The development team of YF Link has introduced its first production-ready service, LINKSWAP. A community-run and governed AMM, whose primary function will be to bring more trading pairs and liquidity to LINK hodlers and the DeFi Community associated with YF Link. Specifically, the LINK Marines, who have been associated with the project will receive a better yield and staking opportunities with strengthened securitization and better value capture.
The recent progression of DeFi communities all across the cryptocurrency ecosystem scores higher returns for the community. But these returns are not without risks – LINK holders will be able to finally achieve quasi-staking through the LINKSWAP AMM.
LINKSWAP will facilitate consistent yield generation that is protected from impermanent loss, rug pulls, and traders will enjoy lower gas fees. Furthermore, the AMMs associated with LINKSWAP are built to provide trading fees to LPs/YFL holders. Higher liquidity provisioning is directly proportional to liquidity fees distributed to the providers.
How Does LINKSWAP Protect the LP’s from Impermanent Loss?
The LINK holders prefer to HODL their currency rather than risk it, leading to a potential losses with current generation AMMs. However, LINKSWAP aims to lower the risk and attenuate impermanent loss by utilizing Continuous Liquidity Pools (CLPs).
Instead of holding assets in their wallets, users can leverage their tokens to provision trades and earn profits that are again protected from the inadvertent ups and downs of the market. Additionally, these returns feature no impermanent loss and lower overall gas fees to incentivize traders.
LINK holders do have the option to stake their currency AMMs and get better returns currently. However, these returns will be subject to market forces, and the users might end up with lesser yield than their initial investment in the pool.
LINKSWAP protects users’ liquidity in the pool by utilizing Thor CLP Blackhole Swap technology. ThorChain redefines the incentivization mechanism of the liquidity pool.
Without ThorChain, during the time between a trade is ordered and executed, the Cryptocurrency market’s high-volatility can turn the tide in either direction.
Any user would want not to be an LP to avoid this high price slippage. ThorChain lends protection to the LP by incentivizing the users for their contribution to this liquidity. Thus, the on-chain liquidity keeps the wood-burning, and the user enjoys the warmth of incentives.
Secondly, LINKSWAP also reels in the unique ability of BlackHoleSwap to neutralize the pool by balancing out the surplus and deficit. BlackHoleSwap takes excess supply from the lending side to offset the losses created by the borrowing side and brings a balance to the equation.
BlackHoleSwap is one of the most influential and deep-set AMM technologies that feature low price slippage and maximizes capital utilization.
All in all, when the Link Marines choose to become LPs on LINKSWAP, the benefits will include lower fee and durability to impermanent loss.
Protection from Scams and RugLock
DeFi systems have indeed revolutionized the cryptocurrency sphere. The lucrativeness of the DeFi ecosystem also makes it vulnerable to scams and fake currency schemes.
Fake token listings are created on-chain, and these false tokens are swapped with real assets or authentic currencies, leading to scams and loss.
Another aspect that often dooms both traders and users to loss is the creator’s unannounced removal of the entire liquidity pool from different exchanges, termed “rug pulling”.
There are listing fees that need to be mandatorily paid for entering the market to restrict scammers from entering the AMM. Additionally, 90% of the listing fees will go towards the stake share of YFLink that is done on LINKSWAP. The rest 10% will be transferred to the YFLink treasury.
The second important aspect of the protection provided by LINKSWAP is RugLock. A mechanism by which the seeders can opt for setting a lock-in period of time where they won’t withdraw liquidity. The motive behind this optional setting is to realize a Proof of Trust environment among the community.
When the community members know that the seeder has committed to the lock-in, it will be easier to establish trust.
In a Few Words…
Though the full-scale conceptualization of LINKSWAP is yet to be seen, the product offering and working mechanism of this innovative technology is propitious. It seems that the development team has found a solution to address the issues that were limiting LINK holders from exploring DeFi further.
Providing a safe space to trade and stake LINK freely without getting exposed to various dangers is at the core of LINKSWAP. It is faster, more secure, highly sophisticated, and ready to change the future.