Liquidity pool

The universal liquidity pool holds a portfolio of assets, and each asset has a targeted weight in the pool. Pooled assets will be utilized for perpetual trading and third-party DEX mining to earn fees.

Users can provide liquidity by buying TLP with assets allowed by the portfolio. TLP tokens are minted when buy orders are filled and burnt when sold. The TLP token price is calculated by dividing the TLP pool value by the total TLP supply. After buying TLP tokens, users can stake the tokens to earn protocol income and TRY rewards.

Buy / Sell TLP

Users can buy TLP tokens on all deployed networks with assets allowed by the portfolio.

After placing a buy or sell TLP order, it may take an extended pending time. The order will be filled with the price at the order submission time.

The pending time serves two purposes:

• Prevent potential arbitraging that can harm LP

  • Since the TLP pool holds a portfolio of assets and allows users to buy TLP with any supported assets, there is potential arbitrage room if front-runners execute quick buy and sell orders with different assets. The pending time can help to eliminate this room for arbitrage.

• Ensure the protocol can correctly calculate the universal liquidity across two networks

  • Tradeify needs to consider different network latency and finalization times when calculating the universal liquidity; the pending time helps ensure correct calculation and proper token allocation for TLP buyers and sellers.

TLP Staking

After buying TLP tokens, users can stake them to earn protocol income(fees and external mining yield) and TRY rewards. Please check the earning section for detailed rewards distribution formulas.

TLP Pool Portfolio

The TLP pool holds a portfolio of blue-chip assets and stablecoins, each having a targeted weight in the pool. When the asset weight moves above or below its target, the fees for buying or selling TLP with this asset will adjust accordingly.

• If the weight is below target, buying TLP with this asset requires lower fees; selling TLP into this asset requires higher fees.

• If the weight is above target, buying TLP with this asset requires higher fees; selling TLP into this asset requires lower fees.

TLP Profits & Risks

TLP Profits Sources:

• A portion of the protocol fees

• Funding payments

• Multiplexed third-party DEX mining income

• Liquidation penalties

• TRY token rewards

TLP Risks

• Since the TLP pool is the counterparty of traders, TLP has positions holding related risks and can suffer losses

• Pooled assets price drawback

Protocol-Owned Liquidity (POL)

Sufficient liquidity is crucial for trading protocols, as deeper pools can support higher open interest. However, acquiring and maintaining liquidity can be costly and unstable if solely reliant on liquidity providers (LP). Therefore, instead of “renting” all liquidity from external sources, the tradeify implements the POL mechanism to become gradually self-sufficient.

The TLP pool consists of liquidity from two sources, LP and POL. Upon genesis, the protocol purchased TLP tokens with funds raised from previous rounds; also, 20% of protocol income will go to POL. POL is the base of the TLP pool and will grow sustainably with cumulative trading volume. The proportion of POL in the total liquidity is protocol owned ratio (POR.) Furthermore, if someday the POL is sufficient enough, the proportion of the income distributed to the LP might be reduced.