How does Multiple work?
The mechanism of Multiple is quite simple. Suppose you have some available liquidity and want to make some profit off it. Then you basically have two options. The first option is to operate your liquidity on your own. But this requires specific skills, consistent practice, and a lot of knowledge, asides from being risky. Alternatively, you could let professional investment managers do it for you.
- Step 1. You need to invest your liquidity into the Multiple’s pool. It can be ETH/DAI or any other supported token.
- Step 2. Your funds only get to the professional investment managers after they have been selected. For starters, the initial vendors oversee the selection process. They are highly experienced in crypto-trading, investment management, and profit gaining. Hence, they handle the allocation of the funds at the start.
- Step 3. Once you have invested the funds into the Multiple’s Pool, they are allocated among the investment managers (GP). And this makes you a liquidity provider (LP).
Just to make it clear, you should note that the LPs on our platform are the ones who provide funds. The platform will automatically issue LP Tokens as investment certificates, which can either be staked to obtain yield, or transferred to avoid misappropriation of the fund pool. GPs are strategy providers that enable liquidity. Once a user becomes a qualified GP, they can make a market using funds that are allocated to them by the Smart Contract. When a GP withdraws from a market-making strategy, they receive rewards based on the bonus ratio of their current level.
GPs in Multiple are the only stakeholders with a Work Permit. You can only get a Work Permit if you meet a certain set of criteria that prove your strategies are profitable. If you start making loses after obtaining a Work Permit, you lose the Permit and cannot manage the LP’s funds anymore. Multiple designed this system, named Proof of Profitability, to ensure that all the members of the platform makes profit.
- Step 4. Enjoy the process. Basically, LPs just need to invest their funds and watch them grow. However, they can participate in the process by defining the price range their funds would be traded, although this is not even necessary. The funds are allocated to several GPs, ensuring the portfolio management process is completely decentralized and the risks of making loses lowered.
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.