Pangolin, the community-driven decentralized exchange for Avalanche (AVAX) and Ethereum (ETH) assets with fast settlement, low transaction fees, and democratic distribution, has announced a formal partnership with Olympus to create a unique, bonding program and co-marketing push.
The partnership with the Olympus Pro bond marketplace means Pangolin is the first-ever DEX on AVAX to execute a bonding program, enabling it to own its own liquidity in key markets. Bonding provides users with a way to exchange their liquidity provider (LP) tokens for Pangolin (PNG) governance tokens at a discounted rate. Because Pangolin never sells these tokens it ensures the liquidity remains locked within its treasury.
Through this process, the Pangolin protocol is no longer at the mercy of yield farmers whose interests are often misaligned with the goals of the protocol. Instead, Pangolin is able to solidify the longevity of key tokens on its platform, ensuring permanent liquidity and providing additional security for its user base. Additional benefits include reduced volatility that minimizes risk for users and increased long-term revenues for Pangolin, leading to accelerated innovation.
Bonds solve a number of key liquidity challenges for protocols, which traditionally set aside a large percentage of their native token supply to incentivize LPs. This results in significant sell pressure on farm tokens and goal misalignment between protocols and LPs, who are incentivized by high reward rates as opposed to the success of the protocol. When protocols succeed, another disincentive can occur due to the native token’s appreciation, leading to an impermanent loss scenario for LPs. And in times of uncertainty, LPs often look to remove their liquidity from the pool at the precise moment when the market needs it most.
Pangolin’s bonding program in partnership with Olympus eliminates those risks. With bonds, Pangolin users will be incentivized through discounted tokens to help the protocol succeed. This will lead to greater liquidity on Pangolin, ensuring it can support larger trades, better price stability, protect users against massive exits, and help it to attract more long-term holders. This will create an opportunity for Pangolin to unlock more revenue streams through captured liquidity fees and innovate on its own platform.
As the first AVAX project to offer bonds, the partnership with Olympus DAO will lead to greater exposure for Pangolin. Its bonds will be featured on the Olympus Pro X bond marketplace, a top 100 global project, bringing more ETH users to AVAX. Moreover, Pangolin will gain access to Olympus DAO’s experienced policy and marketing teams to raise awareness and ensure the success and long-term maintenance of the initiative.