Strike is a DeFi lending protocol that allows users to earn interest on their cryptocurrencies by depositing them into one of several markets supported by the platform. When a user deposits tokens to a Strike market, they receive sTokens in return. These sTokens represent the individual’s stake in the pool and can be used to redeem the underlying cryptocurrency initially deposited into the pool at any time. .
For example, by depositing ETH into a pool, you will receive sETH in return. Over time, the exchange rate of these sTokens to the underlying asset increases, which means you can redeem them for more of the underlying asset than you initially put in — this is how the interest is distributed.
On the flip side, borrowers can take a secured loan from any Strike pool by depositing collateral. The maximum loan-to-value (LTV) ratio varies based on the collateral asset, but currently ranges from 50 to 80%. The interest rate paid varies by borrowed asset and borrowers can face automatic liquidation if their collateral falls below a specific maintenance threshold.
Strike is a decentralized finance platform that was launched by Spend.com. There are no team supplies or founder supplies and the protocol will be operated by the community and be fully decentralized.
What Makes Strike Unique?
According to Strike, since the token distribution does not consist of any venture capital, shareholder, founder/advisor token distributions, it maintains the highest level of community distribution. Strike plans to offer a mechanism called “Governors” who can white list tokens to be added quickly to the market making it a scalable DeFi platform.
Strike Coin community governance sets it apart from other similar protocols. Holders of the platform’s native governance token — STRK — can propose changes to the protocol, debate and vote whether to implement changes suggested by others — without any involvement from the Strike team. This can include choosing which cryptocurrencies to add support for, adjusting collateralization factors, and making changes to how STRK tokens are distributed.
These STRK tokens can be bought from third-party exchanges or can be earned by interacting with the Strike protocol, such as by depositing assets or taking out a loan.
Strike Coin is a decentralized money market that enables users to borrow and supply digital assets to the protocol within a non-custodial environment directly within the Ethereum blockchain. This means that users, at all times, have control of their digital assets and are bound by the protocol’s parameters directly on-chain. The protocol is autonomous and algorithmic with its parameters being controlled by governance proposals and yield curves. Strike users can access the platform via smart contracts, the Strike API, or via a frontend application. The main functionality of Strike is to enable users to supply collateral to either earn as a supplier or to use as collateral to borrow other digital assets from the protocol.
How Many Strike (STRK) Coins Are There in Circulation?
Like many digital assets, only a fixed number of STRK tokens will ever come into existence. The total supply is capped at 6,540,888 STRK and as of writing, approximately than a third are in circulation (2,540,888).
Out of these 6,540,888 Strike tokens, 4 million tokens will be distributed to Strike users over a 8-year period. The exact rate of STRK emission is subject to change over time, as voters are able to increase or reduce the emission rate by passing a proposal through community governance.
Strike Token (STRK)
The Strike Protocol is governed and rewarded by its native cryptocurrency called Strike Tokens (STRK). Strike Tokens are built and deployed on the Ethereum blockchain and are ERC-20 based assets. STRK enables users to create proposals, vote on proposals, and participate in liquidity mining incentives on the platform. Strike Tokens were made available through migration of Spendcoins at a 1:1,000 ratio. That means the current circulating count of Strike will be approximately 2,540,788 STRK representing a fully diluted community and decentralization at its peak.
The team tokens from Spendcoin representing the remaining balance of the initial 4 billion SPND will be burned This means there will be no team supply, the protocol will be decentralized, and the users will mine the remaining supply until the max supply is reached.
Within Strike, there are native tokens called “sTokens” that are pegged to the underlying supported digital asset. For example, sUSDC is pegged to USDC. These sTokens are portable and can be transferred between Ethereum Wallets. The primary purpose of sTokens are to represent the proportionate value of the underlying asset on the protocol and to redeem the underlying asset at any time.
With the primary use cases defined, sTokens can be minted and burned directly on the protocol via the user-interface, API, or smart-contracts. The process to mint sTokens means that the underlying digital asset has been supplied to the protocol. The burn process relates to redeeming the underlying asset and destroying the sToken th
How is Strike Finance Secured?
Everything on Strike Coin is handled automatically by smart contracts, which act to mint sTokens after Ethereum and ERC20 assets are deposited, and allow Strike users to redeem their stake using their sTokens.
The protocol enforces a collateralization factor for all assets supported by the platform, ensuring each pool is overcollateralized at all times. If the collateral falls below the minimum maintenance level, it will be sold to liquidators at a 10% discount, paying down some of the loan and returning the remainder to an acceptable collateralization factor.
This arrangement helps to ensure borrowers maintain their collateral levels, provides a safety net for lenders, and creates an earning opportunity for liquidators.
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