ISSUAA, a next-generation DeFi protocol for trading derivatives of real-world and crypto-assets on the blockchain, is now live on Polygon.
ISSUAA Launches on Polygon
As per the announcement on September 27, the team said Polygon was chosen as the launching pad of choice for ISSUAA in order to release a low-cost, high reward yield farming and synthetics trading protocol.
At the same time, the protocol aims to build a vibrant, global community as ISSUAA is set out to carve a decent market share in the fast-growing and competitive DeFi scene.
ISSUAA prioritizes decentralization, adhering to the guiding principles of the blockchain as they roll out a synthetic, “ISSUAA Assets”, trading platform. However, the team is setting out ISSUAA as a community-driven and -governed on-chain DAO, offering derivatives of real-world and crypto-assets like stocks, precious metals, indices, commodities, and more.
As a decentralized platform, ISSUAA provides access to the DeFi marketplace through a single non-custodial wallet like MetaMask.
Polygon’s Value Proposition
DeFi is an umbrella term describing all financial activities which have been decentralized, operating on public ledgers. While Ethereum remains the home of DeFi, the launch of an alternative, scalable platform with EVM-interoperability has seen dApps shift base in search of low fees and high-speed transactions.
The low scalability in Ethereum has seen Gas –transaction fees– spike to unsustainable levels fast-tracking the migration to competing platforms.
Polygon is an interoperable and highly scalable EVM-compatible sidechain purposefully set to scale Ethereum. This way, it creates a symbiotic relationship with the pioneer protocols, benefiting its ecosystem as a result.
As of early October 2021, Polygon is one of the most active smart contracting networks. Its coin, MATIC, occupies a slot in the top-20.
ISSUAA: Low-Risk Yield Farming and Impermanent Loss Mitigation for Liquidity Providers
Besides activating in a low-fee environment, ISSUAA said their key focus is on capital efficiency maximization. Accordingly, they have revealed a next-generation version of a synthetic assets protocol that is superior to Synthetix and Mirror.
Their competitive edge, the team explains, lies in the elimination of the need to overcollaterize when providing liquidity in the ISSUAA AMMs liquidity pools. Moreover, the system also mitigates against impermanent loss when providing liquidity for long and short pools of the same underlying asset at the same time.
As a result of this approach, the protocol can offer low-risk yield farming. At the same time, liquidity providers stand to receive a share of the 0.25 percent trading fees charged on every trade in the ISSUAA marketplace.
In addition to a trading fee capture mechanism distributed to liquidity providers, ISSUAA is also distributing its ISSUAA Protocol Token (IPT) governance tokens to active liquidity providers every week.
The IPT Token: Voting Power, Reward Distribution, and Burning
There are 100 million IPT tokens as total supply, playing a central role in the ISSUAA ecosystem and DAO. The IPT token was fairly launched to ensure all stakeholders had a fair chance of acquiring and supporting the protocol. The project’s creators said the token serves two primary purposes.
On the one hand, staked IPT determines the voting power of the holder, who in turn can participate in the protocol’s governance and governance votes.
Holders can vote on the price of an asset at the time of expiry,, on the creation of new synthetic assets, if an asset that breached the limits of the protocol ought to be frozen, or even vote on which projects/developers can receive ISSUAA DAO Grants to build products centered on ISSUAA.
On the other hand, the IPT Token is – besides its function as governance token of the ISSUAA DAO – also linked to the cash flows generated on the ISSUAA marketplace, as a trading commission of 0.05 percent of every trade is kept for the IPT token, making the token more and more value bearing over time, thus accruing a kind of “inner value” or floor for the price of the IPT.