Profit. If you’ve entered cryptocurrency, profit is likely to be one of your goals. Profit in crypto usually means buying and holding as a coin appreciates or the usual buying low and selling high trading approach.
With the advent of decentralized finance (DeFi), we’ve seen another way to profit: yield farming. You might’ve looked at the many different tokens offering rewards for staking tokens and maybe even participated in pools with ridiculously high APYs.
We’re talking 100000-1000000% APYs. These types of pools offer incredible rewards, but also incredible risks such as impermanent loss and smart contract failure.
They also offer something beyond just risk: inevitability. Due to the nature of high yield rewards, inflation will inevitably come into effect.
This means the 7908230% APY you were getting with farming UNAGI tokens will eventually lead you to less overall profit because each individual coin fell in price as your yield was being farmed.
Many coins have tried to solve inflation in yield farming with an “after the fact” approach. Specifically, coin devs will try to tackle inflation after it has hit their token holders. They might implement a token burn system or a system to limit APYs.
Unfortunately, by the time inflation has taken hold, it might be too late. Along with needing to deal with inflation, devs need to consider the high amount of bag holders (users who take losses after buying a coin and decided to keep holding it anyways) waiting at the wings to dump their coins.
Dealing with inflation and an already angry community is not a winning environment. Just ask the devs at Sushi Swap.
What if, instead, a token took a predictive approach to inflation rather than a reactionary one?
Sustainably Operated Farming: Getting to the CORE of the Issue
A different approach to staking has been taken by COREVault. CORE is a deflationary cryptocurrency that generates profit autonomously with a decentralized approach.
Starting with the CORE liquidity generation event (LGE), users were able to lock up ETH in the CORE liquidity pool in exchange for LP (liquidity pool) tokens that could be used for farming.
By lock up ETH, we mean lock up ETH. LP tokens cannot be withdrawn, no matter what. That means CORE has an effectively permanent source of liquidity in the form of LGE contributions. The only way to receive a direct return from LP tokens is to trade them over-the-counter.
Also note that this is specifically a liquidity generation event and not a token generation event. The total 10,000 CORE supply will stay 10,000. The only way to get more CORE is to trade for it on Uniswap or farm it.
Along with the liquidity lock up, CORE farming doesn’t provide ridiculous APYs as previously mentioned. As of writing, staking 1 LP generates an CORE APY of around 500%.
This number is much smaller than what many are accustomed to in DeFi yield farming, but is necessary in providing sustainable yield and serves as yet another way that CORE combats inflation.
A Positive Feedback Loop of Farmers and Traders
All of this benefits farmers, but what about the other side of the crypto ecosystem: traders?
Every single CORE transaction on Uniswap generates a 1% fee that is redistributed to CORE farmers. This means that the other side of the coin, trading CORE, acts as a necessary component of the overall CORE positive feedback loop.
An example to illustrate the transaction “tax” is something that happened over the past weekend. As CORE reached a price of around $9000, a major 60 CORE sell (worth around $540,000 at the time) caused the CORE price to fall heavily.
Normally, this type of event would be a cause of panic, but the 1% transaction fee allowed every CORE farmer to profit from the sell-off. The $540,000 dump meant that $5,400 went back to the CORE community.
High volume and liquidity is the sign of a healthy trading environment. As volume for the CORE-ETH pair on Uniswap continues to rise, not only traders benefit, but farmers as well.
As such, volume for CORE has exploded since its launch on Uniswap week ago. During the peak of CORE trading, volume for the CORE-ETH pair hit $100,000,000 according to Coingecko.
A Developer’s Take on the CORE Community
At the “core” of CORE is the community. After seven days, the CORE community on Telegram has organically grown to around 6,500 members, with around 1,000 active members online at any given point in time.
Anecdotally speaking, one might think of the Chainlink community when looking at CORE users: feverishly supportive, even in the face of adversity (i.e. when they lose money.)
We caught up with X 3, one of the developers of CORE, to discuss his take on this burgeoning, yet exploding community along with the overall DeFi space.
Where do you see CORE positioned in the DeFi space now and in a few years?
“Currently CORE an experiment of how well our COREVault works. This is the mechanism that ensures liquidity doesn’t drop on Uniswap. This is temporary phase as we move closer to ours goals of capturing more value in the DeFi space with our custom vaults, and farming incentives integration. In a few years, I expect that CORE can grow to become an anchor for the entire DeFi movement with our ever-growing liquidity reserves.”
How did the community grow so quickly?
“The community grew quickly because people are looking for something different. In a space that is crowded with low effort forks, new ideas are difficult to come by. I think we provided that for people for the first time in a little while. The best marketing is word of mouth around an idea that people latch on to like CORE.”
How does CORE benefit not only CORE holders, but the overall cryptosphere?
“By providing a permanent well of liquidity, we are enabling all kinds of DeFi applications that weren’t possible before. There are other projects that focus on growing TVL in order to enable secondary applications, but none actually provide any guarantees about the availability of that liquidity in to the future. This is a completely unique concept and we have yet to fully realize, collectively, how important it actually is as an enabling element of the ecosystem.”
Where do we go from here?
Despite all the buzz, CORE is an extremely young project. It will see many ups and downs and will undoubtedly face its fair share of forks. Though, forking CORE might be a monumentous challenge if you ask anyone who’s looked at the code (everyone wants to be CORE but nobody really wants to build CORE.)
What will drive the CORE community’s momentum is a steady source of development.
Some of the items coming up for CORE, as per the developers, are the following:
- Additional liquidity generation events (LGEs) for other CORE pairs and thus additional vaults
- A full audit report of the CORE code conducted by Arcadia Group
- Governance implementation, led by locked in holders of LP tokens
In addition to these items, we can expect everyone involved in CORE, from developers to farmers and traders, to continue to BUIDL the community from the ground up.
To keep up with the latest on CORE, check out the following social channels:
CORE Official Website:
CORE Twitter
https://twitter.com/CORE_Vault
CORE Medium:
https://medium.com/@CORE_Vault
CORE official group:
Announcements channel:
FAQ Channel:
