PolkaSynth is a new type of DeFi protocol that seeks to explore the possibilities of soft pegged assets in the market. The network is built to be trustless, bankless, and non-dilutive. In this way, developers hope to provide speculative aspects to adaptive base-money with the end goal to provide a new form of building block for the DeFi (decentralized finance) sector.
Benefits of PolkaSynth
According to the platform’s whitepaper, PolkaSynth’s unique mission provides the market with some interesting benefits. For one, the platform introduces a supply-reactive cryptocurrency into the equation. This new asset, known as the PSNTH token, has the capabilities to respond to market demand daily. In this way, developers seek to maintain a soft pegged price point. Specifically, the token is pegged to the price of 0.1 LINK.
This approach relies on complex built-in algorithms to create what developers refer to as the “PolkaSynth economy.” This responsive ecosystem automatically adjusts its supply accurately to a fluctuating, constant-growth coin rather than a stable price like the US dollar.
In a traditional cryptocurrency scenario, your token is dependent on a single variable market with a fixed supply. Utilizing a multi-variable approach, developers can better safeguard the value of PSYNTH tokens and provide users with a more responsive digital asset.
How Does PolkaSynth Work
The PolkaSynth concept expanded upon the idea of an adaptive base-money first put forth from the popular DeFi platform, Ampleforth. Recognizing the shortcomings of pegging your token to an inflationary asset such as the dollar, PolkaSynth developers choose to soft peg their token to LINK. Chainlink was an ideal choice for this function due to its linear growth in the market.
At the core of PolkaSynth’s approach is its rebase functions. The network automatically expands or detracts the total supply of PolkaSynth every day at 10:00 PM EST. Every wallet holder has their balance overwritten in an amount that is changed depending on their percentage of the supply.
Notably, expansions occur when the target price of one PSYNTH token is less than that of the price of 0.1 Chainlink. Opposingly, contraction protocols kick in if the price is lower than the target price of 0.1 Chainlink. Importantly, the rebase has no direct effect on the price of the token. Keenly, the holders’ percentage of the total supply will never change during a rebase. Only the total supply of the network adjusts to retain its value.
The PSYNTH token is an Ethereum-based DeFi asset that can be used to send value globally. You can also stake your tokens to earn a passive income via the network’s mining protocol. In this way, PSYNTH represents a fundamental shift in how developers control the value of their assets moving forward.
PSYNTH Mining V6.9
The PSYNTH Mining V6.9 protocol functions by offering incentives to liquidity providers. As an on-chain liquidity provider, you earn rewards for your efforts. The longer you lock your tokens up in this protocol, and the more tokens you lock, the higher your rewards will reach. Best of all, PSYNTH developers also rely on some deflationary protocols including buybacks from the market. Lastly, 10% of the total supply of PSYNTHs is earmarked to the PolkaSynth foundation.
How to Use PolkaSynth
To get started using PolkaSynth, you need to provide liquidity to the Uniswap pool. Once you have done this step, you will then want to deposit $UNI-V2 tokens in the PSYNTH Mining V6.9 protocol. From there, your rewards will begin. In this way, the entire network operates in a simplistic manner that makes it ideal for new DeFi users.
PolkaSynth — An Innovative Concept in the Market
You have to hand it to the PolkaSynth development team. This project has an impressive collection of new and experimental concepts that, if successful, could reshape the way developers think when they consider the total supply of their project tokens. For now, you can join the PolkaSynth movement and start earning rewards today.
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