Authorized Participants

Authorized participants (APs) provide liquidity needed for the index fund to operate efficiently.

How does it work?

Users who want to become APs can provide liquidity by depositing assets such as ICP, BTC, or ETH into the index fund. For example a user deposits $1,000 worth of ICP. BIT10 uses the ICP to purchase the underlying assets with the chain fusion technology of ICP which in the end will increase the supply of the index fund which ensures there are enough BIT10 tokens available for other users to purchase.

The incentive to become an AP is that they’ll earn fees. Each time someone buys or sells a token in the index fund that is backed by the liquidity the AP provided, they fee from that transaction. For example, the AP provides liquidity for BIT10.DEFI, you’ll earn fees every time someone transacts with BIT10.DEFI and over time, these fees can accumulate into a significant reward for the AP.

Why are AP’s important?

Liquidity is the backbone of any DeFI system and for BIT10, it’s paramount to have AP’s as they’ll be needed for the Index fund to function and to constantly increase the supply of the tokens. Without enough liquidity, users may experience delays or price inefficiencies when buying or selling index fund tokens. Authorized participants solve this by maintaining a healthy pool of assets. As more users become AP’s and provide more liquidity, this makes the BIT10 system more healthy as user will be earning fees and benefiting the system and increasing the supply so that more users can invest into BIT10.