PlutusSwap — An exchange to help the unbanked?

PlutusSwap, a new decentralized exchange that claims to help "bank the unbanked and unbank the bank", with an improved market-making design and their native blockchain.

PlutusSwap — An exchange to help the unbanked?

PlutusSwap is an upcoming new swap exchange (similar to Uniswap). Owned by Plutus Capital (a Chinese firm), it promises to be integrated in a existing ecosystem and onboard an existing user-base.

Plutus Capital aims to do a lot under their mission: Bank the unbanked, unbank the banks. But how much can an exchange really contribute to this mission? Let's find out.

As I understand it, Plutus Capital has an existing lending platform app with a total value of $6.2M spread over 1490 monthly active users. The goal is to integrate the existing users and funds into PlutusSwap, generating sustainable liquidity.

Evidently, their most intriguing idea is the improved automated market-making (AMM) design, which they claim would reduce the exposure to impermanent loss (IL). If proven successful, it could drastically improve the DeFi space forever (Source).

Unlike the existing bid/ask system to fulfil trades on centralised exchanges, AMM based exchanges use a DEX (Decentralised Exchange) protocol to pool two different tokens and allow users to trade/swap one token for the other. Users will not need to wait for a counterparty to accept an offer or specify a price in order to execute a trade. (Source)

No details were shared about how this could work, but I was told that a technical whitepaper is underway to explain this process further. The only thing clear is that this improved AMM design will only be available on their native blockchain, Plutus Chain, which is scheduled to launch sometime in Q4 2021.

Plutus Capital products

  • Lending app (Live)
  • Plutus Chain (Q2 2021)
  • PlutusSwap (Soon™)

Presale Schedule

The yPLT pre-sale is running for 5 days, selling an allocation 20 ETH per day with a daily increasing price per yPLT. The value is pegged against ETH at a fixed price of $350/ETH.

  • 2 October 2020:: 1 ETH = 700 yPLT (~$0.50/yPLT)
  • 3 October 2020: 1 ETH = 637 yPLT (~$0.55/yPLT)
  • 4 October 2020: 1 ETH = 583 yPLT (~$0.60/yPLT)
  • 5 October 2020: 1 ETH = 538 yPLT (~$0.65/yPLT)
  • 6 October 2020: 1 ETH = 500 yPLT (~$0.70/yPLT)

The sale is exclusively conducted on Bounce.Finance. Every wallet can only purchase 5 ETH, and Uniswap trading will launch 1 day after the pre-sale as ended.

Mining Schedule

PlutusSwap farming will mine yPLT very fast during the Genesis phase, after which the distribution will slow significantly. All tokens should be minted within 8 years of the launch.

  • Genesis Mining: 100 yPLT/block for 50,000 blocks(~7 days)
  • Stage 1: 10 yPLT/block for 5,000,000 blocks(~1.9 years)
  • Stage 2: 5 yPLT/block for 5,000,000 blocks(~1.9 years)
  • Stage 3: 2.5 yPLT/block for 5,000,000 blocks(~1.9 years)
  • Stage 4: 1.25 yPLT/block for 5,000,000 blocks (~1.9 years)

Available pools

  • yPLT/ETH (x10)
  • yPLT/USDT (x10)
  • USDT/ETH
  • USDC/ETH
  • UNI/ETH
  • PICKLE/ETH
  • CORE/ETH
  • AMPL/ETH
  • LINK/ETH

Most interestingly, we can see a CORE/ETH as well as a PICKLE/ETH pool here. Not sure on what criteria these pools were chosen, but they provide you with a wide spectrum of Uniswap liquidity provider tokens you can farm with.

Tokenomics

This is were the disappointment starts setting in. PlutusSwap and their yPLT token simply doesn't do anything different right now. The most interesting part could be the improved AMM design which has no details yet and won't be usable until their Plutus Chain launch later in 2021.

The token is virtually a copy of Uniswap/Sushi, for a copy of Uniswap/Sushi. The only other benefit I can see is an existing user-base which could bring sustainable trade volume. If that is valuable enough, I'll leave up to you.

Token Facts

The plan is to have 10% of the total supply (10M yPLT) pre-mined, partly for the pre-sale, and partly for the team/liquidity/marketing/etc. Only 59,160 yPLT are available on the pre-sale — that's 0.05916% of the total supply.

Everything that isn't sold, provided for liquidity or allocated for the developers will be locked for 30 days. Community voting will then decide what to do with these funds, while all unused funds will be burned completely.

Takeaways

While an improved AMM design sounds like a breakthrough that we should all be excited about, the actual information is lackluster at best. There are also several concerns which I simply couldn't address enough to get this over the line.

Concerns

  • Dev-share: 5% of all mined tokens go to PlutusSwap. I do understand the need for compensation, but this one is rich. Putting it into perspective, of the 10,000,000 yPLT mined, only 59,160 are for sale while 500,000 go to the team. No vesting or time-lock in place.
  • GitHub: I've only seen one project, Plutus Core. It only had 12 commits and the last one was over 5 months old (Source). The team tried to clarify this was only a bootstrap and that they spent more time to build the Lending app, but  since the latter is closed source, there is no way to verify.
  • Bank the unbanked: While they mention it in several places, PlutusSwap does absolutely nothing to address this mission. I honestly don't even see how Plutus Capital and their lending app contribute to it, either.
  • Tokenomics: Very weak. This would only be interesting if there was vast adoption. Governance and revenue share for something that doesn't have m/any users has no value.

Final thoughts

If you know the tokenomics of something like SUSHI or CAKE, you know them for PlutusSwap. I really wish they had come up with something juicier to ease the wait for the blockchain, or simply implemented their AMM design on Ethereum.

Personally, I will not participate in the pre-sale. Will you?

Let me know what you think on Telegram.

— Robin