NFT as a Work Permit: Key to Effective Liquidity Management on Uniswap V3

NFT as a Work Permit: Key to Effective Liquidity Management on Uniswap V3

Although Uniswap V3 undoubtedly has brought various exciting features to take the DeFi game to the next level for its users, several bottlenecks continue to hinder its faster and more efficient adoption, more so for the regular users than the experts.

Multiple Protocol, thus, continues to work tirelessly to serve as a bridge to link ordinary user funds and professional market maker teams. General Partners (GPs) are entering the DeFi space to change the entire game with Multiple Finance — an industry first!

NFT as a Work Permit

To safeguard and protect the interest of users/LP on Mainnet, Multiple Protocol has introduced NFT Permits, which are mandatory to get into the protocol and are mintable only after whitelisting through application forms. Such advanced security and seamless liquidity management strategy is used to increase participation in Uniswap V3 and maximize market-making benefits for both projects and users.

In simple terms, ERC20 tokens do not represent the Liquidity Positions in Multiple Protocol. Instead, it is done with the help of NFTs, which act as “Work Permits” for General Partners/Expert Traders providing Market-Making and Active Liquidity Management strategies of Capital Vaults allocation on Uniswap V3.

However, the protocol has ensured that the commonly shared positions can still be made fungible (ERC20) via peripheral contracts or through other partner protocols. Additionally, trading fees are no longer automatically reinvested back into the pool on Liquidity Providers’ (LP) behalf.

The “Work Permit” is an NFT Token given to each user within the system that can only be transferred under limited circumstances. The Permit records investment performance and is used in determining Proof of Profitability.

What is this Proof of Profitability?

To ensure high profitability with advanced security of funds, Multiple Protocol has introduced a whole new system of Proof of Profitability (POP). Liquidity Vault allocation to GPs is based on this POP system that ensures that every role involved in the consensus model has ample motivation and confidence to participate.

The Multiple Protocol POP model is designed based on the following four principles:

  • 90% funds will be at the disposal of the most profitable 10%
  • Higher profitability promises more funds allocated
  • Profits will be used to subsidize impermanent loss as a priority
  • Dynamically adjusted stop-profit and stop-loss rules

The POP formula is as follows: POP = Annual% *(MP)(now — actionEndTime)

The POP model makes Multiple Protocol unique compared to all other liquidity management protocols. It enables ranking of GPs based on their performance and allocates more liquidity to best performers.

All “Work Permit” holders will be enjoying differing access limits to funds, stop-loss windows, and at certain levels, will also be eligible for MUL Token airdrops that occur from time to time!

Multiple will automatically generate these “Work Permits” based on fund usage and earnings performance. The platform will also automatically revoke Work Permits from holders whose operation performance is less than satisfactory. The newly generated Work Permits will be first assigned to users that stake the largest number of $MUL.

All these are done to ensure secure, fair, sustainable, and actionable insights for all users on the platform — from General Partners (GPs) who perform well and manage liquidity to Liquidity Providers (LPs) who are able to participate in large pools with even less capital!

About Multiple Finance

Multiple Protocol is a Decentralized Finance (DeFi) protocol based on Ethereum that allows expert traders (GP) to provide professional AMM liquidity strategies, which in turn ensures users (LP) securely benefit from the best yielding products.

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