Tectonic (TONIC) Review : Is It Good Or Bad Coin Read Our Article

About Tectonic

Tectonic is a cross-chain money market for earning passive yield and accessing instant-backed loans. Investors can deposit their crypto assets into Tectonic to earn dynamic yield without lockup periods while borrowers can borrow liquidity by supplying their crypto assets as collateral.

After its mainnet launch in December 2021 on the Cronos chain, Tectonic plans to increase the number of supported tokens by focusing on assets from EVM-compatible ecosystems. In the future, the project promises to launch leverage yield farming and a governance module for its TONIC token.

Tectonic Point Table

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Who Are the Founders of Tectonic?

Tectonic was incubated by Particle B, a startup accelerator dedicated to incubating projects built on Cronos and the Crypto.org chain. It was founded by Gary Or, an entrepreneur, hacker, and product designer with a keen interest in blockchain technology. As the former CTO of Crypto.com, Or has over ten years of full-stack engineering experience, in which he oversaw the end-to-end development of crypto products across payment, trading, and financial services.

Generate passive yield on your assets

Crypto assets deposited into Tectonic earn attractive APYs based on a dynamic rate according to market demands. Earnings are available immediately with no lockup.

How does Tectonic work?

Funds deposited by users are provided as liquidity to borrowers, who may borrow at variable interest rates. Tectonic’s smart contracts adjust these rates based on each market’s utilization rates.

What Makes Tectonic Unique?

Tectonic is composed of three core modules within the protocol: an interest rate mechanism, a liquidation module, and a community insurance module. The interest rate mechanism adapts a variable interest rate model similar to that of money market protocols like Compound. Interest rates are algorithmically determined based on the utilization rate and supply and demand in the lending pools.

The Tectonic team sets interest rates and other parameters at the beginning of a lending pool, with rates being divided into two stages. Before a threshold of high utilization is reached, interest rates follow a linear curve. After, rates are set according to an upward-sloping curve to reflect the increased demand for liquidity.

The liquidation module liquidates its undercollateralized borrowing position and offers a liquidation discount to liquidators to incentivize keeping the system stable. Before a predetermined amount of liquidators is reached, the core team will also act as one of the liquidators. Later, a governance vote will decide if the core team will be removed from its liquidator position.

The community insurance module is set to go live in the first quarter of 2022 and is to act as a mitigation tool in case of a so-called shortfall event. Tectonic defines this as an event that can harm the protocol’s health, such as smart contract risk, liquidation risk, or oracle failure risk.

Users can stake their TONIC and receive stTONIC in return to safeguard the protocol. However, in a shortfall event, their stake may be slashed as the funds are used to mitigate the damage caused. Stakers will also be able to lock their positions for a minimum of 90 days and accrue a share of swap fees from the protocol.

Keeping your funds safe is top priority

Audited smart contracts

The smart contracts have been audited by leading blockchain security auditors Slowmist.

Insurance fund (Coming soon)

10% of the interest paid by borrowers goes to an insurance fund used in the event that undercollateralized loans are not properly liquidated.

Open source

Interoperability and open source are among the founding principles of DeFi, which Tectonic is proudly committed to.

How Is the Tectonic Network Secured?

Tectonic is built on Cronos, an Ethereum-compatible blockchain launched to run in parallel to the Crypto.org blockchain in a similar fashion to how Binance Chain and Binance Smart Chain work. Cronos is built on the Cosmos SDK, utilizing a proof-of-authority (PoA) consensus mechanism. Furthermore, it also supports the Inter Blockchain Communications (IBC) protocol of Cosmos, allowing it to bridge to the Cosmos ecosystem of DApps.

Conclusion

Tectonic has established itself as a cutting-edge and dependable cross-chain money market platform that gives its customers the chance to earn passive interest and access quick backed loans. For supporters of decentralized finance (DeFi), Tectonic has developed a safe and effective environment with its solid infrastructure and smart contract technologies.

One of Tectonic’s primary benefits is its cross-chain capabilities, which enables users to take advantage of other blockchain networks and assets. Greater flexibility and diversification in investing strategies are made possible by this interoperability, which reduces the risks associated with single-chain platforms.

In conclusion, Tectonic has made a big contribution to the DeFi scene by giving users a complete and effective solution for leveraging the potential of their digital assets. Tectonic paves the path for the future of decentralized banking by focusing on security, cross-chain capability, and user-centric features, giving people the ability to manage their financial future in a quickly developing digital environment.

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