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Compound Finance Review: DeFi Lending & Yield Farming

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Compound has recently become the largest lending protocol in Decentralized Finance (DeFi).

The introduction of its COMP token on June 17th sent the crypto world into a frenzy as users rushed to deposit their assets and earn unholy amounts of interest along with daily rewards paid in COMP for participating in the ecosystem as a lender and/or borrower.

Hype is still on the horizon with Binance listing the COMP token on June 25th, causing a 25% spike in price on Poloniex. The sudden drop in crypto markets during the same period has not phased Compound users, who still have over 600 million USD worth of crypto locked on the platform.

By the end of this article you will understand why people are so excited about Compound as well as its significance in the world of DeFi.

What is DeFi?

If you want to wrap your head around Compound Finance, you first need to fill it with the knowledge of DeFi. In a sentence, DeFi allows anyone on the internet to access financial services in a secure, decentralized, and private manner without the use of a middleman. This includes saving, trading, lending, and just about anything else you would usually do with money that involves centralized third parties such as banks.

Defi overview
Decentralized finance vs. traditional finance: Image Source

As you might have guessed, this ecosystem involves cryptocurrencies and not fiat currencies (although stablecoin cryptos which are “pegged” to the price of a fiat currency such as USDT or USDC are commonly used in DeFi). The overwhelming majority of popular DeFi decentralized applications (Dapps) and the assets used within them are built on the Ethereum blockchain.

Defi Platforms
Decentralized exchanges in cryptocurrency: Image Source

DeFi has been a hot topic in cryptocurrency for quite some time, well before Compound took centre stage. Up until recently, the spotlight in recent months had actually been on DeFi protocols such as Kyber Network, Uniswap, and Bancor which provide decentralized exchange (DEX) services. The ‘endgame’ of DeFi is effectively the total elimination of third parties in all value transactions (yes, even Binance).

What is Compound?

Compound is a decentralized lending platform that was created by Californian company Compound Labs Inc. in September of 2018. Like many other protocols in DeFi, Compound is built on the Ethereum blockchain. Although Compound was initially centralized, the recent release of its governance token, COMP, marks the first step in turning Compound into a community-driven decentralized autonomous organization (DAO).

While Compound’s goal has been stated in many different ways in many different places, the underlying idea is this: put your idle cryptocurrency to use. The Compound protocol lets users to lend and borrow 9 Ethereum-based assets including Basic Attention Token (BAT), 0x (ZRX) and Wrapped BTC (wBTC).

Compound Finance Website
The Compound finance protocol: Image via Compound Finance

At the time of writing, you can earn annual interest (also known as APY) of over 25% when lending BAT. No Know Your Customer (KYC), Anti Money Laundering (AML) or credit record is required to use Compound.

Users of the platform do not just have the potential to earn crazy interest rates but are also rewarded in COMP tokens for borrowing or lending cryptocurrency. Given the high price of the COMP token, this has opened the door to some brain-teaser level of DeFi gymnastics that has allowed users to increase their APY to over 100%.

This is a large part of why people are crazy about compound. We will explain how such insane interest rates are possible later in a moment. First, we need to cover how Compound works.

How Does Compound Work?

As mentioned, in the Compound protocol users can deposit cryptocurrency as lenders and/or withdraw cryptocurrency as borrowers. Instead of lending directly to borrowers, lenders combine their assets into asset pools from which users can borrow.

Compound Lending Pools
Compound lending pools: Image via Compound Finance

There is a pool for every asset (Basic Attention pool, 0x pool, USDC pool, etc.). Users can only borrow a USD value in crypto that is below the collateral they have supplied (e.g. 60% of the collateral). The amount they can borrow depends on the liquidity and market cap of the collateral.

When you lend cryptocurrency on Compound, you received an amount of corresponding cTokens that is generally much larger than the amount of crypto you deposited. cTokens are ERC-20 tokens which represent a fraction of the underlying asset.

