Cokefinance.com, the First LP Token Collateral-Mining & Lending Project on BSC, is Officially Launched
Coke.finance, an open-source AMM lending protocol is launched on BSC. Coke is the first to introduce the LP Token collateral & farming mechanism, which can create more application scenarios and expand the value of the LP Tokens of AMMs on BSC. At the same time, its innovative interest rate AMM mechanism automatically adjusts interest rates according to the ratio of deposits and borrowings, in order to accelerate the interest rate balance in the market. The interest rate is calculated according to the interest rate of each block and is reflected in real-time.
Coke provides users with quintuple value-added mechanism:
Value 1: On Coke, borrowers are allowed to use the LP Tokens of AMMs as collateral to get a loan and at the same time suppliers can earn interest from the loan.
Value 2: Both borrowers and suppliers can obtain the lend-mining rewards in COKE.
Value 3: On Coke, LP Tokens will generate same stake-mining rewards as in the previous AMM.
Value 4: Users can also obtain COKE token rewards by staking BURGER in the Coke Farm, and both COKE and BURGER rewards by providing liquidity to BURGER / COKE trading pair on BurgerSwap.
Value 5: Coke adopts a decentralized DAO governance system, where users with COKE tokens are able to participate in Coke’s community governance, including initiating proposals or voting, and obtain COKE rewards.
On Coke, you can kill five birds with one stone!
The establishment of Binance Smart Chain provides a perfect solution for the challenges faced by DeFi projects based on Ethereum, including skyrocketing Gas fees and network congestion. BSC has completed the technical development for the ecosystem, creating a great foundation for DEXes and smart contracts built on it. Currently, a large number of LP tokens have been generated on PancakeSwap, the largest LP Token decentralized exchange based on the Binance Smart Chain (More details are shown in the table below).
LP Token represents liquidity provider’s market making share in a certain liquidity pool. It is also a certificate for LPs to redeem their liquidity. After providing liquidity, users will immediately get the corresponding LP Token, which is a BEP-20 standard token. LP Tokens can be transferred freely and different LP Tokens correspond to different liquidity pools.
However, while performing market-making, liquidity providers can only choose to stake LP Token on PancakeSwap in exchange for a minimum annualized return of only 11%. LP Tokens are hard to generate greater values. For details, please see:
In addition to PancakeSwap, BSC will surely attract more high-quality DEX projects in the future as a popular option and a Lego Park for DeFi projects. These DEXes will generate a huge volume of LP Tokens. Hence, in addition to stake mining, it is of great meaning to design a product that can create more values for LP Tokens.
Coke Product Design
1. LP Token Collateral Mining Mechanism
LP Tokens have the attributes of low liquidity and cannot be liquidated at will (market makers need LP Tokens to redeem the liquidity provided), so they are very suitable to be used as collateral assets. Based on this, Coke, the first LP Tokens collateral-mining & lending project on BSC is designed. In Coke, LP token holders are able to borrow assets with LP Tokens as collateral, and earn same staking rewards from the original DEX. The value of LP tokens is expanded greatly.
2. Lending Mechanism
Coke adopts an innovative interest rate AMM mechanism which automatically adjusts interest rates according to the ratio of deposits and borrowings, in order to accelerate the interest rate balance in the market. The interest rate is calculated according to the interest rate of each block and is reflected in real-time. Coke’s lending mechanism has the following key parameters: APR (Loan interest rate), APY (Deposit interest rate), Utilization rate, Current Loan-to-Value, Max. Loan-to-Value, and Liquidation limit.
Utilization rate = Borrowed amount/(Remaining amount + Borrowed amount);
Loan interest rate = Base interest rate + Utilization rate * Market popularity;
Deposit interest rate = Utilization rate * Loan interest rate;
Current Loan-to-Value = Current loan / Deposit;
Max. Loan-to-Value: 60%
The maximum amount users can borrow is limited by the Max. Loan-to-Value of the assets they have supplied. For example, if the borrower collateralizes 100 USD of FLIP, with the Max. Loan-to-Value set at 60%, the borrower can get a loan of up to 60 USDT.
