[ANN][DeFi] Haptic - Increase capital efficiency and reduce impermanent loss
Overview
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The haptic protocol is a system of smart contracts designed to increase capital efficiency and to reduce the impact of impermanent loss. Stakers lock Haptic network token (HAP) as a collateral, enabling the issuance of US dollar denominated debt. This pooled collateral model enables deep liquidity and eliminates the need for counterparts. Borrowers lock ETH collateral to obtain a stablecoin denominated loan from a third party procotol and the funds are used to provide liquidity on a external automated market maker platform. The protocol tracks impermanent loss and provides compensation to honest borrowers along with the majority of token swap fees generated by their liquidity. Stakers are rewarded for their role with staking rewards and a portion of the token swap fees. The system is built around composability principles and leverages existing protocols to achieve its functionality. |  |
Impermanent loss
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 | The price of an asset in a automated market maker (AMM) is the product of the reserves in a trading pair. Arbitrageurs are incentivized to exploit price differences between AMM and centralized markets by buying and selling assets from the smart contract, leveling the price and returning the market to the equilibrium state. Arbitrage can also happen between AMM and decentralized markets, even across different blockchains. In addition, blockchain extractable value (BEV) and predatory trades are becoming the norm in the DeFi space and they are a subject of study on their own. While current models preserve stability and retain liquidity, the cost of arbitrage equates to impermanent losses for liquidity providers relative to the true market price used by arbitrageurs. The losses are impermanent, because they are only realized if the liquidity provider withdraws liquidity during price volatility and they happen regardless of price direction. Given enough time, shifts in exchange rates could reverse the loss, or worsen it. Recently published studies pointed out that half of Uniswap liquidity providers are losing money due to impermanent loss. yearly distribution. |
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Haptic network token The Haptic network token (HAP) provides the collateral for the system and is used to compensate honest players and incentivize them to maintain their positions healthy. HAP grants stakers the ability to issue debt denominated in US dollars, proportional to the value of collateral locked. The protocol will lock and free collateral from the staker balance according to the global debt fluctuation. When a user wishes to release their escrowed HAP tokens, he mustfirst repay any outstanding debt. HAP is inflationary and the monetary policy will run across a five year period, increasing total supply from 100m to 250m, with yearly distribution. Afterwards, the protocol will switch to a flat 2.5% annual issuance rate. |  |
Roadmap
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| Q1/Q2 2022 | Q3 2022 | Q4 2022 |
| Community development Fundraise Protocol development Initial audit | Platform launch DAO launch L2 integration (Optimism) Extended audit | DeFi integrations Debt based primitives Multi-chain integration |
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Contact & Social links
| Official website | https://haptic.finance |
| Contact email | info@haptic.finance |
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