The rapid growth of the DeFi market has brought a wealth of Lego components that can be combined to make the market evolve, but behind this boom, the complexity of the products has made it significantly more difficult for new entrants to get started, and even for DeFi “veterans”, the high cost of in-chain interactions has made the quest for higher revenue and capital utilization across products more and more remote. This issue has become another bottleneck in the development of DeFi.
Even for new public chains with significantly optimized on-chain transaction costs and efficiency, these problems are still to be solved as the DeFi ecosystem grows, as there is an objective market demand for investors to get the best dynamic returns in the face of massive applications. For Polygon, which has quickly built a relatively complete DeFi ecosystem in less than a year, and has performed well during the recent rebound from a sharp pullback, the new Adamant project is designed to address this problem within the ecosystem and allow users to still enjoy higher dynamic returns on their locked-in assets.
What is Adamant?
Adamant is an income aggregator that aggregates pools of funds (including funds and time deposited into liquidity pools) to get the best DeFi returns. Adamant can “reinvest” pledged assets for Polygon ecosystem users, allowing them to enjoy compounded returns. Currently, Adamant provides revenue optimization services primarily for LP users of Quickswap, the decentralized exchange in the Polygon ecosystem, and has access to approximately 100 Quickswap pools, with the recent addition of Cometh and SushiSwap pools. By depositing idle LP tokens into Adamant, users can earn more LP tokens and Quick, resulting in additional revenue.
How does Adamant generate revenue for its users?
In a nutshell, Adamant helps users generate revenue through pooling contracts with asset return maximization strategies. Currently, there are three types of machine-gun pool strategies: auto-reinvest LP tokens, auto-pledge Quickswap, and giant whale machine-gun pools. Users can choose according to their needs.
Auto-Compound LP Token (Auto-Compound LP)
This machine gun pool will automatically sell tokens mined from LP tokens (e.g. quick) to increase the number of liquidity tokens (LP token), thus gaining revenue for users in terms of the number of LP tokens.
The strategy of this pool is to automatically pledge the quick tokens mined from LP tokens to obtain dquick. through this pool, users will receive additional quickswap fee income in addition to the quick tokens.
Giant Whale Machine Gun Pools (Degen Vaults, such as KRILL/USDC Vaults)
KRILL/USDC Vaults automatically sell 1/2 of the mined KRILL and compound it into more KRILL/USDC LP tokens. Since the contract does not support redistribution of KRILL, this machine gun pool does not earn ADDY rewards.
Showing the yield of Adamant, it is also excellent that the APY of stablecoin LP can reach 80%+.
Although the logic of this reinvestment does not seem to be complicated, taking the strategy of automatically reinvesting LP tokens as an example, it is just claiming the proceeds, claiming them and then trading them for tokens that provide liquidity, and then depositing them into the liquidity pool again to get more LP tokens. However, the difficulty lies in determining the best time to compound and reinvest. And since retail investors usually have a small amount of capital, there is still a huge advantage from a cost perspective to spend Gas’ Adament by aggregating a large amount of capital.
Adamant Finance’s native token is ADDY, which can be issued in two ways: pre-sold & pledged. Based on its pledge issuance mechanism of minting 50ADDY for every 1ETH of revenue, 1ADDY is backed by an underlying value of 0.02ETH. Currently, ADDY tokens are only used for pledging and do not have governance rights.
Adamant Finance has been pre-sold on May 2 at 1WETH=500 ADDY with a 6-month lock-up. Of this amount, 50 WETH and 50,000 ADDY will be used to provide liquidity to Quickswap and the remaining 50 WETH will be used for audit and project development.
For every 1 ETH of revenue earned, 500 ADDY will be issued. there are two ways to pledge ADDY: pledging LP tokens & pledging ADDY.
There are three types of ADDY pledges: Vesting, Staking, Locking
Staking is the most flexible and can be accessed at any time. Pledging through Staking earns Adamant handling fee income.
Vesting is locked for 90 days and carries a 50% penalty for early withdrawal. Pledging through Vesting earns Adamant fee income.
Locking is the most restrictive, requiring a 90-day lockout and no early withdrawal. Pledging through Locking earns two incomes: a fee and a penalty for early withdrawal of Vesting.
On-Chain Risk Precautions
In light of the recent security incidents caused by lightning lending attacks on the chain, Adamant says that since the project’s vault does not support direct access to smart contracts, there will be no loss of vault funds due to hackers manipulating asset prices through lightning lending, as in the case of Bunny and Harvest. In addition, the Minter contract will also intervene through the prophecy machine to obtain the weighted average price of the corresponding assets in the past 24 hours and set a price range, beyond which a “protection mechanism” will be triggered, which can also prevent hackers or miscreants from manipulating prices through other means.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/three-minutes-to-read-adamant-finance-polygon-eco-revenue-aggregator/
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