Ellipsis (EPX) is an authorized fork of Curve.Fi. Its 1.0 version has been providing users on the BNB Chain with Curve's stable swap protocol. The 2.0 version aims to bring additional dimensions of Curve to the Ellipsis ecosystem.
EPX token holders can lock their tokens to gain voting weight. This weight can be used to vote on adding rewards to specific liquidity pools and to direct incentives to preferred pools. Locking tokens also determines the level of APR boost applied to a user's liquidity provider rewards.
Understanding Ellipsis Finance
Ellipsis Finance is an Automated Market Maker (AMM)-based decentralized exchange within the BSC ecosystem, specializing in stablecoin trades (BUSD, USDC, USDT, DAI, etc.). Launched in March 2021, it operates as an authorized fork of Curve Finance. Developed with support from the Curve Finance team, Ellipsis is committed to upholding the core values that define the Curve brand.
As a non-custodial platform, Ellipsis ensures that developers have no access to user assets. It functions as an official branch of Curve Finance, initially supporting swap pairs for BUSD, USDC, and USDT.
How Does Ellipsis Work?
Ellipsis Finance utilizes a model similar to Curve Finance but with some distinct differences. Its operational mechanics are as follows:
Using an AMM mechanism, assets on Ellipsis are not traded via an order book. Instead, swaps occur within liquidity pools based on a smart contract formula designed to guarantee extremely low slippage. Secondly, Ellipsis employs these liquidity pools and offers rewards to the liquidity providers (LPs). Every transaction on Ellipsis Finance incurs a small fee, a portion of which is distributed evenly among all LPs.
The trading fee is split into two parts: 50% is provided as liquidity to the pool where the transaction occurred. Users can also stake their EPX tokens (which replaced the original EPS token) to earn a share of the remaining fees.
The EPX Token
The platform's original token, EPS, was migrated to a new token, EPX, on March 31st. Before the protocol's official launch, the new tokens were locked and could not be transferred or traded. Users received 88 EPX tokens for every EPS token they migrated.
Each week, EPX holders can vote on which approved liquidity pool they want to direct the EPX rewards toward. After the voting period concludes, one-fourth of the monthly EPX rewards are distributed to the pools based on the vote results. The protocol initially supported swaps between BUSD, USDC, and USDT (the EPS 3pool).
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Frequently Asked Questions
What is the main purpose of the EPX token?
The primary purpose of the EPX token is governance and reward distribution. Holders can lock their tokens to gain voting weight, which allows them to influence which liquidity pools receive emissions and rewards. Locking EPX also provides an APR boost on their own liquidity provider earnings.
How does Ellipsis Finance ensure low slippage for trades?
Ellipsis ensures low slippage by utilizing the same specialized AMM algorithm as Curve Finance, which is mathematically optimized for trading between stablecoins and assets of similar value. This algorithm concentrates liquidity around the prevailing price, minimizing price impact for trades.
What was the reason for migrating from EPS to EPX?
The migration from EPS to EPX was part of an upgrade to the protocol's tokenomics and governance model. The new EPX token introduces enhanced features, including a more robust system for voting on rewards and providing APR boosts to users who commit their tokens long-term.
Is Ellipsis Finance safe to use?
As an authorized fork with code audited and supported by the Curve Finance team, Ellipsis is built with security in mind. Its non-custodial nature means users always maintain control of their funds. However, as with any DeFi protocol, users should always be aware of the inherent risks, such as smart contract vulnerabilities and impermanent loss.
Which networks support Ellipsis Finance?
Ellipsis Finance was initially launched on the BNB Smart Chain (BSC). Its design focuses on bringing the Curve stable swap experience to the BSC ecosystem, providing users with a low-cost, high-efficiency trading environment for stablecoins.