Plutos Network

Plutos Network AMM structure for trading Synthetics

What is AMM?

An automated market maker (AMM) is a system that provides liquidity to the exchange it operates in through automated trading.

AMM systems took off after they were first implemented by Shearson Lehman Brothers and ATD in the early 1990s — before their invention, order books were created by humans who manually initiated trades meant to enhance the liquidity of the market.

What are Synthetics Assets?

Synthetic assets are essentially tokenized derivatives. In the traditional financial world, derivatives are representations of stocks or bonds that a trader does not own but wants to buy or sell. In essence, if you want to profit from the price fluctuations of a stock that you don’t own, you can do this through a derivative. Synthetic assets, or tokenized derivatives, take this process one step further by adding the record for the derivative on the blockchain and essentially creating a cryptocurrency token for it.

In essence, synthetic assets create a blockchain record for the relationship between the underlying asset and the purchaser.

About Plutos Network AMM for Synthetic trading

“Plutos Network applies pAMM mechanism during the trading of products such as options, swaps, contracts etc.

After users place collaterals in assets supported in the Plutos Network, for example, pETH, pUSD etc, the users can trade the synthetic products provided, without any worries about latency or big slippage.

The traditional order book is replaced by liquidity pools that are pre-funded on-chain for both assets of the trading pair. The liquidity is provided by other users who also earn passive income on their deposit through trading fees based on the percentage of the liquidity pool that they provide.”

About Plutos Network

“Plutos Network is a decentralized cross-chain derivative issuance and trading platform which provides infinite liquidity based on the schemes of Staking and Minting and leading Blockchains like Solana, Polkadot and BSC. With Plutos, all users can have access to synthetic assets from both traditional financial market and the crypto market. By enabling cross-chain and on-chain functionalities, Plutos will be able to deliver keynote features such as scalability, high interoperability, low cost of transactions, offering the perfect solution for current DeFi derivative market to difficulties and limitations such as high gas fee, low transaction speed, vulnerability of hacking such as flash loan etc.”

John Joseph