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Recently, the Scroll ecosystem project Penpad further upgraded its brand to Pencils Protocol. After the new upgrade, it not only upgraded the functionality of the LaunchPad platform, but also further introduced Staking, Vault and Shop. This also made the narrative direction of Pencils Protocol no longer limited to LaunchPad, but further expanded to LaaS (Liquidity-as-a-Service), Restaking and RWA.

Pencils Protocol, which has achieved a new brand upgrade, has also made a series of market progress. In the financing market, it has successively obtained investments from Scroll co-founder Sandy Peng, Gate Labs, OKX Ventures, ABCDE Capital, Presto Labs, Animoca Brands, etc. Recently, Pencils Protocol announced that it has received investment from Galxe. The continuous expansion of the investor camp has not only continuously improved the market valuation of Pencils Protocol, but also promoted its market influence and accelerated the progress of the ecosystem.

From partners to investors, Galxe has high hopes for the development of Pencils Protocol

In fact, Galxe is one of the early partners in the development of the Pencils Protocol ecosystem. When Pencils Protocol initially launched the LaunchPad for the PDD token, Pencils Protocol received support from Galxe in both Season 1 and Season 2 activities.

At the same time, Pencils Protocol also received support from a series of market resources provided by Galxe. Driven by Galxe and partners such as OKX Wallet, Pencils Protocol’s ETH staking volume exceeded 1,100 in Season 2 (users staked ETH to obtain PDD token distribution), and its TVL reached nearly US$3.3 million.

Of course, after the Pencils Protocol completed the upgrade, it ushered in a new upgrade in gameplay. Pencils Protocol is no longer just a LaunchPad platform, but has expanded into a comprehensive platform native to the Scroll ecosystem. It can not only provide startup services for emerging projects on Scroll, but also Scroll ecosystem users can achieve one-stop income services through Pencils Protocol.

Focusing on the Pencils Protocol itself, users can stake their assets into the Pencils Protocol asset pool to obtain staking income from the pool. Currently, the Pencils Protocol Staking product provides users with four types of single-currency deposit assets: ETH (Native ETH, WETH, Restaking certificate), WBTC (EVM-compatible BTC staking certificate), stablecoin, and high-quality ERC20 in the Scroll ecosystem, and can obtain considerable income from them.

The Vault pool is based on the liquidity mining gameplay (by combining with third-party DEX), and further constructs the leveraged mining gameplay. That is, the Vaults pool will support users to borrow to increase their income. The Vault pool will ensure the safety of depositors' funds by evaluating the borrower's principal and limiting the borrower's leverage multiples. After the user borrows, the system will deduct the corresponding interest from the income, and during the whole process, the depositor's funds will not be subject to liquidation risks.

When Staking users pledge the supported funds to the corresponding pool, these assets will enter the Vault pool for Vault users to borrow and configure leveraged asset gameplay. In fact, the two sectors are linked. In this model, from the Staking side, the lower the liquidity of the fund pool and the smaller the fund scale, the higher the yield (similarly on the other side, Vault borrowers need to pay higher interest to borrow from low liquidity and smaller Vault pools), so Staking users can choose higher yields from many Staking pools, which will promote the balance of liquidity in different fund pools and bring a better user experience to the Vault side. For Vault players, leveraged mining itself has extremely low risks and can obtain much higher returns than the current DeFi Farming.

Whether users are staking or Vault pool leveraged mining, they can further obtain Pencil points, Scroll points and even other DEX and Restaking protocol points rewards, and achieve the effect of killing two birds with one stone. In the upcoming Season 3, users will be able to participate in and experience these new features and gameplay.

At the same time, Pencils Protocol will also become the largest liquidity hub, traffic entrance and important launch pad in the Scroll ecosystem.

Galxe's investment in Pencils Protocol is a recognition of its long-term development prospects and narrative direction. Through in-depth links with Pencils Protocol, Galxe is also expected to further use it as a channel to further explore and layout the Scroll ecosystem.