Pantherswap — The groundbreaking formula that will destroy any value
Decentralised Exchanges and Automatic Market Makers — Part 1
Let’s take a breathe and be introduced to an idea that had all the revolutionary hallmarks of an idea that would take the world by storm and break the cryptocurrency world.
PantherSwap
Introducing PantherSwap, an Automatic Market Maker with built in incentives to promote long term holding. PantherSwap in the space of just four days broke into the top 2 defi dApps on the Binance Smart Chain, a meteoric rise to the top and easily becoming one of the top decentralised exchanges regardless of which blockchain. The price of Panther went from $0.03 to $5.23, producing a whoop 173x return and locking in 160 million in liquidity for all early investors in the space of five short days.
Let’s break down how their incentive mechanism captured this market:
- Burn Rate: 1% of transfer tax will be burned immediately
- Automatic Liquidity Rate: 4% of transfer tax will be added to the LP pool and locked.
These mechanisms help transfer wealth back to any holders of the native Panther token. The more activity there is on the token, the more beneficial it is to any holders of the Panther token.
Let me break down each of these incentives one by one
- Burn Rate: The transfer tax burn rate will cut off 1% of each transaction conducted on the protocol, reducing the supply of the token after each transaction. This is a deflationary metric, meaning the more transactions that occur on Panther, the less Panther will exist after the burn. This means the supply is consistently shrinking benefiting all current token holders.
- Automatic Liquidity: 4% of all transfer tax will be added back into the LP and is locked. This mechanism will split 2% of the original tax and also add 2% BNB to the Panther-BNB Liquidity Pool ensuring that Panther has a price floor and is always a liquid asset.
Note these transaction taxes occur on all Panther transactions. This means you will be taxed with a purchase, stake, unstake and a sell. This adds up to approximately 20% tax for a full scoped end to end transaction. On top of this Panther tokens at their height were offering a 40% daily yield and the price chart of panther was a straight line to the moon.
The downfall
Is this simply price manipulation by whales? Yes, it may be but let me explain to you why the current PantherSwap model does nothing but destroy your wealth and all those precious Satoshis you’ve stacked.
Wealth destroying oversight by the developers
Let me start by saying this is not intended as FUD of the token, but rather to encourage investors to be smart and learn the math. I’ve pointed out this flaw to the admins and the developers and they have not responded. It leaves me no choice but to encourage people to protect their capital until PantherSwap gets their act together.
Let’s start with the math of the tax of Panther transactions —
Remember this line — this was intended to create a price floor and enable liquidity for all Panther token holders.
- Automatic Liquidity Rate: 4% of transfer tax will be added to the LP pool and locked.
How does this mechanic destroy not only your wealth but all the wealth on the platform itself? Let me walk you through an example.
Imagine the price of Panther sits at $5 and the price of BNB sits at $500. This is a ratio of 1:100 for Panther/BNB Pair. Imagine there are 100,000 Panther transactions executed and tax is applied, portion burned and rest added to the LP. How does this work in the background?
1% is taxed and burned & 4% is taxed for addition to the LP
4% of the tax is taken in Panther of which 2% converted BNB and 2% Panther. This is then added to the BNB-Panther LP. To ‘floor the price’ & increase liquidity.
Did you spot the critical error on this?
The tax is originally 4% Panther, converting half to BNB.
The reality of this mechanism is as below:
- Sell Panther to BNB. The resultant price action on the pair Panther↓ BNB 🠑.
2. The number of Panther in the pool goes 🠑, BNB goes ↓ — Total LP value remains the same.
3. Each tax transaction is repeated with every single type of Panther transaction. The net effect of this and due to the nature that that LPs function, will eventually drain LP of all the valuable BNB and leaving the pool with only Panther.
- Did I mention in step 1 — the price of Panther goes down with each sale of the Panther token? Repeat this process with every single Panther transaction conducted. Again, this tax is on each purchase and sale, stake and unstake of which 4% goes towards this mechanism. That means 2% of all transactions creates sell pressure on Panther and buy pressure on BNB.
This mechanism creates recursive sell pressure on the Panther token whilst Panther continues to mint at an extraordinary rate of about 10% daily. This further compounds this effect and the amount of Panther in the ecosystem causing an increasing amount of Panther and inflation on the token. All this Panther will eventually enter the Panther-BNB pool which will consistently drive down the overall price of Panther. Eventually, the pool will consist of only an infinitely high number Panther and a small amount of BNB. Despite each stake being 2% Panther and 2% BNB from the tax mechanism. To further add, the taxing mechanism will prevent potential re-balancing that arbitrageurs and any algorithmic traders in the ecosystem from rebalancing the pools appropriately.
Be careful. It’s a jungle out there.
Thanks all.
I am by no means your source of truth and this is not financial advice. Please DYOR.
Part 2 — DEXs & Exchanges:
If you found this information useful feel free to donate my wallet address on the Binance Smart Chain.
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