What IsParrot Protocol (PRT)?

Parrot Protocol is a DeFi network developed on Solana, including the stablecoin PAI, a non-custodial lending market, and a margin trading vAMM (Virtual Automated Market Makers). Virtual Automated market makers (vAMM) solve the limitations of AMM by radically expanding the application space of AMMs and enabling perpetual contracts.

The Parrot protocol aims to make value locked in DeFi systems accessible. As per its research, billions of dollars of value are currently locked in hundreds of DeFi systems, which are converted into yield generating tokens, like Uniswap LP tokens or the AAVE yield-bearing tokens. As LP tokens, their value is locked in DeFi, which is inaccessible because their unit of account is unsuitable for human consumption.

As a solution to this problem, Parrot Protocol was created to make value locked in LP tokens accessible by creating a liquidity and lending network collateralized by these LP tokens. The planning for the solution includes:

• Firstly, creating the PAI stablecoin, backed by LP tokens as collaterals. This stablecoin acts as a common unit of account, making it easy for holders of different types of LP tokens to transact with each other.

• Secondly, creating the Parrot Lending market, taking LP tokens as collateral. The Parrot lending market allows LP holders to access their locked value by borrowing against lender liquidity.

• Thirdly, creating a margin trading product (virtual AMM) using PAI as the common unit of account. This trading product allows the Parrot community to collect fees and feed the family.

Parrot claims to support USDC and USDT deposits, and users can generate 100 PAI for every 105 USDC (or USDT) collateral. The Parrot protocol collects fees from the services and uses them to buy PRT on the open market and cycle back them as protocol incentives. PRT is the governance token of Party Parrot, which is majorly used to incentivize the users and attract them to the platform. PRT token is also used to incentivize an insurance pool, which may backstop any shortfall in the lending market. The fees are received through three main sources:

• Stability fees collected via stablecoin PAI

• Interests borrowed on the PAI supply

• Trading fees for the vAMM

• Borrow fees collected on the lending market

• Liquidation penalties 

The total supply of PRT tokens is 1,000,000,000.