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GET Protocol's Liquidity
Liquidity is often an overlooked yet necessary piece of a protocol’s puzzle. Part of the ‘invisible’ nature of liquidity can be boiled down to its functioning. When liquidity is deep everything works just as expected but when there’s a shortage of liquidity it becomes very apparent.
Whilst liquidity is crucial for any project, for GET Protocol it’s amplified as we’ve consciously built our global ticketing infrastructure to remove all crypto & blockchain complexity away from the experience had by the event organiser and attendees when using our products.
Behind the scenes at the heart of GET Protocol’s NFT ticketing infrastructure is the $GET token that fuels every ticket issued through the protocol. The on-chain nature of the $GET token ensures a clear value flow, accounting and pricing for ticketing activity. But due to the very nature of the $GET token fuelling operations in the background, it is not an option for us to turn away ticketing integrators and event organisers because of low liquidity.
‘I’d love to use the protocol but I can’t buy in effectively’ are words we need to avoid at all costs.
Liquidity needs to flow at all times and be deep enough to support high throughput of on-chain ticketing & tokenomic activity. As such we’re always looking for ways to strengthen the liquidity available for the GET-ETH pairs on a long term basis and share in the collective evolution of liquidity capturing mechanisms as they are discovered and battle tested by the Web3 space as a whole.
GET Protocol has two types of liquidity capturing programs:
- Protocol Owned Liquidity
- LP Reward Program
GET Protocol's LP reward program is an incentive program launched in 2020 that rewards market participants that provide liquidity to GET-ETH pools on Ethereum and Polygon. This helps ensure the protocol has deep liquidity to draw from.
GET Protocol's Protocol Owned Liquidity (POL) launched on the 17th February through Olympus Pro. POL unlocks the ability for a protocol to own its own liquidity by acquiring LP tokens from market participants. This gives the protocol autonomy over the LP tokens & thus underlying liquidity that it accounts for.
A way of looking at the two liquidity programs is through the mental model of housing ownership vs renting.
The ideal situation for the protocol is to own its ‘liquidity house’ for perpetuity, mortgage free, instead of renting liquidity from market participants indefinitely.
On the flip side, a liquidity provider is often looking for a high yield in return for providing their liquidity and whilst that is a completely reasonable expectation, for a protocol that needs deep liquidity at all times to serve customers and clients, not being able to guarantee liquidity is a risk.
With Protocol Owned Liquidity you create ‘dependable liquidity’. When the protocol needs it, it’s available for use.
For the protocol, this provides several benefits:
- The protocol has autonomy over its LP, guaranteeing dependable liquidity
- The protocol can earn fees from trading activity; the more trading volume, the more liquidity grows.
- The $GET reward emissions that go towards incentivising liquidity providers can then be used to fund new initiatives that promote longevity and optimisation of the treasury and network effect of the protocol.
To learn more about GET Protocol's LP Reward Program:
To learn more about GET Protocol's Protocol Owned Liquidity: