What is Parifi?
Protocol, Interface & Token
Last updated
Protocol, Interface & Token
Last updated
Navigating the various facets of "Parifi" can be initially perplexing for those new to the platform. Here’s a breakdown to clear up any confusion:
The Parifi Protocol: A robust suite of smart contracts that are immutable and non-upgradeable, forming a system designed for the perpetual trading of a diverse range of assets on-chain, across Ethereum Virtual Machine (EVM)-compatible blockchain networks.
The Parifi Interface: Designed for seamless interaction with the Parifi Protocol, this web interface is one of several methods to access and use the protocol's capabilities.
The Parifi Token (PRF): As the utility token in the Parifi ecosystem, PRF streamlines transactions by enabling the payment of gas costs, offering an efficient alternative to native blockchain gas costs. This positions PRF as a versatile tool within the ecosystem.
Account abstraction in Parifi allows using PRF instead of native blockchain gas tokens, improving accessibility and promoting engagement within the ecosystem.
Staked Parifi Token (PRF): PRF tokens, when staked in the 80/20 Balancer pool, enhance the liquidity and market stability of PRF. This staking method strengthens the protocol's robustness and is a step toward Parifi's vision of gradual decentralization. While governance features will not be enabled right away, this approach sets the foundation for future active engagement of token holders in decision-making processes. It will eventually influence the integration of new features, market growth, protocol direction, and the implementation of upgrades. Additionally, stakers benefit directly from swaps within the pool and receive a share of the protocol's revenue, further incentivizing their participation in the Parifi ecosystem.
The pfTokens issued by the Parifi Vault (Pools) include pfUSDC and pfETH, representing distinct types of vault tokens in the protocol adhering to the ERC-20 standard. These tokens are allocated to liquidity providers who contribute to the respective liquidity pools:
pfUSDC: This token is issued to those contributing to the USDC-based stable vault. It's designed for liquidity providers who prefer a more stable, less volatile asset as their base for providing liquidity.
pfETH: Conversely, pfETH is provided to contributors of the ETH-based volatile vault. This option is tailored for liquidity providers who are comfortable with higher risk and the potential for greater returns, owing to the inherent volatility of ETH.
Fungibility: Both pfUSDC and pfETH are fungible tokens, which is a crucial characteristic of liquidity pool tokens. Fungibility ensures that each token has the same value and can be exchanged on a one-to-one basis. This is essential for liquidity providers, as it allows for the standardized tracking of their share in the pool.