Wrap Protocol Merges With Plenty DeFi: What Does It Mean for Tezos
Last week, the developers of Wrap Protocol announced the merger of the project with Plenty DeFi. The Plenty team presented a roadmap for Wrap's further development: they plan to create new cross-chain bridges, rename old assets, and launch a new token dubbed PLY.
In this post, we talk about what happens now with WRAP and PLENTY tokens, what wrapped assets will appear on Tezos, and how the ecosystem will benefit from the merger.
Rethinking of Plenty
Tezsure originally launched Plenty to test the possibilities of profitable farming and attracting liquidity from Ethereum using the Wrap Protocol. The experiment was a success.
Now the Plenty team is planning to build an all-in-one DeFi platform with asset porting, trading, earning, and borrowing, all while having community governance.
The developers believe that by unifying the bridges, Flat Curve AMM, cTez and checker, they will have created one of the most comprehensive DeFi protocols on Tezos.
The first step toward the goal will be the launch of cTez, a synthetic tez. Delegating to Tezos can be a challenge if the contract holds assets of multiple users. A wrapped version of tez would be useful in such situations if it satisfies the conditions:
- interchangeability — the wrapped asset and the original asset are interchangeable;
- decentralization — the solution does not reward specific bakers;
- benefit — users don’t miss out on the benefits of delegating.
Fulfilling two of the three conditions is easy. Delegating aside, a contract for wrapping tez that simply stores the funds received would work out fine. If you don’t worry about interchangeability, you can allow users to create their own stoves to produce synthetic tez. And if you don’t care about decentralization, you can transfer the right to decide which baker to delegate funds to.
cTez can satisfy all three conditions with math. And to simplify the use of cTez, Plenty wants to run a Flat Curve AMM. At equilibrium, users can buy 78% of the pool with a slippage of less than 5%. The contract is now being audited and can be tried out on a testnet.
Everyone, Meet PLY
Wrap Protocol is a decentralised app transferring assets between Ethereum and Tezos blockchains developed by Bender Labs.
Plenty DeFi is a DeFi system for farming, liquidity mining, and token exchange developed by Tezsure.
Wrap Protocol has the native token WRAP, while Plenty DeFi has PLENTY. Both tokens are used for staking and rewarding.
After the merger, the developers will merge these tokens into one which is called PLY. PLY holders will manage the newly formed DeFi platform through votes within the DAO.
WRAP and PLENTY token holders will be able to exchange them for PLY in the Plenty app. The number of PLYs available for exchange will be determined on the basis of the old tokens’ capitalisation.
The protocol teams have promised to explain the PLY tokenomics in a few weeks.
Plenty + Wrap = Plenty.network
The merger will be complete with the launch of Plenty.network, a major platform for farming, trading, wrapping tez in cTez, and transferring assets between different blockchains.
The protocol merger will have several stages:
- The right to control the Wrap Protocol will go to the Tezsure team. They will also gain control of Signers Quorum which validates transactions for smart contracts of bridges in Ethereum and Tezos. The Wrap community will be redirected to Plenty.
- Plenty and Wrap Protocol will launch a bridge between Tezos and Avalanche. Wrapped assets will be named using the [ticker].[blockchain] template. For example, USDC transferred from Avalanche will be called USDC.a. Plenty will also launch Flat Curve AMM to exchange tez for cTez with a minor impact on the exchange rate.
- Plenty will rename the existing Wrap Protocol tokens. For example, wCOMP will become COMP.e. Plenty will launch more Flat Curve AMMs to easily exchange assets of the same value, such as USDC.a to USDC.e, as well as more pools to trade the transferred assets among themselves and paired with cTez.
- Developers will release a PLY token and start exchanging it for PLENTY and WRAP. The final step is to relaunch Plenty DeFi in the form of the new Plenty.network platform and discontinue the standalone Wrap Protocol.
The Plenty team also shared their plans:
- launch of new farms with curve-like voting;
- bridges with Polygon and Binance Smart Chain;
- a mechanism for the use of bonds;
- decentralized loans.
Plenty will also provide more opportunities for the community to govern the project. For example, users will be able to vote to change the rewards for mining liquidity or the Plenty.network tokenomics.
How the Merger of Plenty and Wrap Can Impact Tezos
First, Wrap Protocol users will not lose anything. Wrapped assets will remain in their wallets, the existing bridges with Ethereum will continue to work, and the frozen tokens will not disappear from Ethereum contracts.
Second, the protocol merger in Plenty.network and the launch of the PLY token will allow developers to adjust tokenomics based on the experience gained.
Third, Plenty.network will be able to evolve faster than Plenty and Wrap separately. In addition to the bridge with Avalanche, the teams plan to launch bridges with other popular blockchains, as well as decentralized loans and other financial services in 2022. The new platform seeks to become the largest DeFi-protocol on Tezos.
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