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PLP Fund
PLP fund provides liquidity for leveraged traders and spot traders on the Perp88 platform. In addition, it also functions as the counter party to the traders who trade on Perp88. Consequently, the profits and losses from counter trading on the platform also accrue to liquidity providers.
The value of the PLP fund is calculated using the following formula:
PnL = Net profit/loss of all the current open positions, where profits to traders are registered as losses to PLP and losses to traders are registered as profits to the fund.
The PLP fund will consist of the bluechip assets highlighted in the table below. As PLP fund acts as liquidity for traders, it is highly important to ensure that there's sufficient liquidity for each type of asset for leveraged trading and swapping. Perp88 has assigned a target weight to each of the asset in the PLP fund to achieve an optimal allocation of the fund. Target weight could be adjusted in the future to suit the market and trading conditions.
# | Asset Type | Assets | Target Weight |
|---|---|---|---|
1 | Stablecoin | USDC | 30% |
2 | Stablecoin | USDT | 20% |
3 | Volatile Asset | MATIC | 5% |
4 | Volatile Asset | BTC | 20% |
5 | Volatile Asset | ETH | 25% |
Users can choose to deposit any asset listed above into the PLP fund. When users make a deposit, Perp88 will mint PLP tokens of equal value to the depositor. On the other hand, when users withdraw assets from the PLP fund, their PLP tokens are burned and they receive back assets in equal value.
Below, we highlight what happens when a user deposits or withdraws funds from the PLP pool.
- Deposits: Funds are deposited into the PLP fund through the minting of PLP tokens. e.g. if the price of PLP is $1.00, a user can mint 1 PLP by depositing $1.00 worth of eligible tokens (USDC, USDT, BTC, ETH, MATIC)
- Withdrawals: Funds can be withdrawn from the PLP fund through the burning of PLP tokens. e.g. if the price of PLP is $1.00, a user can burn 1 PLP to redeem $1.00 worth of eligible tokens (USDC, USDT, BTC, ETH, MATIC)
Note that deposit fees are charged when you deposit an asset whose actual weight is higher than the target weight to prevent the fund from having excessive amount of one type of asset. To avoid paying deposit fees, users can deposit assets whose actual weight is lower than the target weight.
Similarly, withdrawal fees are charged on an asset whose actual weight is lower than the target weight to prevent the asset from being withdrawn. To avoid paying withdrawal fees, users can take withdraws in assets whose actual weight is higher than the target weight.
For more information on the safety measures we have put in place to protect PLP depositors, please click here.
Last modified 6mo ago