At Flash.trade, we are proud to introduce the Flash Liquidity Pool (FLP)-⚡️, an all-encompassing liquidity pool capable of powering spot trading, perpetuals, options, and stable-coins. We have successfully designed this pool to meet all your DeFi requirements, offering a unified solution that supports various aspects of DeFi, such as lending/borrowing, trading/market-making, and minting stable-coins. With FLP, you can focus on what you enjoy. Whether it’s passively providing liquidity or actively trading, while we handle the rest.
Now, what exactly is FLP?
FLP is an index comprising the most recognized assets issued on blockchains. These assets hold significant economic value that will remain irreplaceable as blockchains continue to grow and add value to the world. It functions much like popular traditional indices such as S&P 500, DJI, and FTSE but is tailored for the crypto market. Notably, a considerable portion of FLP consists of stable coins, making it a well-balanced investment portfolio asset. The traditional portfolio that is often recommended is allocating 60% towards riskier assets like stocks and 40% towards more stable assets like bonds. We mirror this balance offering 60% exposure to cryptocurrencies (stocks) and 40% to yield-generating stables (bonds). Whether in bull or bear markets, FLP is an index every investor would love to have exposure to.
Yield for FLP through Flash.trade
The initial protocol developed on top of FLP is Flash.trade, an innovative asset-backed perpetuals exchange. This platform is set to distinguish itself on Solana, serving as a pioneering solution in the asset-backed perpetuals sector, capitalizing on Solana’s technological edge over other blockchain networks.
Unlike conventional margin-enabled exchanges that pool user’s assets for lending to others, Flash.trade operates differently. It utilizes trader’s assets exclusively as collateral, and the pool’s assets secure the Profit and Loss (PnL) of traders. This approach distinctly differentiates it from margin exchanges. In a margin exchange scenario, if a trader seeks leverage on a Crypto/USD pair, they utilize their Crypto holdings as collateral, borrow USD, and employ it to purchase additional Crypto, thus amplifying their Crypto exposure. In contrast, on an asset-backed perpetuals exchange like Flash.trade, the trader gains supplementary Crypto exposure but in exchange pay the FLP a margin fee as long as they retain that extra exposure. Since the Crypto remains within the FLP, it can provide traders with unvarying exposure without the risk of slippage as there’s no need to seek external liquidity.
At its core, the FLP consistently offers traders the opportunity for asset exposure within its composition in exchange for the fees levied by Flash.trade. Traders perceive that the expected value (EV) of the Crypto exposure outweighs the effective Annual Percentage Rate (APR) charged as margin fees. In contrast, the FLP believes that the EV of the effective APR surpasses the value of remaining exposed to that Crypto while the position remains open.
The dynamic fee structure encompassing margin, swap, and LP add/remove fees ensures that FLP liquidity provider’s exposure aligns with its composition over time. This mechanism maintains the intended exposure as an index, all the while generating fees from traders entering and exiting positions. Consequently, it delivers real yield to FLP holders.
How does FLP work?
The liquidity pool operates as an oracle-based index offering exposure to its assets at algorithmically risk-adjusted prices and dynamically calculated fees based on parameters published on-chain by decentralized oracles. There are no outside interferences or administrative controls. Flash.trade has gone through great lengths to ensure as much of its tech stack is decentralized and permissionless. This pool allows anyone to provide liquidity or trade for/against it. Meticulously designed to balance itself even in adverse conditions, FLP leverages the power and speed of the Solana blockchain to safeguard against toxic flows that may cause the pool to take categorically bad trades. We plan to continue improving how FLP quotes prices; After all, perfection is never achieved in the markets. That said, even in the current state any losses incurred will be insignificant compared to the fees generated through trading activities.
How can you be a part of it?
If one has been keeping a close eye on our Twitter, you will know that every one of our Flash Beasts comes along with a share of fees from the FLP. Among other exciting attributes and implementations, the Beasts are transferable and tradable tranches of the FLP with the best fee share percentage from day 1.
The main way to be part of FLP however will only require a one-click deposit using your favorite crypto. That’s all it takes to become a liquidity provider. This grants you access to the best risk-adjusted returns and a balanced exposure to the assets constituting the index.
At Flash.trade, we are here to revolutionize your trading experience on the most powerful blockchain capable of supporting the most diverse range of DeFi solutions.