For example, at the time of writing, lending 1 DAI would give you almost 49 cDAI in Compound. cTokens exist to allow users to earn interest. Over time, users can purchase more of the underlying asset they deposited with the same fixed about of cToken they received.

Compound cTokens
Compound cTokens explained: Image via Compound Finance

In contrast to legacy borrowing services, interest rates are neither fixed nor agreed upon by the two parties involved in the transaction. Instead, the interest rate is determined by supply and demand and constantly updated by a complex algorithm.

As a rule of thumb, the greater the demand there is for an asset, the higher the interest rates will be for both lenders and borrowers. This gives incentive to lenders to lend and deters borrowers from over-borrowing. Lenders can also withdraw their assets at any time.

If a user has borrowed more than what they were permitted due to a drop in the price of the asset they provided as collateral, they risk the liquidation of that collateral. Holders of the borrowed asset can choose to liquidate the collateral and purchase it at a discounted price. Alternatively, borrowers can pay back a portion of their debt to increase their borrowing capacity above the threshold of liquidation and carry on as usual.

Compound Liquidity Mining

The main idea behind liquidity mining is to give incentives to both lenders and borrowers to use the Compound protocol. The reasoning is that failure to do this would result in a gradual decline of the platform as lenders and borrowers gradually drop off or move to similar protocols in the DeFi space. To ensure a consistently high level of liquidity and participation, Compound rewards both lenders and borrowers in COMP tokens.

Compound Liquidity Mining
Compound liquidity mining explained: Image Source

This is done using a smart contract and the distribution COMP rewards are based on a handful of factors including the interest rates of an asset’s lending pool and the amount of people interacting with the lending pool. 2880 COMP tokens are distributed daily with half going to borrowers and the other half to lenders.

What does the COMP token do?

In addition to being the carrot on the stick that motivates users to use Compound, the COMP token gives users governance over the protocol. This allows users to have a say in the future of Compound. 1 COMP token is required to cast a vote, and votes can be delegated to other users of the protocol without needing to actually transfer the token to them.

Compound Governance
Compound governance token: Image via Compound

All proposals made in Compound consist of executable code. A user must have 1% of the total COMP supply on hand or delegated from other users to table a proposal. Once submitted, there is a 3-day voting period wherein a minimum of 400 000 votes must be cast. If more than 400 000 votes affirm the proposal, the new change implemented after a 2-day waiting period.

The COMP ICO

There was no initial coin offering (ICO) for the COMP token. Instead, nearly 60% of the 10 million token supply was allocated to investors, founders, current team members, future team members, and community growth.

Specifically, just under 2.4 million COMP tokens were given to shareholders of Compound Labs Inc., just over 2.2 million were given to the Compound founders and team, just under 400 000 have been saved for future team members, and just under 800 000 have been allocated for community initiatives.

COMP Token Distribution
The distribution of COMP tokens: Image via Compound

The remaining 4.2 million tokens will be distributed to the users of the protocol over a 4-year period (assuming a consistent daily distribution of 2880). It is worth noting that the 2.2 million COMP tokens given to Compound’s founders and team members is apparently temporary and will be ‘returned’ after a 4-year period. This is to allow for a transition period wherein the founders and team can still guide the protocol via voting as it gradually becomes “fully” autonomous / community driven.

Cryptocurrency Yield Farming

Although the philosophical reasons for DeFi’s existence are all well and good, what really has people rushing to platforms like Compound right now is the ability to leverage smart contracts within and between various DeFi protocols to receive impossibly high interest rates.

In the cryptocurrency community this is known as yield farming and fundamentally involves a mind-bending mix of borrowing, lending, and trading that would put the Federal Reserve to shame.

Yield Farming
Cryptocurrency yield farming profits: Image Source

Yield farming is extremely risky, and many consider it to be a variation of leverage trading. This is because it makes it possible for users to trade sums of crypto much larger than the underlying amount they have actually put down.

