Parcl creates a way to speculate on the real estate markets in the US. It’s built on Solana. Parcl borrows from both traditional AMMs and synthetic asset protocols to produce an efficient and simple synthetic asset AMM. The term “automated market maker” typically refers to exchange smart contract protocols that use mathematical functions for price discovery. The term “synthetic asset protocol” typically refers to smart contract protocols that collateralize synthetic exposure, use oracles for an underlying price, and use on-chain mechanisms to enforce or promote settlement at the underlying price.
Parcl uses Pyth oracles to stream the real estate market price feeds on-chain.
Taken from the whitepaper
- Isolated Pools: Pools are isolated markets where traders can get exposure to a price feed and LPs can provide liquidity. Each pool has its own long-short skew and funding rate.
- Solvency: The exchange rate between the pool’s collateral token—a stablecoin like USDC—and its liquidity token initialized at pool creation acts as this architecture’s “bonding curve.” The exchange rate forces solvency because trader performance and payout is in liquidity tokens. This accounting model ensures that positions ultimately clear into collateral at available resources in the pool as opposed to a dollar for dollar accounting model.
- Price Execution: All positions are opened and closed at the current price of a pool’s oracle price feed. Positions maintain their price peg because they can only be opened and closed with the core smart contract.
- Zero Credit Risk: The protocol does not offer borrowing on margin. Instead, traders can select leverage up to 10x to be applied to price movements. The pool is compensated for this risk in long-short funding and skew impact fees.
- Optional Liquidity Provision: Liquidity providers are optional because traders trade against one another and the pool’s exchange rate acts as the proxy for an insurance fund or similar liquidity backstop. Participating liquidity providers (”LPs”) provide collateral in exchange for liquidity tokens at the current exchange rate. Any party holding liquidity tokens implicitly earns reinvested fees and takes on the other side of net trader profit and loss (”PnL”). Liquidity tokens are redeemed for collateral at the current exchange rate.
- Skew Management: The pool has two mechanisms to manage open interest imbalances (”skew”): long-short funding and skew impact fees. Impact fees are only applied to positions that worsen the imbalance. Traders in balanced pools are less likely to incur any principal risk when redeeming liquidity tokens for collateral after closing positions.
- Delayed Settlement: Collateral leaving the protocol is delayed. This protects all stakeholders in the event of an emergency because the protocol admin can pause the protocol and mitigate risk.
But what if you don’t want to speculate or don’t have the expertise regarding the real estate market in the US? Parcl provides a way to earn from the traders by providing liquidity. By providing liquidity you’ll get paid from the trading fees. Right now it has a liquidity provider program. Use my code “mungus” for 5% kek looool (will remove if this is against this forum guidelines )
Check it out!