LRP — Results After First Two Weeks

It has been two weeks since the Phase 3 launch, and today we use this as an opportunity to give a brief overview of the effects of turning Loss Ratio Peg on.

What Was Changed with Phase 3 Launch

More importantly, Loss Ratio Peg (LRP) was deployed and enabled to support loss ratio at 22.5% level. To learn more about LRP please visit our previous article and this gitbook document for the technical explanation.

First Two Weeks’ Results

Fig. 1 Supply ratio* change caused by Loss Ratio Peg algorithm in ideal conditions

(*Supply Ratio = PANA in Liquidity Pool/Total PANA Supply)

However, real-world results will differ from the simulation above as other factors like token swaps and adding/removing liquidity may happen at any time thus influencing the supply ratio as well. The next chart is built based on two weeks of on-chain data, and it supports that assumption.

Fig. 2 Supply ratio in the period from October 18th till October 31st

The chart above clearly shows LRP performing well, and the supply ratio declining from an initial 55% to 24% at the time of writing. It is worth noting that other actions happening in a liquidity pool may impact the time (both increase or decrease) needed to reach the target supply.

Next Steps

Stay Tuned!

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Pana DAO is the first crypto protocol built to facilitate parametric insurance using a model similar to the time tested Lloyd’s of London syndicate model

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Pana DAO

Pana DAO is the first crypto protocol built to facilitate parametric insurance using a model similar to the time tested Lloyd’s of London syndicate model