You can think of it as your own personal pyramid scheme with the pyramid flipped upside down. The entire structure is reliant on a single asset which must either increase in price or stay the same or else everything comes crashing down.

The specifics of how yield farming works depends primarily on the asset you are trying to accumulate. In terms of Compound, yield farming involves maximizing your return in COMP tokens for participating in the ecosystem as BOTH a lender and borrower.

This effectively allows users to make money from borrowing cryptocurrency in Compound. This is done using a platform called InstaDapp, a dashboard that lets you interact with multiple DeFi apps from a single point of reference.

Compound Yield Farming

InstaDapp offers a feature called “Maximize $COMP mining” which can give you a more than 40x increased return in COMP tokens. The short of it is that the USD amount of COMP tokens you receive outweighs the USD value of the interest you owe on the money you have borrowed. How this works was detailed quite nicely in this YouTube video but if you do not have 30 minutes to watch it, we will break it down for you in a single paragraph.

Suppose you have 100 DAI. You deposit the 100 DAI into Compound. Since Compound allows you to use those funds even though they are “locked”, you use the 100 DAI with the “Flash Loan” feature in InstaDapp to borrow 200 USDT from Compound.

Yield Farming Compound
Yield farming with Compound: Image Source

You then convert the 200 USDT into (roughly) 200 DAI and put the 200 DAI back into compound as a lender. You are now lending 300 DAI and owe 200 USDT. This gives you a return in COMP which gives you an annual interest rate in USD that can easily exceed 100% even after accounting for the interest rate you pay for borrowing the 200 USDT.

Magic, right?

As mentioned earlier, the success of this scheme is dependent on the stability or growth of the underlying asset. For example, even though DAI is technically a stablecoin, it can still fluctuate by a fraction that is large enough to soak the sandcastle and bring it down. This tends to happen to stablecoins when the rest of the market fluctuates and traders rush to hedge their losses using fiat-pegged tokens.

The Compound Roadmap

Unlike many cryptocurrency projects, Compound does not really have a roadmap. In the words of Compound Labs Inc. CEO Robert Leshner “Compound was designed as an experiment”.

Compound Roadmap
Compound development goals: Image via Compound Blog

This quote is taken from a Medium post from March of 2019 which appears to be the closest thing to a roadmap you can find from Compound. It details 3 goals the project wished to achieve: enabling support for multiple assets, allowing each asset to have its own collateral factor, and becoming a DAO.

In the months that followed, Compound posted regular development updates to Medium. The most recent post was earlier this month and its subtitle states the following: “Our core work on the Compound protocol is done. It’s time for the community to take charge.” Considering the development team seems to have successfully achieved the 3 goals it outlined just over a year ago, it seems that Compound may be one of the few “finished” cryptocurrency projects.

Compound Development Proposals
Compound development proposals: Image via Compound

In reality, the future of Compound will be determined by its community. Based on the publicly viewable Governance Proposals within compound, most appear to involve adjusting reserve factors and collateral factors for supported assets.

In short, reserve factors are a small portion of the interest paid on loans by borrowers which are set aside as a “liquidity cushion” in the event of low liquidity. A reserve factor is the percentage of the collateral you can borrow as a borrower. It is also likely that more assets will be added to Compound as time goes on.

Compound Finance vs. MakerDAO

Up until Compound rushed the stage, MakerDAO was the most popular DeFi project on Ethereum. For those unfamiliar, MakerDAO also allows users to borrow cryptocurrency using Ethereum, BAT or wBTC as collateral.

However, the cryptocurrency you can borrow is not “just another” Ethereum-based asset, but an ERC-20 stablecoin called DAI which is ‘soft-pegged’ to the US dollar. Unlike USDT or USDC which are backed by centralized assets held in custody, DAI is fully decentralized and backed by crypto.

