Two months ago the decentralized exchange “SpicySwap” launched on Tezos mainnet. Now, Yield Farming platform Matter DeFi aims to increase incentive for users to provide liquidity on SpicySwap.
Matter DeFi will have LP token farms where users can earn MTTR tokens. Through an automated buyback mechanism, an artificial buying pressure is created to positively influence the value of MTTR.
On any exchange, liquidity is important for a steady user experience. If liquidity is low, slippage is high, which simply means that a buy or sell of average size can influence the price a lot, and will give the buyer/ seller less value for its transaction.
Anyone can add liquidity on a DEX. The main incentive to do so is because of the fact that people that provide liquidity earn a percentage of the trading fees that the DEX charges.
However, if liquidity is low, the trading volume is likely not that high either, which results in a low amount of fees and thus low earnings for liquidity providers. Liquidity can be increased by making it more worthwhile to add liquidity for users.
This is where Matter DeFi comes in.
If you provide liquidity, you automatically have liquidity pool tokens (LP tokens). Matter DeFi will have farming pools where people can farm their LP tokens and earn free MTTR tokens.
MTTR tokens value is positively influenced by an automated buyback mechanism. There will be a 5% fee for staking and unstaking on the platform.
All fees generated from Matter DeFi will be automatically used to buy back and burning MTTR token. So every stake and unstake action on the platform will result in buying and burning MTTR tokens, creating an automated buy pressure and decreasing the current circulating supply.
To create a MTTR liquidity pool, an Initial Futures Offering (IFO) will be held where people can buy future MTTR tokens (dMTTR tokens).
MTTR tokens will be distributed to dMTTR holders after the IFO. All XTZ raised in the IFO will be used to create a MTTR/WTZ liquidity pool on SpicySwap.
This way a healthy liquidity level for MTTR trading should be reached from the start. The LP tokens from this pool will be burned, locking the value into the pool forever. This guarantees that there will be no rugpull on the MTTR liquidity.
The MTTR IFO will be held on Wednesday, December 15th.
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