Market Maker Fund (MMF)
Through the analysis above, the allocation of PAV is of great significance. Drawing lessons from many successful DEFI products, instead of locking all the PAV to prevent risks, it is reasonable to utmost limited funds for unlimited funds to maximize TiUSD users' interest. Therefore, in order to enhance protocol risk-proof ability and further reduce trading slippage, TiUSD Market Maker Fund mechanism (herein after referred to as MMF) is created. MMF will raise more market-making funds by incentive Market Maker with PAV.
MMF: Single Asset Yield Farming
For one thing, compared with the LP mining model, MMF participants do not need to bear the risk of Impermanent Loss by holding a certain token. Impermanent Loss will reduce their participation willingness. In terms of use of funds, MMF is more similar to traditional market makers issuing funds to raise money. Furthermore, MMF is free of punishment and users can choose to participate or exit from the MMF at any time. MMF will automatically divide profits according to the proportion of individual funds.
Besides, in the process of marketing make, the profit generated by the user is raised immediately. All the users' funds will enter the TiTi-AMM and be used for market-making in TiTi Protocol. Again, the maximum slippage caused by the Protocol:
The USDC balance X in the TiTi-AMM pool is:
It indicates that the USDC in the market-making pool will consist of two parts. One part is PRV, X_{reserve}. The other part is the Market Maker Fund, X_{mmf}. MMF increases the depth of the TiTi-AMM, reduces transaction slippage and further improves user experience. For MMF participants, it is a risk-free investment subject. TiTi holders, MMF participants, and the protocol itself can achieve a win-win situation.