platform issues LP Tokens as investment certificates that can be either staked to obtain yield or transferred to avoid misappropriation of the fund pool. Also, LPs that provide funds for an extended period will receive incentives like platform tokens and shares in the platform tokens’ profits.
GPs are expert traders that provide LPs with liquidity strategies to maximize investment. To become a GP, you use Multi Protocol’s portal to go through the process. You will have a unique NFT assigned to you, which will grow with you, record your joining time and total return rate.
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