What is Tokemak? Tokemak is a new protocol designed to create deep, sustainable liquidity, efficiently without the cost, risk, and complexity of traditional liquidity mining methods in Defi. Let’s find out what is special about this project with Weakhand in this article.
To understand more about Tokemak, people can refer to some of the articles below:
- What is DeFi 2.0? All About DeFi 2.0
- Ondo V2 Review: Impressive Transition to RWA
Overview of Tokemak
What is Tokemak?
Liquidity is an extremely important part of a project. Good liquidity helps project tokens reduce price slippage, making the user experience better. Projects that want to attract more liquidity often have to create additional Incentives, the Liquidity Mining program stimulates investors to provide liquidity. But when Incentive resources decrease, liquidity also leaves the project.
Therefore, Tokemak was born to become a decentralized liquidity coordination platform to places that really need liquidity, also known as Liquidity-As-a-Service. Liquidity here will be considered a service. Instead of having to spend an amount of tokens to do Incentive or Liquidity Mining, projects can spend an amount of money to use liquidity from Tokemak.
Tokemak is often suitable for newly launched projects that need a large amount of liquidity but do not have enough potential to list on major exchanges such as Binance, Coinbase, OKX,…
Users deposit their assets into the platform to earn profits as TOKE tokens. This source of liquidity will be poured into projects that need large sources of liquidity. These projects can be exchanges, AMMs, lending platforms,…
Tokemak Operating Model
Tokemak allows users to both provide liquidity and control where that liquidity goes. Tokemak participants include:
Liquidity Provider: Deposit your assets into Reactors (similar to Pools) and earn profits in the form of TOKE tokens. Currently, Tokemak only supports 7 asset types including ETH, USDC, FRAX, DAI, gOHM, SUSHI LP and CURVE LP.
Although it supports quite a few types of assets, one plus point is that the tokemak supports assets such as gOHM and LP tokens such as SUSHI LP, CURVE LP, which attracts holders of sushi, curve, OHM to use the platform’s services. .
NLiquidity Distributior: Stake TOKE into Reactors and receive rewards of TOKE tokens. Liquidity Distributiors have the right to vote on how that liquidity is paired from Genesis Pools and which exchange it is redirected to.
The image below depicts how a token works that deploys liquidity to an external trading venue.
- Step 1: LP provides one-sided liquidity for Pair Reactors (ETH and stablecoins in pools) and individual Reactor Tokens (assets).
- Step 2: Liquidity coordinators (LDs) direct liquidity according to their voting amount.
- Step 3: The system determines the number of assets to be deployed according to the number of assets held in POA (protocol owned assets).
- Step 4: Finally, the system withdraws appropriate amounts of both assets from the Pair Reactor and the asset side of the Token Reactor and deploys them as directed by the LD.
Tokemak operates according to Cycles. A cycle is a week-long period of time, starting on Wednesday and transitioning to the next cycle the following Wednesday.
- LPs can deposit their assets into Reactors at any time, but can only receive TOKE token rewards in the next cycle.
- LDs stake their TOKE tokens into a Reactor at any time. However, the tokemak platform will not proactively direct liquidity until moving into a new cycle. When the new cycle begins, LDs will start earning TOKE rewards and their chosen liquidity direction will be implemented.
The Tokemak Difference
Tokemak centralizes all liquidity into one large Pool. This prevents liquidity from being fragmented. In addition, Liquidity Providers only need to provide single tokens, not pairs, helping users provide more liquidity.
Tokemak also has a mechanism to protect LPs from Impermanent Loss, which is done through surplus/deficit management, reserves and TOKE placed as collateral.
Development Roadmap
- May 17, 2023: Tokemak has officially launched version V2 with many changes that make the protocol more flexible and generate more profits than the V1 version that everyone read above. Read the article Tokemak V2 Review: Entering the LSDfi & Stablecoin Market to understand more about the V2 version.
Core Team
The project founder is Carson, a quite famous figure and highly appreciated by other figures in the industry.
Investor
- April 20, 2021: Tokemak successfully raised $4M in Private Sale round with the leadership of Framework Ventures and the participation of Electric Capital, Coinbase Ventures, North Island Ventures, Delphi Ventures and Consensys.
Tokenomics
Basic information about tokens
- Token name: Tokemak
- Code: TOKE
- Blockchain: Ethereum
- Token classification: ERC20
- Contract: 0x2e9d63788249371f1dfc918a52f8d799f4a38c94
- Total supply: 100,000,000 TOKE
Token Allocation
- 30,000,000 TOKE (30%): Reward Emissions
- 5,000,000 TOKE (5%): Cycle Zero’s DeGenesis Event and CoRE, first TOKE distribution
- 9,000,000 TOKE (9%): DAO Reserve
- 16,500,000 TOKE (16.5%): Contributors
- 14,000,000 TOKE (14%): Team
- 17,000,000 TOKE (17%): Investors
- 8,500,000 TOKE (8.5%): DAOs & Market Makers
Token Release
The amount of tokens for the team, Contributors, Investors, Daos and Market Makers are locked for 12 months from release and distributed evenly over the next 12 months.
Token Use Case
TOKE is a token used to:
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Project management.
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Decide to take liquidity elsewhere.
Exchanges
TOKE can be traded on both DEX and CEX exchanges such as Uniswap(V2), SushiSwap, Gemini, Gate, …
Information Channel of Tokemak Project
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Website: https://www.tokemak.xyz/
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Twitter: https://twitter.com/TokenReactor
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Medium: https://medium.com/tokemak
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Discord:
summary
Tokemak is a project with a novel development direction, targeting Defi’s current weakness of fragmented liquidity and liquidity for one project. Tokemak has been very successful in attracting more than $1B in TVL, but is currently only over $40m.
Tokemak needs to have more Incentive strategies, as well as add more asset types in the Pool to attract more LPs to the project.