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Primitive: Institutional Report

3 min readResearch

Primitive: Institutional Report

Primitive: Abbreviated Introduction

The Replicating Market Maker (RMM) concept paved the way for creating a niche Automated Market Maker (AMM) structure by carving out a derivative-like payoff through the protocol Liquidity Pool Tokens (LPTs). One of the first such efforts was taken by Primitive by launching its RMM protocol.

Primitive takes a strong research-backed approach to protocol development. Its ecosystem consists of the RMM-01, other tools, and the development entity.

The RMM-01, the first initiation, is a decentralized spot exchange and derivative protocol based on the Replicating Market Maker (RMM) concept. Primitive’s RMM protocol is an Automated Market Maker (AMM), of which the Liquidity Pool Token (LPT) becomes a derivative. The LPT becomes a derivative financial vehicle due to its “covered-call” like payoff mechanism. Therefore, it should be clearly distinguished that the RMM protocol is not an AMM that trades derivatives.

RMM-01 was launched on the Ethereum mainnet. Some cornerstones of the RMM protocol design are maximum composability and its oracle-less architecture. RMM protocol smart contracts have gone through multiple audits and offer $10 million coverage via Sherlock. However, due to an error in the protocol math library, the project team decided to early sunset the RMM-01 and currently working on a new release.

The Delaware-based Primitive Bits Inc. team is currently the contributor to the protocol, and the firm aims to build an innovative base infrastructure for oracle-free DeFi experience and on-chain derivatives. Primitive has raised Seed and Series A rounds from a group of well-known investors. 

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