The Equality Trading Between Users and Projects on Arc Finance
Arc Finance creatively incorporates ARC’s tokenomics into its company operations and user incentives, resulting in not only enhanced value support, but also improved resilience. It is a completely new liquidity management concept for DeFi 2.0.
One of the fundamental services of Arc Finance, a DeFi2.0 economic infrastructure, is LaaS (Liquidity as a Service). Arc Finance’s system mechanism allows it to offer not only a significant liquidity premium, but also a unique trading experience compared to other CEXs and DEXs: a trading experience that is on par with the project party.
A quick one before we go further, what is Arc Finance?
ARC Finance is an AUM-based liquidity market capitalization management technology that enables users to accomplish effective high-yield liquidity management through the use of a combination of premium mining tactics. The objective of ARC Finance is to provide proactive liquidity management services for a variety of public chains and tokens.
Arc Finance, a Binance Smart Chain (BSC)-based LaaS for Basic Economic Facilities, addresses the issue by combining Automatic Unlocking Mining (AUM) and Liquidity Premium Pool (LPP). It intends for all platform users to be able to trade in order to earn money. It is an efficient algorithm that automatically modifies the pace at which r-Tokens are unlocked.
The automatic unlocking mining algorithm permits users to utilize a particular variety of token as a collateral and create corresponding r-Tokens which will remain locked on the onset and will be unlocked when users begin to mine or trade in the liquidity pool as the AUM algorithm asserts the transaction activity of a user as the criterion to unlock and release the locked r-Tokens.
Miners could use a specific type of token as collateral with the AUM algorithm, and corresponding r-Tokens would be created. R-Tokens would be locked at first and unlocked when users began mining or trading in the Liquidity Pool. Arc Finance would use an algorithm to automatically adjust the unlocking speed. The algorithm’s main idea is that the more a user trades in the LP, the more r-tokens are unlocked, providing users with a higher annual percentage yield (APY).
In addition, during the trading cycle, extra rewards are given to users in the form of platform tokens to encourage them to maintain a positive trading habit. There exist four technologies that are employed as indispensable technical support for the automatic unlocking mining algorithm to enhance its application.
Users were always on the vulnerable side in the past, whether they traded on a CEX or a DEX. The systemic risk in CEX trading, for example, is not solely due to the CEX’s harmful activities. Worse, the CEX might use the tokens put on the platform to manipulate the market and reduce market values, obtain low-cost tokens, and so on. Although there are fewer opportunities for projects or CEXes to execute fraudulent transactions on DEX, tokens held by projects still pose a risk to users. Notwithstanding, the highlighted issues are taken care of in the Arc Finance platform bringing innovation to your door.
Arc Finance Equal Trading and how it works
At Arc Finance, the transaction environment is described as equal trading. It isn’t a trading approach or a trading system. Before engaging in the AUM trading system, both projects and users must re-mint their tokens into r-tokens, and all r-tokens will be locked up. Furthermore, regardless of whether they belong to users or projects, all r-tokens are released in an identical proportion based on block generation speed. Users, projects, and large holders are all at the same starting point in this situation.
The AUM Trading Game
Underneath the AUM mechanism, the price of r-token rises in tandem with the user’s trading frequency and fund liquidity, resulting in a transaction premium. If the r-token is sold too soon, it may result in reduced profits in the future. So, how much r-token can I unlock through transactions or other behaviours and at what price should I sell the r-tokens to maximize my profit? These are the two considerations that every user must consider.
Users can buy r-tokens under the AUM mechanism and re-mint them into original tokens even when the r-token is under selling pressure and the price is lower than the initial token price. They can sell such tokens in marketplaces that do not use the AUM mechanism to generate a safe and consistent profit margin. So, here’s another question for people to consider: How much cheaper should the price of r-token be than the price of the token in order for me to consider buying it?
Buying and selling has become a game for all users thanks to the AUM mechanism, which has created more room for a trading game with equal trading circumstances.
The DAO Governance Game
Arc Finance allows projects to use Arc Finance’s infrastructure to create a new liquidity pool for their tokens using DAO-owned liquidity, as well as earn Arc Finance platform tokens while taking use of the liquidity benefits. Arc Finance improves the liquidity value of funds, produces liquidity premiums, and captures the value of these liquidity premiums to provide higher market competitiveness for all participating projects by enriching the ecosystem with a new set of essential economic facilities.
The platform ecology should be built primarily to improve the active liquidity of the market, which is the liquidity premium service suggested by Arc Finance, as part of the core economic facilities of Defi2.0. It gives a liquidity premium to market funds by encouraging users to engage in active market behavior.
Tower Byzantine Fault Tolerance is a method used in the AUM algorithm (Tower BFT). Under Arc Finance’s heterogeneous multi-chain state, Tower BFT can assure the correct operation and income distribution of community nodes, as well as the smoothness of system judgment.
A DAO closed loop is formed by the game between these nodes and the community. Simultaneously, those nodes will actively effect fund profitability after selecting alternative liquidity pools, forming a mutual game and resistance between fund and fund, as well as between community and fund. The community will alter the yield of one mining pool through DAO to support the other, and funds will preferentially choose pools with better yields.
Arc Finance’s objective is to promote open ecological development by constructing a liquidity-as-a-service infrastructure and implementing liquidity premium trading. As a result, projects with low liquidity can earn more at Arc Finance, while those with increasing liquidity can continue to profit.
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