The Meridian Liquidity Pool is the multi-asset liquidity pool for both zero slippage swaps and leveraged trading. The MLP token is the Meridian liquidity provider token and can be minted using any of the tokens within the liquidity pool. In return for providing this liquidity MLP holders receive a proportion of the fees earned by Meridian Trade.

The MLP token price is determined by the total value of all tokens within the pool after factoring in the profits and losses for all currently opened positions

MLP Target Asset Allocation

The target asset allocation within the pool is

  • 55% ETH

  • 35% USDC

  • 10% USDM

The MLP asset ratios are dynamically managed by the protocol to ensure that sufficient liquidity is maintained. This is achieved by adjusting the fees paid by users for swapping, depositing and withdrawing assets. Transactions that improve the allocation ratios will have lower fees than transactions that have a detrimental impact on the ratios.

MLP Utilization

Maximum Asset Utilization

Users can open a long position by depositing an amount of the trade token as collateral. A snapshot USD value of this collateral is taken when the position is opened. To ensure the MLP has sufficient funds to pay out any profits, an amount of the traded token equivalent to the position’s size (collateral x leverage) is marked as reserved. In order to maintain ongoing liquidity each asset within the MLP has a maximum utilization rate of 60%. This ensures that, at any given time, for any token, a maximum of 60% of the MLP balance can be reserved.

Maximum Global Short Sizes

Similarly, users can open a short position by depositing an amount of stablecoin as collateral. When a short position is opened an amount of stable coin equal to the position size (collateral x leverage) is marked as reserved to pay for any profits on the position. The maximum value of stablecoins that can be reserved at any given time is set to 40%. This limits the total value of short positions that can be placed on OmniTrade and protects the MLP liquidity.

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