Compound vs. MakerDao
Compound Finance vs. MakerDao

As in Compound, MakerDAO does not let you borrow the full amount of the Ethereum collateral you deposited in DAI. Instead, you can only borrow 66.6% of the USD value of the Ethereum you have put down as collateral. This means that if you deposited 100$ worth of Ethereum as collateral, you would be able to withdraw roughly 66 DAI as a loan. In contrast to Compound, this reserve factor is not subject to change and DAI is the only asset which can be borrowed on the platform.

Both MakerDAO and Compound have been used to yield farm. Funny enough, Compound users were borrowing DAI on MakerDAO to lend it in Compound when it had the highest interest rate. MakerDAO also gives users the option to lock up their DAI in return for interest.

Dai Stablecoin
MakerDAO’s focus on DAI. Image via MakerDao

While there are many differences between the two DeFi giants, the two most notable are 1) that the goal of MakerDAO is fundamentally to support the DAI stablecoin and 2) that Compound gives users additional incentive beyond interest rates (COMP) to participate in the protocol.

How it is that Compound overtook MakerDAO so quickly is quite easy to understand when you put the two protocols side by side. In addition to greater incentives for participation, Compound also supports substantially more assets for lending and borrowing. This gives it the advantage when it comes to yield farming, which is arguably the driving factor behind these kinds of DeFi protocols.

Furthermore, Compound is much easier to understand and use than MakerDAO, which has elaborate borrowing fees and protocols that exist primarily to ensure the stability of DAI. You can see how that works here.

COMP Price Analysis

The price history for COMP is quite limited considering it has only been on the markets for 2 weeks. During this time, it went from a price of around 60$USD to over 350$USD in a matter of days. It has since pulled back around 30% but remains steady as cryptocurrency markets slip into negative percent changes.

COMP Price Performance
COMP Price Performance: Image Source

Oddly enough, it seems that Compound is also keeping BAT in positive percentage territory since it is currently the asset with the highest interest rate on the platform (around 25%).

At the time of writing, COMP is once again rallying up by over 10 percent following an announcement from Coinbase that the token has officially been listed for trading. Whether successive listings by large exchanges is what is keeping the asset closer to the moon than the Earth cannot as of yet be said with certainty.

Considering its appeal over similar protocols such as MakerDAO, it does not seem likely that this asset will retrace back to 60$USD without another black swan event (not financial advice!).

Where to get COMP Cryptocurrency

At the time of writing, you can buy COMP on about a dozen exchanges including Coinbase Pro, Binance, and Poloniex. Oddly enough, the Binance pairings are not yet listed on CoinMarketCap but include BTC, USDT, BNB, and BUSD.

COMP Token Markets
COMP Markets & Trading Pairs: Image Source

When combined, the 24-hour volume on Binance is on par with Coinbase Pro. The total 24-hour volume is quite low given its market cap but if you are looking to get your hands on COMP there is absolutely no shortage of liquidity on Binance and Coinbase Pro for the time being.

COMP Cryptocurrency Wallets

Since COMP is an ERC-20 token, it can be stored on just about any wallet which supports Ethereum. The list is long but includes the likes of Exodus wallet, Trust Wallet, Atomic Wallet, Ledger and Trezor physical wallets, and browser wallets such as MetaMask.

If you are using Compound and do not intend on voting, make sure to regularly transfer your accumulated COMP tokens to your own wallet from time to time. Just keep in mind that you must have at least 0.001 COMP accumulated if you want to withdraw it.

What we think about Compound

While we are stoked about Compound, there are a few peculiarities that have surprisingly not attracted much attention. The first is the exceptionally high allocation of COMP tokens to stakeholders, founders, and team members. As mentioned previously, this accounts for around 60% of COMP’s total supply.

If this were any other token, traders and investors would run to the hills. When the founders and backers of a cryptocurrency project have the lion’s share of the asset, this leaves other token holders open to a pump and dump scheme reminiscent of the ICO craze in 2017-2018.

