Yield farming platform Matter DeFi aims to increase liquidity on SpicySwap

Matter DeFi

Two months ago, the decentralized exchange “SpicySwap” launched on the Tezos mainnet. Well, yield farming platform Matter DeFi aims to increase the incentive for users to provide liquidity on SpicySwap.

Matter DeFi will have LP token farms where users can earn MTTR tokens. Artificial buying pressure is created through an automated buyback mechanism to positively impact the value of MTTR.

Liquidity on SpicySwap

On any exchange, liquidity is important for a stable user experience. When liquidity is low, slippage is high, which simply means that an average-sized buy or sell can heavily impact the price and offer the buyer/seller less value for their transaction.

Anyone can add liquidity to a DEX. The main incentive to do this is that people providing liquidity earn a percentage of the trading fees charged by the DEX.

However, when liquidity is low, the trading volume is also likely not to be as high, resulting in low fees and therefore low revenue for liquidity providers. Liquidity can be increased by making it more rewarding for users to add liquidity.

This is where Matter DeFi comes in.

MTTR token

When you provide liquidity, you automatically have liquidity pool tokens (LP tokens). Matter DeFi will have farming pools where people can farm their LP tokens and earn free MTTR tokens.

The value of the MTTR token will be positively impacted by an automated buyback mechanism. There is a 5% fee for staking and unstaking on the platform.

All fees generated by Matter DeFi are automatically used to buy back and burn MTTR tokens. So, every staking and unstake action on the platform leads to the buying and burning of MTTR tokens, creating automated buying pressure and reducing the current circulating supply.

IFO and MTTR Liquidity

In order to create an MTTR liquidity pool, an Initial Futures Offering (IFO) will be held where people can buy future MTTR tokens (dMTTR tokens).

MTTR tokens will be distributed to dMTTR holders after the IFO. All XTZ accumulated in the IFO is used to create a MTTR/WTZ liquidity pool on SpicySwap.

This should ensure a healthy level of liquidity for MTTR trading right from the start. The LP tokens from this pool are burned, locking the value in the pool forever. This guarantees that MTTR liquidity will not suffer.

The MTTR IFO takes place on Wednesday 15th December.

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