Liquidation limit: 90%
When the FLIP drops in value and cause the borrower’s Current Loan-to-Value to be higher than the Liquidation limit, the order will enter the liquidation status, and the borrower’s FLIP collateral and staking rewards will be liquidated and taken by suppliers.
When the Current Loan-to-Value is lower than the Max. Loan-to-Value, the user is able to borrow more assets until the Current Loan-to-Value equals the Max. Loan-to-Value.
*When the Current Loan-to-Value is higher than the Max. Loan-to-Value, the user can lower the liquidation risk by adding more LP Tokens to collateral and lower the Current Loan-to-Value.
When the Current Loan-to-Value equals the Liquidation Limit, the user’s liquidable assets will be injected into the liquidation pool, available for any depositor to liquidate.
When the order triggers the Liquidation limit, it will automatically enter the platform’s liquidation list.
All suppliers on the platform are eligible to triggering the liquidation. After the order is liquidated, the collateralized assets will be injected to the platform’s liquidation pool.
3. Lend Mining
Coke will also issue a platform token: COKE. In Coke, both borrowers and suppliers can get COKE rewards. The mining efficiency is related to the Utilization rate of a certain token. That is, when the supply volume increases, the system will encourage borrowing by increasing borrower’s mining efficiency; and when the supply volume goes down, in order to encourage suppliers, the system will increase supplier’s mining efficiency.
Supplier’s mining power equals Supply amount * Weight, the reward amount is proportionate to the user’s supply share.
Borrower’s mining power equals Borrow amount * Weight, the reward amount is proportionate to the user’s loan share.
4. Liquidity + Stake Mining
Users are able to get both BURGER and COKE rewards by providing liquidity to BURGER/COKE trading pair listed on BurgerSwap. Meanwhile, Coke also has a BURGER farm where users are able to get COKE rewards by staking BURGER tokens.
5. Governance Mining
Coke adopts a decentralized DAO governance system and provides a Proposal + Voting mechanism, where the community can adjust the value of certain key parameters. These parameters include Basic interest rates, Market popularity, Collateral rate, Liquidation limit, etc. Participants of the governance will be rewarded with COKE tokens.
Advantages of Coke
1. LP Token Collateral Mining Mechanism
On Coke, users can use LP Tokens (E.g. FLIP from PancakeSwap) as collateral and borrow assets. At the same time, the collateralized LP Tokens can keep generate stake mining rewards same as in the original pool. So your LP tokens’ value flips!
2. Original Quintuple Value-Added Mechanism
Apart from the double value-added model of LP Token collateral-mining mechanism, users are allowed to realize multi-dimensional gains from lend mining, liquidity mining, stake mining, and governance mining.
3. Seamless User Experience & Ultra-Low Handling Fee
The seamless trading experience provided by BSC is radically different from the expensive and slow Ethereum experience. BSC has a fixed fee for each transfer of as low as 1 cent, and each block confirmation takes only 3 seconds.
4. Interest Rate AMM Mechanism
The innovative interest rate AMM mechanism automatically adjust interest rates according to the ratio of supplies and borrowings to accelerate the interest rate balance in the market. The dynamic interest rate is calculated according to the interest rate of each block and calculated in real-time.
5. Decentralized Community Governance
Coke adopts a decentralized DAO governance system and provides a Proposal + Voting mechanism, where the community can adjust the value of certain key parameters, realizing a fair, decentralized, and transparent ecosystem governed by its community.
COKE Token Economy
Total supply: 10,000 COKE
- 30% for lend mining;
- 10% for staking;
- 10% for liquidity mining;
- 20% for the Coke team;
- 30% for ecosystem development.
All the COKE tokens will be released by the progression of lend mining at a ratio of 3:1:1:2:3, which means that whenever there is 3 COKE mined by lending, there will be:
- 1 COKE released for staking rewards;
- 1 COKE released for liquidity mining;
- 2 COKE released for the Coke team;
- 3 COKE released for ecosystem development.
The entire mining period will last 30 days, that is, all the COKE will be mined within 30 days.