1) Flexible & powerful leveraged liquidity providing
2) Lend to earn passive income
Users can deposit assets into lending pools to earn interest on their deposited assets. It provides users with a way to earn passive income.
3) Stablecoin & LST Optimized leveraged yield farming
By implementing a new interest rate model, the protocol will serve as an innovative platform to optimize earnings by minimizing borrowing costs and reducing interest rate fluctuations.
Smart contracts of Extra Finance are audited by PeckShield.
Let’s consider the example of Alice, who wants to open a 3x leveraged farming position on $ETH/$USDC to take advantage of the high yield rate. Here’s how she can proceed:
Benefits:
Leverage farming and lending on Extra Finance offers several advantages:
While Extra Finance helps yield farmers amplify their yield rate, users should be aware of the following risks:
Leveraged Yield Farming (LYF) is a key feature of Extra Finance, which allows users to amplify their returns on investments by borrowing additional funds to invest in a liquidity pool. This is achieved by using the funds as collateral to borrow stable/non-stable coins, which are then used to purchase additional tokens. These tokens are then added to the liquidity pool, increasing the overall value of the pool and providing additional returns to the user.
Practically, LYF is one of the most efficient ways to maximize your capital efficiency. It requires no additional asset as collateral, which means you can enjoy the full earning amplification from the leverage. And also, a well-designed LYF strategy can greatly reduce the effect of impermanent loss (IL).
To make those points clear, let’s take an example: Luca has $1000 ETH and $1000 USDC. He deposit and stake those tokens into the ETH-USDC pool to enjoy a 20% APR liquidity farming return. However, he is not satisfied with a 20% return regarding long-term volatility. So he starts to reinvest his earning interest into the pool. The reinvesting can help boost the 20% APR to reach a maximum…… 22.1% APY.
Now Luca is happy with the APY, but another issue begins to bother him — the infamous impermanent loss (IL). With 3x leverage, not only the return but also the potential IL will be larger. IL is a long-standing problem with AMM, many tried to solve but yet no perfect solution.
However, with LYF and a smart strategy, you can actually turn this disadvantage into an advantage. Luca predicts the price of ETH will keep rising in the next three months (this Luca is smart), so instead of borrowing the equal value of two assets ($2000 ETH and $2000 USDC), he decides to remain the same leverage rate (3x) but only borrow USDC ($4000 USDC). Why is that? Because borrowing more USDC than ETH is actually creating a long position of ETH!
Extra Finance uses two tokens to manage its utility and governance:
$EXTRA
— ERC-20 utility token of the protocol$veEXTRA
— ERC-20 governance token of the protocol$EXTRA
is used for rewarding liquidity providers through emissions.
$veEXTRA
is used for governance. Any $EXTRA
the holder can vote-escrow their tokens and receive a $veEXTRA
in exchange.
The lock period (also known as the vote-escrowed period, hence the ve prefix) can be up to 1 year (52 weeks), following the linear relationship shown below:
$EXTRA
locked for 52 weeks will become 100 $veEXTRA
$EXTRA
locked for 13 weeks will become 25 $veEXTRA
The longer the vesting time, the higher the voting power (voting weight), and rewards the $veEXTRA
holder receives.
$veEXTRA
is the voting power in Extra Finance’s on-chain governance process. Users could use it to initialize a proposal, or cast for/against community proposals.
By holding $veEXTRA
, users can unlock the following benefits and features:
$EXTRA
token incentives.The protocol fee comprises various tokens collected into the treasury and is shared once per epoch. It is used to buy back $EXTRA
tokens from the market and then distribute them to holders of $veEXTRA
tokens.
A portion of the $EXTRA
tokens allocated to the community will also be assigned to $veEXTRA
token holders, subject to a specific emission plan.
At the end of each epoch, rewards will be collected for distribution.
Lending pools may experience high demand and potential shortages when implementing leverage farming. However, holders of $veEXTRA will have the privilege to borrow from these pools.
The $EXTRA
token has a hard cap of 1,000,000,000 tokens, with the following allocation:
The owner authority of the EXTRA token contract has been destroyed. Verify here. No more EXTRA can be minted.
Monthly unlock for a period of 3 years. Monthly emissions start at 20M $EXTRA (2% of the total supply) and decay at 1% per month.
Emissions are planned to be allocated to:
$EXTRA
token liquidity pools on mainstream DEXes like Velodrome$veEXTRA
holders ($EXTRA
token staking users)According to a well-defined plan that aligns with the stage of protocol development.
For instance, during the early stages of the protocol, emissions primarily focus on lending pools on Extra Finance. This ensures that liquidity providers can borrow their desired amount of assets to implement leveraged farming.
Quarterly unlock for a period of 3 years. Each quarter unlocks 2% of the total supply.
This section primarily focuses on protocol-to-protocol collaborations, protocol grants, and business development initiatives.
6-month cliff period + 30-month vesting period under a quarterly unlock plan. (After 6 month locking period, each quarter unlocks 1% of the total supply.)
A comprehensive airdrop plan will be unveiled through our official blog, outlining the specific details and schedule. The airdrop itself will be executed in a series of sequential batches, with allocations designated for the community, ecosystem participants, and early users of the protocol. The initial airdrop will be carried out by the team, while subsequent airdrops will adhere to established governance procedures.
To create liquidity pools for $EXTRA
tokens on mainstream DEXes. The initial liquidity pool would be EXTRA-USDC
on Velodrome.
$EXTRA
token vesting plan is as follows, all tokens with a cap of 1,000,000,000 will be unlocked by the end of 36 months since its token launch.
Extra Finance emerges as a dynamic and innovative player within the cryptocurrency landscape. Its robust features, user-friendly interface, and commitment to security stand out, offering users a comprehensive and rewarding experience. With a clear focus on DeFi solutions and a growing community, Extra Finance showcases its potential to contribute significantly to the evolution of decentralized finance. As the crypto market continues to evolve, Extra Finance remains an intriguing platform to watch, with its unique offerings poised to make a lasting impact.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
George Town, Grand Cayman, 22nd November 2024, Chainwire
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