Shell Protocol Airdrop Review: The Oldest Form of Money is now the Newest

Shell Protocol Airdrop Review: The Oldest Form of Money is now the Newest

About Shell Protocol Airdrop

Shell Protocol Airdrop is a decentralized exchange (DEX) that facilitates low slippage stablecoin swaps. Shell Protocol utilizes the structure of an automated market maker (AMM) to enable trustless trading through a liquidity pool.

Shell Protocol doesn’t have an own token yet but could launch one in the future. Making a swap or providing liquidity may make you eligible for airdrop if they launch an own token.

The objective of the Shell Protocol is to create an internet monetary system using stablecoins asbuilding blocks. The first release is a liquidity pool optimized for stablecoin-to-stablecoin trades.It has weights, deep liquidity, protections against a broken peg and dynamic fees. It can also provide liquidity directly between stablecoin derivatives such as cTokens and aTokens.

The goalfor this iteration is to develop a frame work for flexible bonding curves that can adapt to newuse cases and market conditions. Liquidity provider shares are called “shells” because they are containers for the value held by the pool.

Shell Protocol Airdrop Just as living shells are containers for the organ is min side. Shells are natively liquid, diversify exposure and earn yield. They have the potential tobecome the primary means of storing and transacting value.

BasicDetails
Token NameShell Protocol Airdrop
PlatformN/A
Airdrop Starts24/7
Token Per ClaimN/A
KYCKYC Is Not Requirement
WhitepaperClick Here To View
Max. ParticipantsUnlimited
Collect AirdropClick Here To Collect Free Airdrop

Step-By-Step Guide

  1. Visit the Shell Protocol dashboard.
  2. Connect your ETH wallet.
  3. Now make a swap or provide liquidity.
  4. Shell Protocol doesn’t have an own token yet but making a swap or providing liquidity may make you eligible for an airdrop if they launch an own token.
  5. Please note that there is no guarantee that they will do an airdrop to the early users of the platform. It’s only speculation.

Description of Shell Protocol

There are five dimensions along which Shell liquidity pools can be configured:

  1. Ideal weights for reserve stablecoins (w)
  2. Depth of 1:1 exchange (β)
  3. Price slippage (elasticity) when not 1:1 exchange (∆)
  4. Maximum and minimum allocation of each reserve (α)
  5. Fees (, λ)

Reserve weights

Each stablecoin reserve in the pool has an ideal weight, w. It determines what percentage ofeach reserve the pool wants to hold. If w = 0.5, then the ideal weight for that reserve willbe 50% of the total reserves held by the pool. The first Shell pool deployed will be 30% DAI,30% USDC, 30% USDT and 10% SUSD.

When a pool is “balanced”, actual weights are close toideal weights, the pool functions as a constant-sum market maker. The sum of all the balancesremains unchanged before and after a swap. Exchange between stablecoins will be 1:1 and therewill be no slippage except for a fixed fee

Protection from a broken peg

To guard against a broken stablecoin peg, the pool has a minimum and maximum allocationfor each reserve. This allocation is determined by α. The higher the value of α, the lower theminimum allocation percent and the higher the maximum allocation percent. If the ideal weightfor the reserve is w = 0.25 and α = 0.8, then the pool will not accept any transaction thatincreases the actual weight of the reserve beyond 45%.

Without this constraint, a broken peg would drain the entire pool as traders will continue to add the worthless stablecoin and removethe viable stablecoins until there is no value left. Without setting a threshold for each stablecoin,then diversifying reserve assets will make a pool riskier because it only takes one broken peg tocompletely drain the pool. This is the case with AMM protocols such as Curve, Uniswap[2]and Balancer[19]. Because Shell pools have a minimum and maximum allocation parameter,diversification can actually reduce, rather than increase, risk.

Yield

The pool earns yield for shells by charging a fixed fee,  and a dynamic fee, λ. Every timevalue leaves the pool,  percent of that value is retained, accruing directly to shells. In addition,the pool also charges a dynamic fee on any transaction in the price slippage zone.

In other words, the more a stable coin deviates from its price peg, the higher the bid/ask spread becomes.As discussed, any transaction that takes a reserve too far past its ideal weight will incur anon balancing penalty. Conversely, any transaction that brings a reserve closer to its ideal weight when starting in the slippage zone will be awarded a rebalancing subsidy.

Unbalancing the pool incurs slippage; rebalancing a pool incurs anti-slippage. A parameter, λ, determines the difference between the unbalancing fee and the rebalancing subsidy. The difference, (1 − λ), is retained by the pool as a dynamic fee. If λ = 1, then there is no dynamic fee. If λ = 0.5, then the dynamic fee will be half the price slippage.

The Shell protocol formal model

They are now ready to formalize the Shell Protocol model for liquidity pools. The formalism willfirst cover the key terms, behaviors and parameters of pools. Then it will explain how the protocolcomputes deposits, withdrawals and swaps. For a less mathematically driven explanation of howthe model works, see Section 3.

Deposits and withdrawals

The advantage of defining the pool’s logic in terms of a utility function is that it becomes relatively straight forward to construct our three main behaviors: deposits, withdrawals and swaps. This section will focus on deposits and withdrawals. Recall that for deposits, the depositor adds reserve tokens to the pool and receives shells in return.

The pool logic must therefore deter minea conversion rate between the tokens added and the amount of shells created. For withdrawals,the pool must determine a conversion rate between the shells redeemed by the withdrawer and the amount of tokens removed from the pool.