COMP Owners
Who holds the most COMP cryptocurrency?: Image via Compound Finance

Second, it appears as if the founding members and investors which backed Compound Labs Inc. are very involved in Compound’s community governance. The publicly viewable “Top Addresses by Voting Weight” shows that nearly all of the top 50 COMP token holders consist of people involved in Compound Labs Inc.

Interestingly enough, yield farming provider InstaDapp is also in the top 10. This means that despite being community driven, Compound is still very much in the hands of its original stock.

Third, it is hard to see how lending protocols such as Compound could have any practical use in the real world. This is primarily because it is somewhat pointless to borrow an amount of an asset that is less than what you currently hold.

COMP Lenders & Borrowers
Lenders and borrowers on Compound: Image Source

For the time being, very few DeFi protocols allow you to borrow more than you own. This is not an issue for those interested in yield farming, but in the real world being able to borrow more than you own is the central value proposition of having lending services in the first place.

While it is true that the prospect of saving your money with a DAO would be more profitable (and perhaps even more secure) than doing so though a bank, it seems hard to imagine how those high APY rates would remain if there was a sudden surge in lending supply by retail investors.

Compound’s own algorithm would lower the interest rate to a level that might be comparable to a bank. This is because it is doubtful whether there would be an equivalent surge in people wanting to borrow less than they currently own.

Black Swan Events

Our final concern with Compound is how it could handle a black swan event. For those unfamiliar, a black swan event is an unforeseen external circumstance which disrupts markets. The current pandemic is an example of a black swan event as it sent stocks and cryptocurrencies into a freefall in March of this year.

Whereas centralized institutions have some wiggle room in terms of responding to these sorts of market fluctuations, DAOs operating off pre-programmed smart contracts do not.

March DeFi Crash
Cryptocurrency market crash March 2020: Image Source

Understanding why this is a problem can be best understood by examining what happened to MakerDAO during the March flash crash. As mentioned earlier, the purpose of MakerDAO is ultimately to uphold the stability of the DAI token. Simply put, this involves maintaining a balance between the USD value of DAI in circulation and the USD value of the collateral which backs it. This is done by minting and burning DAI against the existing collateral in various contexts.

When the March black swan spread its wings causing a sharp drop in cryptocurrency prices, this triggered a significant number of borrowers’ “vaults” to have their collateral liquidated. Why? Because the amount of DAI they had borrowed was suddenly more than the 66.6% reserve threshold they need to stay below to avoid liquidation.

MakerDAO collateral vault
MakerDAO collateral vault auctions: Image Source

As you can imagine, the other users in the system which would normally buy the liquidated collateral at a discount were hesitant to do so, meaning there was nobody to buy it and bring equilibrium to the protocol (since DAI is used to buy the collateral and is burned when doing so).

When you remember that networks can become extremely congested in times of volatility, this effectively meant that the ratio of “vaults” containing collateral being auctioned to the amount of users willing and able to buy was easily in the neighbourhood of 100-1.

This allowed some users to buy the collateral funds at near-zero prices in the absence of any actual auction participants. Although this was great for the users who decided to buy the cheap collateral, MakerDAO’s ecosystem was thrown off balance.

MakerDAO Liquidation 2020
MakerDAO liquidation 2020: Image Source

While Compound has had the fortune of not going through the March flash crash in its current ‘DAO’ state, the fact of the matter is that we are still very much in volatile times when it comes to both cryptocurrency markets and legacy markets.

It may very well face an issue identical to MakerDAO, where a sudden drop in price causes the collateral of borrowing users to be liquidated without enough buyers available to bring financial stability and liquidity to the protocol.

Conclusion

Despite these concerns, we believe that the Compound protocol hold some serious promise. After all, it seems that Compound is one of the rare and recent instances of a fully functioning DeFi project on par with the likes of Ren’s RenVM, which allows for decentralized, secure, and private cryptocurrency swaps between blockchains.

Furthermore, assuming the operation of the Compound protocol is actually handed over to the community, it will hopefully be able to refine the platform into something that will be used outside the fences of crypto yield farmers with a dollar-green thumb.

