CORE Vault architectures deflationary crypto farming activities, deviating from the common practice of minting tokens to issue out as rewards. Therefore, instead of minting tokens, it distributes 1% of transaction fees as rewards. This is not only sustainable but reduces inflationary pressures on the CORE token.
Minting tokens to use as rewards negatively affects its price, decreasing in the long run. The presale liquidity generation event demonstrated that it is possible to rely on transaction fees as farming rewards instead of minting.
During the first and second Liquidity Generation Events, CORE’s deflationary farming mechanics test the economics behind the system. On the first day, CORE generated $1 000 000 from staking, while the volume was $100,000,000. Notably, CoreVault sets the pace as the first high yield deflationary DeFi protocol. Its permanent liquidity locking feature enables it to maintain high yields over many years, sustaining its long term growth.
To buttress its growth trajectory, it maintains synergy between the farming community and traders. While farmers lock up their tokens, triggering a rise in the CORE tokens’ price floor, traders will continue to pay transaction fees at Uniswap. This is a unique set up that enhances stability and balance in the system.
Liquidity Generation Events
The First Liquidity Generation Event (LGE) marked the presale of CORE. By design, each liquidity generation lasts for seven days. These events allow CORE to attract new capital from the yet untapped sources. The Liquidity Generation Event gives all participants a fair advantage because the price of the CORE token is the same for everyone during the event.
Interestingly, based on the CORE token mechanics, there is a near guarantee that after any LGE, the price of the LP token will rise in the secondary market. This creates an additional benefit to all contributors. During the previous Liquidity Generation Events, participants had the opportunity to contribute wBTC, ETH, and WETH as liquidity. In return, they received Liquidity (LQ) Tokens as rewards for providing the much-needed liquidity.
Users stake the LP coins in Automated Strategy Vaults. The vaults generate different yields for the various token types. The sustainability of the CORE token is definitely due to the underlying fundamentals. Since it is not possible to remove liquidity and mint coins, the token has a fixed price floor. Therefore, there is no chance of hyperinflation.
The fact that the vault locks the initial liquidity forever does not mean that Liquidity providers completely lose their initial investment. The LP token holders can exchange their coins for wBTC, Ethereum, or any other cryptocurrency in the secondary market. However, the liquidity of the pools remains intact.
Another impressive point is that the different liquidity pools relate to one another. For instance, when a new liquidity pool comes into existence, the collective pool becomes stronger than before because of some ripple effects arising from arbitrage between the pools. When one pool increases the price of the CORE, the other pools follow suit.
According to CORE Vault’s blog post, the long term goal is to grow the community and the project via top execution strategies. CORE Holders make decisions on fee structure, new pools, rebalancing, and disabling of pools. It is the team and governance focus which enables the APY to remain high in the vault pools.
The Core community is expanding and anyone can join. Participating in these social platforms helps you to appreciate the role of the CORE, a non-inflationary cryptocurrency. The main social platforms are Telegram, Discord, Twitter, and Github.