Introducing PBX/x LP Collateral Markets on Paribus

Proposals
1

Introducing PBX/x LP Collateral Markets on Paribus

Greetings fellow Paribians :wave:
This proposal offers to introduce PBX/x LP collateral markets on the Paribus protocol, enhancing PBX liquidity across decentralized exchanges (DEXs) and community engagement through a milestone based approach. Ultimately, this initiative seeks to get PBX listed as a standalone asset to broaden utility within the ecosystem.

Paribus LPx
Paribus LPx1920×1080 76.2 KB

Objective:

The primary goal is to implement PBX/x LP collateral markets with liquidity pool (LP) milestones gradually increasing Loan-to-Value (LTV) ratios for PBX/x LP collateral, incentivizing participation and adoption among PBX holders.

Implementation
After discussing this proposal with the community and defining LTV/TVL parameters, we will proceed to on-chain voting through governance to list PBX LP as collateral on Paribus.
Users will be able to migrate and provide liquidity using their PBX, then deposit on Paribus to borrow and earn rewards based on milestone achievements.
Currently, users can migrate their tokens from Arbitrum or Ethereum either through bridges such as the Arbitrum bridge or Chainport, or through CEXs like Gate.io or KuCoin (both Cexs Arbitrum deposit/withdrawals are in the works).
Finally by using LP, users will be able to go long or short on PBX on-chain (:
Pros:
1.Market Depth: Market depth refers to the market’s ability to sustain large orders without affecting the price of the asset. When PBX/x LPs have deep liquidity, it indicates a healthy market where large buy or sell orders can be executed without significant slippage. This attractiveness draws in more traders and investors, boosting overall market activity.

  1. Community On-Chain Engagement: PBX LP listing incentivizes PBX holders to participate in liquidity provision, and engaging with the native token on the protocol where they can use it to deposit/borrow!

  2. Diversified Use Cases: Beyond just being a tradable asset, PBX tokens can be used on-chain expanding utility

4.Listing PBX: This initiative attempts to pave the road to list PBX as a standalone asset on Paribus further increasing PBX & community on-chain engagement.

Cons:

  1. Impermanent Loss: Liquidity providers may experience impermanent loss due to price fluctuations between PBX and its paired asset, impacting their overall returns.
  • Detailed Explanation: Impermanent loss occurs when the value of the provided assets changes compared to when they were deposited in the liquidity pool. If the price ratio between PBX and its paired asset changes significantly, liquidity providers may end up with less valuable assets when they withdraw their liquidity, leading to potential losses despite earning trading fees and rewards.

Liquidity Pool Milestones:

A milestone-based approach for PBX/x LP on Paribus is designed to incentivize liquidity provision and gradually increase LTV ratios through defined LP TVL targets and incentives.

Target Ranges & Incremental Goals:

Liquidity Pool Total Value Locked (TVL) milestones are segmented into predefined ranges, such as:

  • 100K - 199K
  • 200K - 499K
  • 500K - 999K
  • 1M - 1.99M
  • 2M - 4.99M
  • 5M+

Each range represents a milestone. Each milestone will be pre-defined with a corresponding LTV increase, meaning PBX LP holders will be able to borrow more funds against their LPs. LTV ratios start conservatively and will increase as liquidity pool TVL reaches higher milestones, securing both users and the protocol.

Rewards will be structured to incentivize early participation and sustained commitment for long-term liquidity provision.

Challenges and Considerations:

  • Market Volatility: external market factors can impact liquidity pool dynamics and achievement of milestones, necessitating adaptive strategies like using governance to execute milestone action.

  • Educational Requirements: Complexities of liquidity provision and LP management.

  • Incremental Growth: Gradual increases in liquidity pool TVL and LTV ratios are needed to ensure sustainable growth, reducing risks associated with rapid expansion.

Conclusion
PBX/x LP integration on Paribus represents a strategic initiative to enhance liquidity, promote community engagement, and utility growth within the Paribus ecosystem. By setting clear targets and managing risks effectively, Paribus aims to establish a robust foundation for PBX as a versatile asset on-chain and bring more use cases for holders!

We invite the Paribus community to provide their suggestions and feedback on this proposal. Specifically, we are interested in hearing your preferred liquidity pool pairs (e.g., PBX/ARB, PBX/ETH, or the current PBX/USDT) and any other suggestions you might have. Your input is invaluable in shaping the future of PBX and the Paribus protocol.

Please share your thoughts and suggestions down below :point_down:

Thank you for the continued support
Best regards
The Paribus Team

5 Likes
3

Hey Paribus :sunglasses:
Well, me personally I would like to see PBx/USDT pair.

The only reason is because USDT is stable and with PBX already unstable would be good to minimise risk.

But this is great feature to have before we list PBX as collateral on Paribus.

4 Likes
4

Hey Paribus Team and Community,

Thanks for the great proposal! I think the PBX/USDT pair is the best choice since it offers more stability and can attract more participants.

Appreciate all the hard work!

4 Likes
5

Thank you for keep us updated sir. We will continue supporting PBX and please keep posting future news.

3 Likes
6

I think PBX/USDT is a good start. How long will it be necessary to see other LP options?

3 Likes
7

I personally agree with this!

1 Like
8

Definetly good starting point. This is big. Can’t wait to see others available too!

I’m in!

9

Totally agree but, we need real uses for PBX, a pair can be a good start.

3 Likes