Make no mistake, what we are seeing is the beginning of a new era of finance. MakerDAO, Kyber Network, Uniswap, and Compound are in truth the first steps on a much longer journey to a world where finance is decentralized, transparent yet private, secure, and accessible to virtually everyone on the planet.

Here is to hoping that Bitcoin will cause people to inadvertently FOMO into the some of the most exciting technologies to date.

Featured Image via Shutterstock

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.


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Source: https://www.coinbureau.com/review/compound-finance-comp/

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Shiba Inu (SHIB) Rises to Range High

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Shiba Inu (SHIB) yesterday reached the range high where it has been trading since May 2021. If the token breaks out of that area, it could begin a parabolic rise.

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SHIB currently ranks as the 47th largest cryptocurrency by market capitalization, according to Coingecko. The main “dog competitor” and also the younger brother of Dogecoin (DOGE) broke out of the descending triangle pattern and validated the falling resistance line as support.

SHIB reaches the range high

Since the May 2021 declines, SHIB has been in a range between resistance in the $0.00000950 area (red rectangle) and support at $0.00000550 (green rectangle). Over a period of almost 4 months, the altcoin has repeatedly reached and bounced off these two areas.

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On 16 September, SHIB rose 26% to reach the resistance area again a day later. At the press release, this area rejected the price and left a long upper wick.

However, if the daily candle closes above $0.00000904, a higher high will be printed on the daily chart. Combined with the higher low (blue arrows) of 7 September, this could signal a reversal and the start of an upward impulse.

Chart by Tradingview

The possibility of breaking through the top of the range and continuing the uptrend is also confirmed by the growing volume signature. During the last two days, it reached the highest values since mid-June (red arrow).

Technical indicators confirm the possibility of the continuation of the uptrend. RSI has broken above the 50 line and is rising. MACD generated two positive momentum bars and the signal line is close to entering positive territory. The stochastic oscillator is heading upwards and is close to entering bullish territory above 80.

Chart by Tradingview

Descending triangle

The daily chart also shows the breakout from the descending triangle that occurred on 7 September (orange arrow). On that day, SHIB rose 24% and began a multi-day consolidation. It then rose to the top of the range at $0.00000950 and started a downtrend.

The downward movement validated the descending triangle line twice as support (orange circles) and brought the price to the bottom around the range support area. Since then, SHIB has risen 40% and continues its upward movement.

Chart by Tradingview

The movement target for this pattern as measured by the height of the descending triangle is the $0.00001100 level. This resistance coincides with the 1.414 Fib external retracement level measured for the last downward movement. If SHIB reaches this peak, it will confirm the breakout from the range described in the previous section.

SHIB future movement

The short-term 4-hour chart shows a breakout from the descending resistance line that has been respected since August 17. The line was tested several times until it was decisively broken through with high volume on 16 September.

At the same time, the SHIB price also broke through the short-term support/resistance area near $0.00000760 (green rectangle). It coincides with the 0.382 Fib retracement level. It is expected that in the short term it will serve as support and the price will validate the area before continuing the upward movement.

Chart by Tradingview

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here.

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PhD and an assistant professor at an international university in Lublin, Poland. Spent 10 years studying philosophy of nature and sport science. An author of 4 books and two dozens of scientific articles. Now, he is using his mind for the benefits of the cryptocommunity. Technical analysis enthusiast, Bitcoin warrior, and a strong supporter of the idea of decentralization. Duc in altum!

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Source: https://beincrypto.com/shiba-inu-shib-rises-to-range-high/

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AMD Not Prioritize Mining Cards Over Gaming GPUs, Says CFO

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AMD, along with other chip manufacturers, has struggled to keep up with the high demand for GPUs due to crypto mining. 

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The past year has been hard on those looking to buy gaming graphic processing units (GPUs). The same high-powered units that are used in HD gaming applications also happen to be the GPU of choice for cryptocurrency miners worldwide. As the mining of cryptos such as Bitcoin becomes more and more difficult, more and more processing power is required to achieve the same goal.

