What is Strike (STRK)?
Strike is a DeFi lending protocol that enables users to earn interest on their cryptocurrency through lending. Users will receive sTokens back when they deposit tokens into the Strike marketplace. The sTokens represent the shares, the proportion of individuals in the group. They can be deposited into the pool at any time and used to redeem the original base cryptocurrency.
Example: When you deposit ETH to a pool, you will receive sETH. Over time, the exchange rate of these sTokens increases with the underlying asset. Here's how the interest spreads over the amount you initially set when you can exchange them for more of the underlying asset.
On the other hand, by depositing collateral, a borrower can get a secured loan from any of the Strike groups. The maximum loan-to-value (LTV) ratio can vary by collateral, but currently ranges from 50 to 80 percent. If their collateral falls below a specific retention threshold, depending on the asset and the borrower may face automatic liquidation, the interest rates paid vary.
Highlights of Strike
Strike token distribution does not include distribution of any venture capital, shareholder, founder/advisor tokens. So the project maintains the highest level of community distribution. Strike offers a planned mechanism called “Governors” that users can whitelist tokens to quickly add to the market. This helps turn itself into a scalable DeFi platform.
The difference of the project lies in the community governance of Strike. Holders of the native governance token – STRK – can request changes to the protocol, debate and vote on whether to implement changes proposed by others. Also does not need any involvement from the Strike team. This can be done in choosing which cryptocurrencies to add support, adjusting collateral factors, and making changes to how the STRK token is distributed.
Strike operating system
Smart contracts that handle everything on Strike are handled automatically. Once Ethereum and ERC20 assets are deposited, the system will work to mint sTokens, which will allow Strike users to redeem their sTokens.
A collateral factor for all assets is the execution protocol backed by the platform, which ensures each pool remains overly centralized at all times. The Strike will be sold to the liquidator at a 10% discount on partial loan payments and pay the remainder back to an acceptable mortgage level if the collateral falls below the minimum maintenance level.
This arrangement helps ensure borrowers maintain their collateral levels, while providing a monetization opportunity for liquidators and providing a safety net for lenders.
The native tokens in Strike are called “Stokes” which are pegged to the underlying digital asset and backed, for example, SUSDC is pegged to USDC. These tokens are portable and transferable between Ethereum wallets. Stokens is a proxy for the commensurate value of the underlying asset on top of the protocol for the purpose of redeeming the underlying asset at any time.
sTokens are the primary means of interacting with the Strike protocol. When a user mines, redeems, or borrows, repays a loan, liquidates a loan, or transfers sTokens, they use the sToken contract.
Currently, there are two types of sTokens, SErc20 and SEther. Although on the interface both types show EIP-20, SErc20 contains an underlying ERC-20 asset. Whereas SEther is simply Ether itself. The interfaces are therefore slightly different depending on the type of core functions involved in passing content into the protocol, each of which is shown below.
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