Dear Crypto-investors,
as you know, there are several downsides to traditional DeFis:
- gas prices are high, so it costs a lot to reallocate funds
- yield rates can change suddenly, mostly in an unfavorable way
- impermanent loss of course, but also
- to be on top of things and grab every new opportunity, you need to spend a lot of time!
Tokemak, started recently on Ethereum, tries to avoid all this! How is this even possible?
Tokemak claims that you deposit single assets like ETH or USDC and let Tokemak do the yield farming for you, without worrying about impermanent loss or finding and choosing the best opportunities. The earnings can be harvested daily in form of "TOKE" tokens, their native token.
Currently the options are still rather limited, it pays 12% on ETH, 27% on USDC and some insane 244% on UNI/TOKE. Soon other assets will be added.
Tokemak promises to protect your initial deposit amount, so unless something catastrophic happens like a hack, you will be able to get back not more, but your original ETH, SUSHI, etc. deposit.
By the way, if you request to withdraw, you need to wait one day of "cooldown". The delay is because your deposited assets are in liquidity pools, which have to be closed out first.
Of note, liquidity deployment hasn’t actually started yet, so currently the rewards are from issuing TOKE to stakers. But in the next few weeks the deposits are supposed to be added to various platforms and pools. “Liquidity directors” are deciding by voting where the funds are invested. If you hold your earned TOKE and stake them, you not only get a staking reward (currently 63% APR) but become a liquidity director for yourself and can be part of that decision making. Smart, isn´t it! Because it incentivizes protocols or exchanges to hold decent amounts of TOKE to influence the decision towards their platform. This gives quite a use case for TOKE from start, reducing selling pressure.
They also have quite a sophisticated system in place to reduce risk and maximize the probability to always give back 100% of your initial investment. For details check out this article from Nat Elison.
Link to Tokemak: https://www.tokemak.xyz/
The price of TOKE (which is currently on an ATH!) indicates, that a lot of people have discovered it already and appreciate the concept. If it goes well, this could be quite a game changer!
No financial advice, DYOR.