Due to this, there has been a rush on GPUs in the last year with AMD, Nvidia, and other manufacturers struggling to keep pace. AMD has come under heavy pressure because of how poor its ability to meet the growing demand has been. Some even accused the company of prioritizing mining cards over gaming chips. The pandemic was another root cause of this shortage as the world’s population demanded more home electronics and entertainment devices across the board. 

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During the recent Deutsche Bank Technology Conference, CFO of AMD Devinder Kumar said that AMD was not prioritizing GPU cryptocurrency miners when asked directly about it. Kumar’s response was “crypto, negligible. That’s not a priority for us. We do not prioritize our products or make them for the crypto folks is not for the gamers, and that’s a high priority from that standpoint. What’s driven the growth, as you know, we had the Radeon 6000 Series high-end GPUs introduced very competitive and that is driving the growth in the GPU space.” 

Crypto-specific cards might be the answer

Nvidia has suffered through the same issue as its competition and is tackling it in a rather reasonable way. The company began to produce and market GPUs that were specifically designed for cryptocurrency miners. Nvidia creating a distinct separation between the two should help alleviate the rush on gaming GPUs that users are scrambling to purchase. 

The crypto-mining processors (CMPs) that are now being sold aren’t as sophisticated as their gaming counterparts because they don’t need to be. Because they can’t be used for conventional graphics-related tasks, they will not flood the GPU secondary market. CMP cards can’t be used for graphics-related tasks are therefore won’t flood the secondary market with GPUs.

Another step that Nvidia has taken to combat this issue is to nerf its currency line of GPUs to make them less suited to the task of mining cryptocurrencies. Due to this, they are only effective as gaming cards.

What do you think about this subject? Write to us and tell us!

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Matthew De Saro is a journalist and media personality specializing in sports, gambling, and statistics. Before joining BeInCrypto, his work was featured on Fansided, Forbes, and OutKick. With a background in statistical analysis and a love of writing, he takes an outside-the-box approach to reporting news.

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Source: https://beincrypto.com/amd-not-prioritize-mining-cards-more-than-gaming-gpus/

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Tomi Heroes NFT Sales Surpasses $1.35M

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NFT and DeFi enthusiasts worldwide may be wondering why Tomi Heroes have been popping off on OpenSea in recent days.

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These non-fungible tokens grant access to Tomi’s token presale soon, so the limited-edition sets are in high demand. With 395 Ether roughly $1.37 million in traded volume, it is evident that this is the project to keep an eye on over the coming days. 

Massive TOMI Presale ROI Potential

As Tomi Heroes generate more proceeds, the team will use these funds to purchase and burn TOMI token during the TOMI sale on SushiSwap.

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It is a no-brainer for any TOMI presale participant, as, given the contribution by the TOMI team from the NFT sale, the return on investment potential is borderline astronomical.

As more FOMO kicks in among investors who seek exposure to the TOMI presale rounds, the remaining NFTs will generate even more attention and return for the presale.

It is essential to see this project for what it embodies. It is not just an NFT collectible, although these items will likely remain very popular on the secondary market after the token sale concludes.

Instead, it is a tool to facilitate token presale participation and incentivize holding the NFT rather than flipping it for a quick profit like so many other projects. 

Moreover, using the proceeds to make the TOMI token even more scarce is a gamechanger in the crypto industry.

Since the project focuses on giving back to the stakeholders with no profits for the developers, other NFT projects can learn a thing or two from how Tomi approaches this novel technology.

Perhaps this will set a precedent for ethical and inventive demand-driven tokenomics.

Investing in Tomi Heroes is a smart idea if you are interested in partaking in the TOMI presale rounds. It is essential to gain access to one of these five presale rounds, as they are available for only 30 minutes each.

