It’s been quite some time in the making, but we’re finally excited to be able to start presenting the information for the upcoming protocol idea that is Morphex — a huge leap forward from the capabilities of Morpheus Swap.
Morphex will be a decentralized exchange with low swap fees and no price impact for spot and perpetual futures trading, requiring only a wallet connection to use. All trades, in the beginning, will be facilitated through a singular liquidity pool that consists of multiple whitelisted assets with different weights, and in the future, will be expanded to allow for multiple liquidity pools with tokens of different categories (for example blue-chip assets, stablecoins, interest bearing tokens, etc.).
A user would be able to provide liquidity with any whitelisted asset, and in exchange, they would receive “Morphex Liquidity Provider” tokens, or “MLP” tokens. With these MLP tokens, the liquidity provider would effectively own an index of crypto assets that are generating yield through revenue from swaps and leverage trading. By providing liquidity in an asset of their choice, the user will own a percentage of the total pool AUM (assets under management), proportional to the amount of liquidity they provided. Initial examples of whitelisted assets include FTM, ETH, BTC, and a variety of stablecoins.
If leverage traders make a loss, then MLP holders will make a profit, as they are providing the liquidity for trading (this also works in reverse, if traders are profitable). Assets in the MLP pool will be rebalanced to help hedge providers based on the traders’ open positions, ensuring positive crypto exposure. The MLP token’s price will be determined by the value of all pool assets while factoring in all opened positions (profits and losses).
Pricing for the protocol will be determined by an average of prices from leading centralized exchanges in conjunction with Chainlink oracles. This also means that the protocol will be limited to being able to only whitelist assets with Chainlink price feeds. As the protocol matures, governance will eventually decide the majority of parameters (examples include liquidity incentives for a specific MLP pool).
We’ll be releasing the tokenomics and PILLS migration information in the coming days, so stay tuned!
