Decentralized finance is a popular industry among cryptocurrency enthusiasts. However, ushering in the next generation of DeFi will require synthetic asset protocols not only bringing derivatives of various asset classes, real world- and crypto assets, on chain, but offering this opportunity at highest capital efficiency while eliminating the risk of liquidation for liquidity providers (LPs). ISSUAA, community driven and set-up as a Decentralized Autonomous Organization (DAO), allows creating, minting and trading synthetic ISSUAA assets (i. E. derivatives of virtually any real world- and crypro asset) on Polygon Mainnet and thereby provides unique, next generation low risk yield farming and tokenomics of the IPT Governance Token for investors and liquidity providers.
Several projects try to bridge the gap between real-world assets and the crypto sphere. Whether it is derivatives of precious metals or of stocks, stock indices, commodities or almost any other existing financial instruments – via DeFiChain, Mirror Protocol, Synthetix, or others – there is a growing demand for digital representations of real-world assets. Thus, bridging the gap between the two sides of the financial spectrum is a crucial objective for DeFi developers.
The team behind ISSUAA acknowledges this budding potential and aims to offer new advantages. As a decentralized finance derivatives liquidity protocol, ISSUAA does not require over-collateralization. Every asset has long and short pools, minimizing impermanent loss for liquidity providers. Thus, there is an attractive incentive for investors and liquidity providers. Anyone can invest, mint, provide liquidity, and trade synthetic ISSUAA assets.
Any user looking to mint ISSUAA assets or provide liquidity will need to use USDC stable coins. Furthermore, these coins must reside on the Polygon blockchain, as it is a more efficient environment for transactions and development than Ethereum.
This new form of low-risk yield farming can bring mainstream users into the DeFi space. Additionally, there is a 0.25% trading fee on each trade for liquidity providers. Those LPs also earn value-bearing IPT governance tokens on top of those trading fees. IPT is the governance token, which is used for voting processes but is also generating “inner value” as 0.005% of all trading volume accrues for the IPT token.
ISSUAA IPT Distribution And Rewards
The distribution of the native IPT token occurs fairly. Unlike most currencies, there is a weekly emission schedule of 3% of the delta between issued tokens and maximum supply. Furthermore, the minting occurs via the ISSUAA DAO, which means there is no person in charge. Instead, the Decentralized Autonomous Organization is run by the community, incentivizing the use of IPT for governance purposes. The maximum supply is 100 million IPT.
Every voting round through the DAO will reward newly minted IPT. All token holders are encouraged to vote correctly and boost the overall interest in IPT. Incentivizing good behavior and proper voting are two essential aspects of making a successful DAO structure. For the team, the goal is to attract and retain competencies and participation to keep growing ISSUAA and evolve it into a truly decentralized finance protocol.
The ISSUAA DAO also receives a 10% share of all IPT tokens. That pool of tokens can be used to give grants of up to 100,000 IPT tokens to community members which bring value to the protocol and its community. Every proposal needs to be voted on by the community for approval. An approved proposal will see the necessary funds transferred from the DAO to the user automatically.
Closing Thoughts
More opportunities to bridge real-world assets with cryptocurrencies are a positive development. The approach by ISSUAA is intriguing, and the DAO-based structure can help empower community members in various ways. The protocol supports stock indices, commodities, precious metals, and crypto assets, all under one umbrella. Liquidity providers have the opportunity to farm attractive yields from trading fees and token rewards with a high capital efficiency and price risks which are comparable with stable coin farming.
Catering to the needs of mainstream users will prove crucial for the future of decentralized finance. It is insufficient to only offer DeFi solutions to cryptocurrency enthusiasts. Creating financial equality requires a much broader effort that involves real-world assets people may already own today.
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