The current rate of ETH trading volume is sufficient to make investors 10x on their TOMI investment even if no one else would participate in the token sale and it remains at a $75,000 market cap. 

The TOMI launch will happen on the Polygon network via the SushiSwap platform to avoid transaction delays and high gas fees. The token presale rounds will take place on September 21, 2021, with each of the five presale rounds lasting 30 minutes. .

A dive into the Tomi technology

To grasp the potential of TOMI, it is essential to look at what the ecosystem will provide to its users. Powering scalable projects through blockchain technology and introducing DEX swapping are two of its core solutions.

The focus on decentralized finance can change the lives of millions of people by democratizing access to alternative financial services and products.

Aligning this vision with PancakeSwap’s success and long-term plan can create a sustainable and attractive outlook for cryptocurrency and blockchain over the coming years. 

TOMISwap will serve as the next-generation decentralized trading platform built by the Tomi team. It will run on the Ethereum blockchain and facilitate the swapping of multiple tokens without forcing users to spend an arm and a leg on transaction fees.

Offering sustainable, efficient, cheap, and fast solutions for transactions at a high throughput helps conserve energy and offers scalability that will benefit all participants. 

The transaction fee per swap is capped at 0.3% of the amount, thanks to the use of decentralized liquidity providers. Of those fees:

  • Liquidity providers will earn 66.6% of transaction fees from TOMISwap and the Sushiswap smart contract’s activity, 
  • Governance token stakers will receive 16.6% of the transaction fee.
  • TOMISwap user giveaways will be allocated 8.3% of the transaction fee.
  • The remaining 8.3% goes to TOMIFundMe. 

Through TOMIFundMe, every person on the planet can set up a profile to share project ideas and business plans.

Rather than stopping there, TOMIFundMe will help business ideas grow and evolve if they can change the world for the better.

All TOMI holders can vote on projects to receive a grant. Those grants are paid out using the 8.3% of all TOMISwap fees collected for this purpose.

It is a front-row seat to future development in the decentralized industry, unlike anything that has been seen before. 

The team’s strong focus on wealth distribution and making a positive societal impact brink value to the TOMI token and those who hold it in their portfolio. However, there are multiple benefits to holding that token.

TOMI utility In a nutshell

The TOMI token serves multiple purposes in the Tomi ecosystem, as it is the native currency.

Ranging from community governance to liquidity provision and cheap transactions, there are multiple reasons to like the concept of TOMI.

Governance token stakers receive passive income from TOMISWAP and can vote on the new era of blockchain development.

Traders can benefit from cheap transaction fees and liquidity rewards through swapping DEX. 

With an initial supply of 1.5 billion – capturing the initial needs of the project – the team opts for using half of the coins to provide liquidity through Sushiswap.

Another 250 million tokens will fund the development of the project and require TOMI governance token holder approval before spending.

The remaining 500 million – to be unlocked over three years – is used for the Community pool. There are no free tokens for the founders or anyone else to ensure a fair distribution and release. 

After the TOMI sale concludes, the team will launch TomiSwap and TOMI staking in October 2021. TomIFundMe will be released in Q1 2022, somewhere near February.

The Tomi blockchain – marking the migration away from Ethereum – goes live in Q3 2022 and will support ERC-20 tokens. 

Closing thoughts

The ongoing interest in the Tomi NFTs confirms investors are on board with the team’s vision of creating wealth for everyone through fairness and transparency.

Moreover, the team’s choice to use all proceeds to buy back TOMI tokens and reduce the supply from day one – without any developer receiving a free allocation of tokens – confirms their commitment to a long-term business plan capable of changing DeFi for good. 

A confident team with a solid business plan and a forward-thinking approach can make many ideas become reality. As cryptocurrency becomes a more mainstream concept, now is the time to build wealth and share it with everyone else. All aspects of Tomi fulfill that outlook and provide value and incentive for TOMI holders.

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.

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Source: https://beincrypto.com/tomi-heroes-nft-sales-surpasses-1-35m/

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