Delta Financial is the latest project by CORE as a tool to improve the liquidity of decentralized option markets, as well as the coreDEX ecosystem.
Decentralized Finance (DeFi) has been one of the most popular and prolific niches in the crypto world in recent months but has suffered from scalability and performance issues as demand continues to grow.
However, this demand is an issue originating from the existing blockchain networks used for the most popular DeFi Platforms but there are other aspects of DeFi that have not been addressed yet and have to do with their financial models.
One of these aspects is the model of liquidity used by most markets.
The Need for a New Approach to Liquidity
The tokenization of assets has been one of the greatest benefits of blockchain technology and cryptocurrencies, driving niches like Decentralized Finance (DeFi) and Non-fungible Tokens (NFT) to be one of the most successful industries in the crypto ecosystem in recent months.
However, this tokenization has been primarily based on the Ethereum network, which has caused a lack of standardization for tokenized assets that have made it harder for different platforms and networks to guarantee liquidity for their assets.
This lack of liquidity not only increases the risk of volatility for big and small investors alike but also results in lower efficiency and higher premiums as tokenization is fundamental when it comes to allowing speculation on non-liquid assets.
Existing Decentralized Finance projects have largely made use of a free movement liquidity model to allow for quick transfer of crypto assets in investing strategies, which has, in turn, resulted in the market being more attractive to investors looking to generate gains on their capital.
While this approach has proven to be successful to some degree, it has prevented tokenized assets from achieving a natural price discovery due to high levels of speculation and market uncertainty.
Open Vesting Liquidity (OVL) is a new model that aims to achieve a balance between attracting capital and improving market certainty, bringing a new level of stability to the DeFi ecosystem by allowing liquidity to be unlocked only over a predetermined time frame
By using this vesting period, the market becomes more resistant to high volatility resulting from a high level of liquidity being remove from the market while still maintaining a high degree of flexibility on the parameters to allow the attraction of new capital.
This is the principle used by coreDex, a DeFi project created by an anonymous group of developers looking to revolutionize the cryptocurrency ecosystem that raised over $60 million in locked liquidity.
How Delta Financial Works
Delta Financial approaches Decentralized Finance by using its OVL standard in conjunction with Vesting Schedule and a Deep Farming Vault to promote healthier options prices for different tokenized assets.
The Delta vesting mechanism is triggered automatically when transactions take place in the platform according to a vesting schedule, which will result in 10% of the tokens being transferred to the users while the remaining 90% will stay locked and be released gradually over a period of 2 weeks.
Users can cancel the transfer before the vesting period is over, but this will result in the immature tokens being distributed to the platform’s vault to be distributed as staking rewards to other users.
While not exactly the same, similar approaches have been used by other platforms to reward holders while punishing day traders by burning assets when transferring them before a specific period has been completed.
Delta Financial will not only use OVL, but also another type of liquidity known as “Permanently Locked Liquidity”, which will allow the platform to decrease volatility by ensuring its liquidity and rewarding providers.
Finally, Delta’s Deep Farming Vaul will collect all of the DELTA tokens generated by user interruption of the vesting schedule, using this capital in cases of high demand that required increased liquidity, effectively operating as a reserve.
The DELTA and rLP Tokens
Delta Financial will make use of 2 different tokens to achieve its goals: the delta token and rLP tokens.
rLP tokens represent the permanently locked liquidity of the platforms and use a mechanism known as Liquidity Rebasing that makes them more difficult to ming over time, increasing scarcity and providing them with a deflationary nature.
This liquidity rebasing will ensure that the size of the liquidity pool stays the same while the price of rLP tends to increase, which also creates an opportunity for early adopters to stake their capital during the limited stacking window to maximize their profits by acquiring rLP at face value.
While rLP tokens are the platform’s yield farming token, DELTA tokens are given as a reward to stakers by using the Delta Vesting mechanism. Any DELTA transfer will create partially locked liquidity and incur a burn to reduce total supply, creating scarcity.
Both of these tokens can be staked by investors to generate passive income in the form of rewards, which will be released in the form of ETH and DELTA.
The total DELTA supply will be 45 million, originally distributed among the liquidity reserve vault (46%), bonding curve liquidity (4%), Delta Team fund (23%), Strategic Partnerships & Growth fund (17%), and R&D fund (10%).
The Limited Staking Window: The Foundation of Delta Financial
The Limited Staking Window is a new staking mechanism introduced by the team behind Core. During this period, users can permanently stake Ether (ETH) to obtain rLP tokens at face value and with a bonus.
Once the 10-day window closes, the smart contract will distribute rLP to participants depending on the ETH they staked, as well as automatically list the token on Uniswap, start the rebasing of rLP tokens, and initiate the farming contracts.
Half of the Ethereum staked by participants will then be deposited into the liquidity reserve vault and bonding curve, with the other half being sent to the dev fund contract.
The DELTA smart contracts code was made available 48 hours before the start of the Limited Staking window to allow users to review it, allowing interested parties to ensure the legitimacy of the project and report any inconsistencies they find.
The CoreDEX Ecosystem
Core has launched other projects before Delta Financial, with all of them experiencing great success among crypto enthusiasts, something that is difficult to achieve for most anonymous projects.
CoreVault launched back in September of 2020 as a means to provide deflationary farming to the masses that distanced itself from the existing approaches of the DeFi niche, which Core’s development team considers to be unsustainable.
CoreVault (CORE) is a non-inflationary cryptocurrency that executes profit-generating strategies autonomously in an entirely decentralized manner.
However, while other autonomous strategy-executing platforms have a predetermined strategy, CORE tokens holders can propose and vote on which strategies will be executed by CoreVault.
This decentralized governance model results in a healthier ecosystem that benefits all of the investors by providing flexibility when it comes to adapt to the ever-changing crypto market, as well as reducing the chances of uncorrectable errors in the design of the strategies.
The deflationary farming used by the team allows users to farm without the need of constantly minting new coins that can dilute its price. This approach consists of not only charging fees on token transfers but also allowing users to earn the fee by farming.
1,413