As the crypto industry faces challenges, Polygon is shining with its partnerships and product launches. Now the network is adding the first non-monetary base token, WMATIC. Additionally, Deri Protocol, the new derivative protocol on the Polygon network, adds the token.
The Deri protocol supports multiple base tokens to offer liquidity to LPs and deposits to traders for margin. The whole process is known as the liquidity and dynamic mixed margin framework. The framework allows derivatives trading to achieve optimal capital efficiency, even higher than centralized exchanges.
Although the Deri protocol is a novelty in itself, the protocol added another intuitive product to Polygon. WMATIC is the first non-cash base token, which will propel Polygon’s development game Defi off the charts. With integration, the Matic Price Prediction shows rapid market growth.
Using WMATIC over the Deri protocol
Currently, WMATIC holders can deposit WMATIC coins into mining pools as liquidity to strike DERI. For example, Alicia is betting 2,000 WMATIC tokens on the ETHUSD, BTCUSD / WMATIC pool. Along with the DERI rewards, Alicia can also collect fundraising fees, transaction fees, and even the shared value of the remaining liquidated position in the event of a loss. The Deri protocol reflects gains from the Profit and Loss metric. The protocol even provided a guide for understanding and undertaking the process of internal liquidity pools.
Traders can also use WMATIC tokens to trade ETHUSD, BTCUSD contracts. For example, Alicia uses WMATIC tokens as margin and wants BTCUSD on the pool. Taking into account the parameters, several scenarios can take place:
- If the price of Bitcoin improves against the US dollar, Alicia sees a profit after the position is closed.
- Conversely, if the price of Bitcoin deteriorates against the US dollar, Alicia gets fewer WMATIC tokens after closing the position.
Adding reliable tokens as building blocks can help both the Deri protocol and the Polygon network. This will allow platforms to expand their Defi range and quickly improve the user experience. Additionally, the integration will add to Polygon’s value proposition, allowing the network to stabilize. With development, Defi-based projects on the Polygon network can create better frameworks to support the adoption of Defi and blockchain globally.
The Deri Protocol’s expertise in risk exposure and capital efficiency, combined with Polygon’s simplicity and executive development, will help the industry grow tremendously.