PnL Compensator

To balance out the PnL between LP and traders.

P&L Balancer Engine

The P&L Balancer Engine is a unique feature that offers support to the losing side (LP/Traders) on the PEX platform. By distributing xPEX tokens from the emission based on a mathematical formula that considers last week, the AEE aims to minimize the impact of losses and encourage more trading activity.

Mechanism

The PnL Compensator not only helps to reduce traders'/LP providers' losses but also brings them into the $PEX ecosystem, offering additional incentives for them to hold and engage with the token. As a result, this feature can boost user retention and stimulate further trading on the platform, ultimately leading to higher trading volumes and a more robust ecosystem.

As shown in the formula, when traders' performance is better than the LP providers, a PnL compensation is to be distributed to LP providers. Vice versa. If the traders' and LP providers' performance meets the equilibrium, a premium reward will be distributed to the PEX holder as awarding of the PEX holder's contribution to the equilibrium ecosystem

Benefit

  1. Reduce the traderโ€™s/LP provider's loss

The PnL Compensator mechanism helps alleviate the financial burden of trading losses for users on the PEX platform. By offering support through the distribution of $PEX tokens, traders are more likely to remain engaged with the platform and maintain their trading activities, even during challenging market conditions.

  1. Bring traders/LP providers into the $PEX ecosystem

By awarding $PEX tokens to losing traders, the platform incentivizes these users to explore and engage with the various features and services offered within the $PEX ecosystem. This increased involvement can lead to stronger community growth, fostering a more active and interconnected user base.

  1. Encourage users to trade more

The P&L Balancer Engine's support system can instil confidence in traders to continue their activities on the platform. As the impact of losses is minimized, traders may be more inclined to refine their strategies, experiment with new markets, and trade more frequently. This can result in higher trading volumes, which benefit the platform and the $PEX ecosystem by attracting new users and creating a more robust market environment.

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