On May 31st, the brand new naughty price protection will live with the Initial Matching(IM) mechanism! The initial price is hard to determine in the traditional AMM pool, but on degis, they will solve this problem by adopting the initial matching mechanism.
What is the Initial Matching(IM)?
Under the IM mechanism, there will be an additional 1-day period before trading called the deposit period. During this period, liquidity providers can freely deposit or withdraw stable coins into the pool by setting the expected price for the protection token. By adopting this mechanism, the initial price of the AMM trading pool is 100% determined by liquidity providers. The finial ratio will be set according to the deposit proportion in both side of the pool when deposit period ends.
After the deposit period, the pool will be settled at the final price. Then, all the stable coins on the protection side will be used to create protection tokens, which will be used to initially set the AMM pool with the left stable coins.
Early Bird DEG Rewards
During the deposit period, early liquidity providers can get $DEG tokens from the one who joins later. The $DEG amount to be paid to the early LPs is 1% of the total amount of stable coins to deposit. The paid $DEG will be shared by the earlier liquidity providers according to their proportions in the pool. The earlier users provide liquidity, the more rewards they will receive.
1.2x Mining Rate
As the initial liquidity providers , they will receive initial LP tokens according to their deposit amount after the deposit period. These tokens can be used to mine in the initial LP mining pool, where will have a 1.2x higher mining rate than the normal mining pool.
But remind that, once you withdraw the liquidity from the initial LP pool, your initial LP token will be burned. Even if you rejoin later, you can only mine in the normal LP pool.
Why Initial Matching?
More tokens will be added to the degis naughty price protection very soon, the Initial Matching will also used to determine the mining rewards for each pool. At the same time, IM is the mechanism that they specially designed to reward the most loyal liquidity providers of the protocol.
IM Public Testnet
Starting from May 17th, Degis will host a public testnet on Avalanche Fuji Testnet for the initial matching. More details and the rewards plan will be announced next week! Stay tuned!