What is Pangolin?

Pangolin is one of the most beloved cross-chan DEXs on Avalanche. Whether you need to collect your airdrop on Flare Network, then make a quick stop on NEAR Protocol, and trade back on Avalanche, Pangolin is the highway!

To explain Pangolin protocol, it’s important to mention that its general mechanisms apply to every other dapp. Pangolin is made out of a collection of smart contracts governed by the community.

Smart contracts are automated pieces of code that mediate the interaction between a user and the dapp. Whenever you interact with Pangolin, crypto tokens always remain in your possession. In order to access the protocol, users have to manually approve the smart contracts. You can think of it as a bot that performs the action you agree with based on a strict set of rules. This is an important difference compared to traditional finance, where the money is placed with a third party.

With smart contracts, there is no risk of a person running away with users’ money, or ever worse, locking up the money for any reason. Furthermore, anyone can access Pangolin regardless of their geography, political views, or religion — Pangolin doesn’t require KYC.

Transparency and decentralization are powerful tools to enable a thriving DeFi ecosystem. With the traditional limitations out of the way, an important question arises: “How does Pangolin become self-sustaining?”

Pangolin mainly derives its value from facilitating decentralized trades on several blockchains. In exchange for the service provided, Pangolin receives a small fee that goes into maintaining the protocol. Upon consulting with the community, core developers are usually in charge of implementing the protocol upgrades. This ensures Pangolin stays safe from hacks and the protocol adapts to market conditions.

As the number of transactions increases, the fees quickly add up. A portion of these fees goes into the protocol treasury, which pays for the developers, audits, and future products. Pangolin also has its own token called PNG. The token is used for governing the protocol, but it also serves as a reward to the liquidity providers on Pangolin.

The Pangolin treasury is secured by a multisig that is being held by the core team and key members of the Avalanche ecosystem. The holders of the multisig are publicly mentioned on their website. The multisig security mechanism is widely used in DeFi, as it makes protocols resilient to hacks. The attacker would have to get the majority of the signatures in order to impact the protocol, which is quite difficult. Generally, the keys are stored offline, and the variety of security mechanisms on each device make it close to impossible to accomplish.

The open nature of DeFi encourages protocols to cooperate and innovate. Pangolin is a unique protocol that has been in the making since early 2021. However, the protocol can still be vulnerable to hacks and exploits. Beyond the multisig scheme, there is always a possibility that a bug in the code goes unnoticed.

The code is publicly available to verify. Those who are tech savvy can audit the code for themselves and see precisely what the smart contracts do. Less technical users can indirectly assess the safety of Pangolin protocol based on audits and reports issued by technical community members. Fortunately, Pangolin has never been hacked. 

How does Pangolin work?

Under the hood, Pangolin uses the same AMM engine as Uniswap v2. Trading on Pangolin is facilitated via liquidity pools instead of the order book model. This mechanism enables traders to trade against a liquidity pool and become the "market makers" by providing liquidity. In exchange for the liquidity provided, users get a share of the transaction fees on the respective token pool, accompanied by Pangolin's native token PNG.

PNG has multiple use cases that are part of every aspect of the platform. For example, PNG is minted for users who provide liquidity on the protocol. These tokens can then be used for staking, or to participate in the governance process. 

Token holders get to vote on adjusting the protocol parameters, but more importantly, they get to add new farms. In the context of DeFi, farms equate to providing liquidity. For example, PNG holders have all the power to decide the liquidity rewards for a certain farm, and they can even vote to close it down if it poses any risk. Since LPs also get rewarded in PNG, the community has to be mindful of the reward allocation. Highly inflationary rewards can result in a drop in the value of PNG. On the other hand, the more users hold PNG, the more decentralized Pangolin is. 

Because Pangolin is a cross-chain DEX, its possibilities of reaching more users far exceed other DEXs on Avalanche. Users who want to move across different chains can do it directly via Pangolin if they wish to. The benefit of using Pangolin's bridge is that crypto funds can immediately be deposited into one of Pangolin's liquidity pools.

How to make money on Pangolin?

If you like farming for crypto, then Pangolin is the place to be. Here you can retire a yield farmer, and get extra PNG rewards on top of that. And if you feel like migrating to greener pastures, Pangolin can get your crypto on any chain for a small fee.

Pangolin Farming

Ready to settle for a simple life? With Pangolin, all you need is some spare crypto and time on your hands. Not that you have to put in any effort. Money works for you by providing liquidity to the pool of your choice. You see, other users want to live fast by doing swaps and combining different assets into mega trades. As a farmer, you collect your pay from the swap transaction fees. The Protocol will sprinkle PNG tokens into your wallet to reward your loyalty.

In order to make the most out of the farming experience, watch out for the liquidity in the pool you want to join. Pools with dwindling liquidity put you at risk of impermanent loss. Although the community is quick to react to such pools and close them down, you might be left holding the bag if some user empties the pools. So, make sure to keep an eye on your liquidity pool from time to time 👨‍🌾

To provide liquidity on Pangolin, follow these steps:

1. Open the Pangolin app

2. Click on the "Pool & Farm" tab on the left

3. Select the pool of your choice

4. Choose the amount of tokens you want to provide

5. Click "Add Liquidity"

6. Approve the transaction

7. Profit!

You may have noticed that on the left side there is a "Super Farms" tab. Super Farms have been introduced in 2022 with the goal of boosting the TVL of projects creating them. Unlike the regular liquidity pools on Pangolin, super farms also reward you with PNG tokens.

Pangolin Staking

With your freshly minted PNG, you can now go ahead and stake them into Pangolin to increase your PNG bag. 

To stake PNG, follow these steps:

1. Open the Pangolin app

2. Click on the "Stake" tab on the left

3. Choose the amount of PNG to stake

4. Click "Stake"

5. Confirm the transaction

6. Profit.

The APR on staking fluctuates depending on the total amount of PNG staked into the protocol. The APR can also be adjusted by the community to fit in with a more sustainable emission schedule. As Pangolin keeps integrating more pools on different chains, the APR will also adjust.

Price Prediction for Pangolin — Can it hit $1000?

Buying and hodling PNG — the native token of Pangolin — is one way of potentially making money on Pangolin.

By looking at its current price, it’s natural to think about the chance of PNG hitting $1000 per token. This can happen sooner, or way in the future, and is determined by a couple of ever-changing factors.

Let’s examine the potential growth of the PNG token by analyzing its tokenomics. PNG’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} PNG tokens being in circulation today, that means a price of {PRICE} per PNG.

How did we come to that calculation? It’s quite easy, the price of a PNG token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each PNG coin. 

By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of PNG at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for PNG to hit that price.

At a price of $1000 per token, that means the current market cap of PNG would equal ${{CIRCULATING_SUPPLY} * 1000}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $1000.

Now let’s shift our attention to the fully diluted market cap.

Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.

The fully diluted market cap represents the total value of a coin if all tokens were in circulation. PNG’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} PNG which means that no more coins above that number will ever be created.

These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.

How does this impact the price of PNG? Taking into account the current price of a PNG token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. PNG coins that have been burned are not taken into consideration because they have been permanently removed from circulation.

Whether it seems gigantic or not, the number we came to above only takes into account the current price of a PNG token. Doing the same calculation but with a price of $1000 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 1000} for the PNG protocol fully diluted market cap.

These are all crucial details to know when calculating if PNG can reach the price of $1000 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.

The future of PNG depends solely on its growth as a network used by tens and hundreds of millions of users.

If you’re looking to add some PNG to your portfolio, the most trusted places to get some are Binance and Coinbase.