Solana real estate project Parcl set for $160m airdrop in April

Parcl is the latest project to confirm that the points it gives users for interacting with the protocol will convert to tokens. The conversion will take place in April.

The Solana-based protocol lets users trade on the prices in certain real estate markets with up to 10-fold leverage.

The platform uses its own data feed that tracks changes in the price per square foot for residential properties in select markets and feeds that data into a smart contract that allows traders to bet on the price movements in each real estate market.

Traders and liquidity providers can earn points on Parcl by using the platform. Issuing points typically precedes an airdrop. The points then become tradable tokens.

Since launching its V3 product in November, Parcl has facilitated over $210 million in total volume from more than 25,000 daily active users.

On December 15, Parcl began its points programme, where users could earn four points per day per dollar of liquidity provided, or one point per day per dollar of open interest on the protocol.

Open interest in trading refers to the dollar amount of open positions a trader is holding. As of 3 pm GMT on February 28, there was over $100 million in open interest on Parcl.

At the time, it wasn’t known whether these points would convert to tokens. The total value of crypto assets deposited in the protocol steadily increased from around $7,000 on December 15 at the beginning of the points program to $73 million as of February 26.

When the Parcl team confirmed in a blog that earned points would be converted into tokens in April, users ploughed $25 million into the protocol overnight.

Airdrop farmers — users whose trading strategy is to interact with protocols in the hopes of receiving tokens in the future — continue to have a noticeable impact on protocol metrics. Given the PRCL token is trading at $2 on pre-markets, these airdrop farmers may be set to receive $160 million if PRCL is still trading at $2 in April.

How Parcl works

Parcl depends on liquidity providers to deposit the USDC stablecoin, so that others can leverage trade, or used borrowed money to increase the size of a trade.

Leverage trading on Parcl is enabled by the USDC deposits of liquidity providers. In return for providing liquidity, users are rewarded with 70% of trading fees on the protocol.

With this setup, liquidity providers are essentially acting as a bank, and could lose money if traders are profitable over the long term.

Traders, meanwhile, can bet on the future prices of 10 US markets, including New York, Chicago and Los Angeles.

Trading these markets is similar to trading a traditional futures contract; users can go long or short any of the markets with up to 10x leverage.

Parcl can also be used to hedge the value of properties for homeowners, as Parcl co-founder Kellen Grenier stated in a recent interview.

If someone owned a house in London, and they believed the price of their home may fall, they could short the London market on Parcl. If the value of their home decreases, they can potentially make up the difference with the profits from their short on Parcl.

But, there are risks involved with this strategy.

Users must pay a funding fee to liquidity providers. The fee is used to keep the number of longs and shorts in a market balanced, so that liquidity providers won’t be overexposed to one side of the market.

This fee can go as high as 35% per day, although the highest funding rate on Parcl now is just 0.07%.

Parcl airdrop

The PRCL token will go live in April and will mainly be used in the governance of the Parcl protocol.

The total supply will be 1 billion PRCL, with 7%-8% earmarked for the community airdrop. At the time of the airdrop, it is estimated that 10%-12% of the total token supply will be in circulation.

Users can already trade the PRCL token on Aevo, a decentralised exchange, where one PRCL token is trading for $2 – implying a fully diluted value of $2 billion.

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