Maverick Protocol, a decentralized exchange platform, has rolled out a new incentive system designed to help maintain the pricing peg of stablecoins and other digitally-secured assets. The initiative allows token issuers, such as liquid staking protocols or stablecoin issuers, to create 'boosted positions' in the protocol's liquidity pools. This encourages liquidity providers to deploy capital within certain price range and build price walls, making it more difficult for assets to experience drastic price changes.
These incentives, generally referred to as 'gauge' systems, have been used by a variety of DEXs such as Curve Finance in order to attract traders and increase their traffic. However, compared to rival services, Maverick Protocol is more efficient as it allows token issuers to configure their rewards over a length of three to thirty days anywhere in a pool, unlike the usual flat structures. Bob Baxley, Founder of Maverick, said the development would help position the platform as the go-to market square for ETH liquid staking derivatives, following the awaited 'Shanghai' upgrade on Ethereum which has enabled users to withdraw their locked-up tokens.
This incentive system comes at a critical time as Liquid Staking protocols are becoming an increasingly attractive option for investors, offering them the ability to accrue rewards while having the functionality to borrow and lend via derivative tokens. To draw attention to their offerings, many protocols pay rewards in the form of their governance tokens. Lido Finance, the largest Ether staking protocol, is one of the first token issuers to approve deployment for the incentive system, offering to pay rewards in their own LDO governance token.
In summary, Maverick Protocol's incentive system makes it easier for token issuers to concentrate reward payouts to certain price ranges and build walls to maintain the stability of their assets, while allowing liquidity providers to earn extra profits from their capital. The system has particularly brought attention to Liquid Staking protocols and their derivatives, which are becoming all the more attractive for investors.
Liam Smith
- 2023-05-02
Maverick Protocol Introduces New Incentive System to Market Stablecoins
Maverick Protocol has rolled out a new incentive system designed to maintain the pricing peg of stablecoins and other digitally-secured assets. This encourages liquidity providers to deploy capital within certain price range and build price walls, helping attract traders and increase traffic.
