Boost Liquidity Pool by CryptoBond - SyncNetwork presented

By GameFiH2 | h2crypto | 18 Aug 2021

What are we going to do in DeFi network today? Let's level up our Liquidity Pools and gain more!

Previously in Alpaca Finance we talked about why currency is valuable and how can banks offer interests. And the concept of Liquidity Pool(LP) was also introduced which is the prerequisite knowledge of CryptoBond(CBond). If you are a newbie of DeFi and know nothing about LP, I suggest to read it before continuing this article.

Nice! Seems you are ready for it. Later we'll see how SyncNetwork benefits different stakeholders: Investors(You)、Partners(other dApps)、and SyncNetwork(itself). SyncNetwork constructs a well self-sustained ecosystem which creates tokens and burns them as a lifecycle while providing rewards to investors on top of native LP earnings plus extra traits.

Firstly, let's give a quick glance on CryptoBond.

What is CryptoBond?

BTC-USDC CB

One of my CryptoBonds. Its rarity is EPIC.

Take this CryptoBond as an example. Let me try to do ELI5:

It's a NFT which can be traded
It's a NFT with value inside
The appearance is artwork randomly generated on creation
The more rare elements displayed, the higher rarity the NFT is
This one uses wBTC-USDC LPT to build up (check top)
It burned 6,026 $SYNC on creation [available in detail view]
It generates 25,324.56 $SYNC after 3 years (check bottom)
Time to be able to harvest 320.19% rewards is on JUN 11, 2024 (check bottom)

Remember at beginning I said it's a self-sustained ecosystem? Let's figure it out.

From the above we know an investor needs to buy $SYNC first in order to "bond" LPT to create a CBond. And when a CBond matures, we can get our $SYNC back plus handsome rewards. As you may already figure out it's a design of deflation and inflation.

Furthermore, SyncNetwork adjusts interest rate on CBond creation and mature. When a new CBond be created, interest rate drops to lower the demand of creating CBond; On the contrary when a CBond be matured, interest rate raises to encourage CBond creation. Self-sustained.

And the exact composition of CryptoBond is quite easy. It's 50% LPT plus 50% $SYNC in equal value for both.

By the nature to use cryptocurrency $SYNC plus LPT to create a CBond, this bonding behavior is how "CryptoBond" been named after.

Earn by LP Staking

In Ethereum we use DEX like UniSwap to create LP. By providing our digit assets as liquidity to the pool, we share the transaction fee in return. But actually we can earn more from the same LP.

For example you may have DAI-ETH LPT in hands and it generates passive income for you by each DAI/ETH transaction be made. Let's assume it's APR is about 20% which is much better than tradition finance interests. But can we make it even better?

The answer is YES. Check on SyncNetwork you'll find they provide DAI-ETH CBond for you to invest, to earn more on top of LP trading fee. This staking action is called LP Staking.

When more LPTs staked in a DEX, the larger pool the DEX has. Large pools means the DEX can offer less token exchange slippage, in another word the token price is more stable which encourages investors to do transaction. More transactions produce more fee, that's a win for DEX.

CryptoBond Buffs

In DeFi there are other dApps provide LP Staking, but SyncNetwork has extra awesome ideas to make it even better. Just like BUFF in RPG games: you stay close with a strong character/player and your abilities are greatly enhanced. Check on these CryptoBond Buffs:

As a NFT, CryptoBond can be traded
As a NFT, CryptoBond can be used as collateral to borrow money [P2P Market]
As a LP-based derivative, CryptoBond looks great as an ART / a Certificate
CryptoBond is Time-Locked(TL) - 90 days / 180 days / 1 year / 2 years / 3 years
The characteristic of TL makes the LP more stable
The ability to stablize LP benefits SyncNetwork to win more partnerships with great projects

ETH-LINK CB

A ETH-LINK CryptoBond on Rarible Marketplace

Did you discover something interesting? Time-Locked specialty of CryptoBond creates a positive cycle to drive the project stronger and stronger in a long run. SyncNetwork already partnered with many great projects such as LINK, AAVE, AAPX, PAINT, SNX... etc. With these CBonds in service so that...

Great projects/LPTs attract potential investors
Investors create CryptoBonds which make great projects' LP be more stable due to Time-Locked specialty
SyncNetwork has live successful use-cases to seek partnerships with other great projects
[Back to top & Continue the loop]

The following is a screenshot of some Projects/LPTs that SyncNetwork currently supports. Check if there is any LPT you own but not fully utilized. You can consider to create a CBond with it to multiply its revenue. In most cases it could be 5x or even above 10x return than just LP. [Full List]

List of CBonds

Borrow / Loan

In previous paragraph we mentioned about CryptoBond Buffs. And one of those is CryptoBond can be used as collateral to borrow money. This was a newly developed feature by SyncNetwork to bring more possibilities on value circulation.

After P2P Borrow / Loan been released, there are more strategies investors can take with a CBond.

To be a borrower, you list any of your existing CBond with desired terms. Desired terms include how much you want to borrow and how many days will you repay it with interests.

To be a lender, you walk into the P2P market and hunt for great CBond NFT. You propose like 70% value of target CBond then wait for borrower to say YES or NO. Assume the deal be made and if the borrower cannot repay later, you obtain the right to grab that CBond into your wallet.

This secondary market is free for all to trade. Will you be a lender to take advantages? Or you want to be a borrower to create smart money? It's your call.

Official: What is a CryptoBond

Official CryptoBond Explanation

Risks

Because CryptoBonds reward investors $SYNC token, $SYNC price fluctuation matters.

As we already know investors need to buy $SYNC before creating a CBond and get rewards when a CBond can be matured. If we buy $SYNC at a high price to create CBond, we may incur loss on maturing a CBond if $SYNC price drops a lot.

Let's check on this Modeling of $SYNC total supply and corresponding interest rate described in SyncNetwork FAQ:

SYNC supply & interest rate

$SYNC total supply 1yr / Base interest rate 1yr & 5yr modeling

From the simulation the $SYNC total supply will be well controlled. Maturing CryptoBonds are minting new SYNC tokens, while the newly created CryptoBonds burn their $SYNC to keep the token economy in balance.

That's how the SyncNetwork ecosystem / tokenomics works.

Return to the subject as long as $SYNC total supply is stable, it's easier for us to decide what's the best $SYNC entry point. We can observe the charts of current total supply and interest rate on App Dashboard. It updates every day.

Live total supply and interest rate

Live $SYNC total supply / Base interest rate

Compare to price movement, see if you can find clues to benefit your investment.

Conclusion

In this article we talked about what is a CryptoBond. It works like a Certificate Deposit(CD) that we can only end it after certain date. But its rewards and benefits worth the waiting.

CryptoBonds provide great $SYNC reward on top of LP trading fee. And as a NFT it can be traded or to be a collateral to borrow money which enrich your cash flow.

The Time-Locked nature of CryptoBonds is a reflection of CD, SyncNetwork helps partners to grow their business by ensuring stabler Liquidity Pool. It's a positive cycle to fertilize all stakeholders - investors / partners / SyncNetwork in a healthy ecosystem.

Finally, let's see the illustration from official tweet that explains how to create a CryptoBond as takeaway. Follow the steps below and you can create your very first CryptoBond with ease.

https://app.syncbond.com/

HowTo