At present, Plato Farm, the farm metaverse project, cooperates with the LAAS protocol Elephant Swap. Investors and community users who hold Plato Farm's ecological token PLATO will be able to cast ePLATO at a ratio of 1:1 through Elephant Swap. In terms of price, ePLATO, which is currently minted through PLATO, is 17 times the price of PLATO (conservative estimate), allowing many PLATO holders to obtain quite substantial returns in a bear market.
Elephant Swap itself is a LAAS protocol, which can essentially provide liquidity for many encrypted assets, so why can Elephant Swap amplify the value of PLATO so much?
This article explains many concepts in detail. If you want to understand ePLATO directly, please read the second part of the following paragraph directly - " Taking ePLATO as an example, talk about Elephant Swap and its potential arbitrage opportunities "
What is ePLATO minted through Elephant Swap?
1. Let’s talk about LAAS and Elephant Swap first
Liquidity is the value basis of encrypted assets. Of course, it is also the foundation and lifeblood of DeFi. Only liquid money can bring more profits and potential value. After the summer of DeFi, through incentives, investors will be attracted to deposit idle funds into the fund pool in the form of liquidity mining to bring further liquidity to the protocol. This method usually allows fund holders to spontaneously participate.
LAAS (Liquidity as a Service) is to build liquidity by itself and provide liquidity for other projects, agreements or encrypted assets. These emerging protocols, through the launch of liquidity services, allow all potential liquidity demanders to directly obtain liquidity, without the need to build their own liquidity pools to attract others to provide liquidity. So we see that liquidity has gradually started to serve as a service and is spreading in the DeFi world. This means that many DeFi protocols will no longer need to disperse energy on liquidity, they can focus more on the logic of their own business, and can further avoid potential risks (contract security, etc.) brought about by their own liquidity construction.
This is like we want to open a brewery. Before that, we have been hiring villagers at high prices in a decentralized manner to fetch water from the well, and often faced a situation where the supply of water was in short supply (the previous liquidity mining model), and soon the village came. We set up a distributor, which first collects well water from the villagers, and then centrally supplies water to the brewery (LAAS service), so that the brewery can obtain sufficient water and the cost may also be reduced.
Elephant Swap itself is a relatively innovative project in the LAAS track. Previously, Olympus was also a LAAS project. Users could use LP Token or other single-currency assets such as DAI and wETH to trade, and purchase OHM from the agreement at a discount (users could not redeem it), and Olympus centrally controlled these LPs (liquid Sexual certificates), which can easily lead to the risk of a run on Olympus when selling LPs when the unilateral market or OHM prices plummet (just like UST).
Of course, Olympus only provides liquidity for fixed projects, and it is not open to all projects. However, Elephant Swap itself does not control the liquidity of users. By casting redeemable eTokens at a ratio of 1:1, the liquidity is always in the hands of users. At the same time, any user who provides liquidity for Elephant Swap can get a lot of money.
2. Taking ePLATO as an example, talk about Elephant Swap and its potential arbitrage opportunities
Therefore, there is an essential difference between Elephant Swap and Olympus in the way of providing liquidity. Elephant Swap has designed a new mechanism to realize the value-added protocol. The ecology focuses on Tard-to-earn, and continuously promotes users to provide liquidity and value for the ecology through various forms of income. Elephant Swap is open to any project. After the project is launched on Elephant Swap, the holder of the asset can pledge the original Token to the pool, cast the locked eToken 1:1, and unlock it through other transactions in Elephant Swap eToken, usually the value of eToken is much higher than the original Token.