Mycelium Perpetual Swaps

Product Overview

Trade with Mycelium Perpetual Swaps

Product Overview

Mycelium Perpetual Swaps brings extremely low-cost, easy-to-use derivatives to Arbitrum, the layer 2 scaling solution built on top of Ethereum. With no price impact and low fees (0.03% entry and exit fees), traders can go long and short assets in the MLP pool, on up to 30x leverage and swap assets within the pool without moving the market. The pool is composed of high quality crypto-assets and stablecoins. Mycelium Perpetual Swaps is launching in August 2022 and features a jam-packed roadmap bringing new levels of capital efficiency to traders, increased yield for LPs and the ability to trade long-tail assets while preventing against toxic order-flow.

Product Description

Traders on Mycelium Perpetual Swaps can perform asset swaps on ETH, BTC, LINK, UNI, CRV, BAL and FXS and a variety of stable coins. They can also leverage trade these assets in both directions by utilising the assets in the pool.

Mycelium Perpetual Swaps mechanism

MLP Pool

The MLP pool is a multi-asset pool that supports trading and allows users to go long/short specific assets in the pool and/or swap pools assets. This pool earns liquidity provider (LP) fees from market making, swaps and leverage trading. 70% of these fees are distributed back to MLP holders.

Makeup of MLP Pool assets

MLP’s Staking Rewards Program

Mycelium Perpetual Swaps will be boosting MLP returns to a Targeted Yield of 25% APR through a combination of MYC distributions and ETH earned by fees generated for the first month of the Perpetual Swap product’s operation. The following month’s MLP APR will be boosted to a targeted 20%. The boosted APR is inclusive of ETH rewards. If the ETH rewards APR is greater than the targeted APR, no MYC will be distributed.

Fees and Revenue Generation

The Mycelium Perpetual Swap protocol generates revenue by charging fees on the opening and closing of trades and also a “borrow fee” that is deducted every hour a leveraged position is open.

Oracle Pricing and Trade Execution

Mycelium Perpetual Swaps’ dual use of the MLP pool as the counter-party to traders and the oracle pricing system optimises the trading experience for its users. Firstly, trades are executed with zero price impact as the traditional Automated market maker (AMM) or an order book model is not used. Trades are executed at the Oracle price plus a spread. This also benefits LPs as they are not subjected to as much impermanent loss due to the oracle pricing system (not subjecting the LPs to the cost of price discovery via arbitrage).

Additional LP Protection: MEV

We have contracted a proprietary trading firm to minimise any losses from the frontrunning of the oracle updates. Currently, LPs are subject to stale oracle prices which can cause an effect similar to impermanent loss in AMMs. With stale prices, fast traders have an advantage to make trades with the LP pool knowing the future price of the asset will be in their favour. To counteract this behaviour, protect and reward our LPs, the trading firm will be extracting any value from latent oracle feeds and returning profits to our LPs. This way, in the event that the liquidity pool has a stale price, 80% of the profits from Oracle Extractable Value will be distributed back to the liquidity providers.

Trade with Mycelium Perpetual Swaps
Unlisted

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Building infrastructure since 2019. Chainlink Nodes, Arbitrum Validator, Ethereum & Arbitrum smart contracts. 🍄

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Mycelium

Building infrastructure since 2019. Chainlink Nodes, Arbitrum Validator, Ethereum & Arbitrum smart contracts. 🍄