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The recent events in the DeFi market have proven that risk management and capital protection for LPs are essential to catalyse the growth of the space. Even for fully-backed stablecoins, panic in the market can trigger a run and lead to a potential peg deviation.
MantisSwap design features a novel mechanism to minimise losses due to the volatility risk associated with various pegged assets. This internal risk mitigation mechanism doesn’t rely on external data feeds (which are oftentimes not available for nascent tokens) and reduces the involuntary exposure of LPs to the assets in the Omnipool. Other single-sided AMMs using Asset Liability models depend on external oracles for price feeds of tokens to manually halt trading. This approach does not work as can be seen with the depegging of MIM and UST in the past where during the depegging the oracles could not provide correct prices and led to significant pool imbalance before the trades were stopped.