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Key participants
For Spin to operate as intended there are some essential external and internal parties to be included in the system. Read on to learn more!
Irreplaceable participants in the Spin system are Traders, Oracle, Liquidators, Liquidity Providers, Market Makers. The impetus for platform participants to follow the intentions of the system mainly consists of tokens. In this vein, the system is supported by a natural stimulation mechanism that contributes to the continuous operation of the platform.
Traders
Traders are the internal participants who have the right to interact with the platform and take part in platform-related events. In the broadest sense, traders are the immediate contributors to the volume, liquidity, and commissions on Spin. Among all traders, one can differentiate several types with different roles and goals such as speculative traders, arbitrageurs, and longer-term investors.
Stakers
Stakers actively participate in SPIN staking to participate in the incentive program by depositing assets to a staking smart contract.
Oracle
Oracle is an external participant, to whom specific roles and permissions are assigned by the Public Governance. Oracle extracts the price feed from the given data provider to ensure the authenticity and validity of the price of the collateral at that time. Price Oracles also have a crucial function in submitting timely data for the initiation of the liquidation process. To get consistent Oracle data, Spin derives collateral prices by accessing a decentralized Oracle Infrastructure.
Liquidators
The main assigned task of liquidators is to activate the process of liquidation. Any liquidator on the Spin platform can initiate the liquidation process of an undercollateralized vault. Liquidators play a prominent role in the act of liquidating the outstanding debt of collateral and therefore are key figures in the platform’s ecosystem.
Liquidity providers
Anyone can become a liquidity provider by providing liquidity to the USDC staking pool. By providing liquidity to the pool, providers can accumulate a much higher percentage of return with a risk of loss. This type of liquidity providing becomes a double-edged sword that with auspicious market conditions can, ultimately, be extremely profitable.
Spin also incorporates a traditional native token staking pool. Staking pool constitutes a traditional incentivized reward system that doles out Spin tokens and ensures a liquidity lock that prevents a sudden or steep price drop of the SPIN token.
Market makers
On Spin, Market Makers are the main actors in providing sufficient liquidity, which is crucial for the platform operability. Market Maker upholds price slide-off risk to be minimal and keeps it in a medial state that allows for adequate spread and a sufficient level of liquidity for traders.
There are also two other crucial tasks performed by Market Makers on the Spin platform. Market Makers can also take part in the liquidation process. With more users entering the platform, every user will have a chance to partake in the liquidation mechanism. At the same time, Market Makers maintain trades on illiquid strikes in the options section so users can employ every existing financial instrument even if no other users utilize the same set of instruments.
Last modified 1mo ago
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