In the current crypto space, the most successful tokens remain bitcoin and Ethereum. Hence, many coins are practically compared to these two tokens before an assessment of performance is deduced. The comparison or combination tells the story about token performance and its projection expectation. More so, a DeFi-ready token needs to establish a valid exchange channel with either Bitcoin or Ethereum; as they are the most popular digital currencies.
Owing to the stable nature of Ethereum, more tokens are being developed on its ERC-20 protocol. Through this, Ethereum’s stability and security traits in often present in new tokens. SMAT, a cryptocurrency developed by Smart Finances employed the use of ERC-20 to bring DeFi services into its modus operandi. Hence, a SMAT/ETH exchange is important.
How does the SMAT/ETH market work?
Smart Finance has developed a pool for the exchange of the trading pair; ETH and SMAT. The developed pool will represent the ground of exchange for the trading pair. However, to reduce the involved risk of market volatility, the digital asset will have their assets deposited in a medium contract. This contract holds the tokens for a defined period before the coins are made available on the exchange pool. This negates the impact of market volatility that may result in the temporary loss of funds.
Notably, the period of wait in the medium contract does not affect user assets. Instead, once an investor deposits their assets into the pool, “SMAR” is immediately created and deployed into the investor’s account. The SMAR deposit actively represents the investor’s share of the pool. Users can decide to redeem the exact share of the pool represented in SMAR, after the period of contract freezing elapses. During the lock-up period, investors also have access to governance functions through sSMAT.
The meritorious edge the medium contract module incorporated by SMAT/ETH exchange affords is the less trading/deposit fee incurred within the system. For instance, if A, B, C, and D deposit into the system at close intervals, the system automatically places their funds in a pool for a short lock-up period. At the time of final deposit into the trading pool, the system deposits the funds of A, B, C, and D into their respective wallets at once with a single transaction. Hence, only a single gas fee is utilized. This module affords users a modest mining pool entrance.
The Time-Lock Mechanism of SMAT/ETH Pool
The time-lock mechanism of the SMAT/ETH exchange was developed to create a stable environment for trading. It is a compulsory scheme for the deployment of assets in the liquidity pool. The involved freezing period is at least 6months, with an option to trigger an extension that is solely dependent on the platform community. It is imperative to wonder if the lock-up period will not negatively influence the conditions of the market and liquidity pool; this is why the platform has developed a workable scheme to allow withdrawal by participating accounts within 3months. This ensures that users are not held against their wish, and they can access their funds at a healthy rate that are independent of market conditions. Thus, for investors, it is a win-win.
The Development of Additional Pools
The primary aim of Smart Finance in its development of the SMAT token is stability. This makes it imperative to uphold the platform affinity for other stable coins in its trading. Although the implementation of additional pools hinges on the resulting activity of the community’s voting process.
A plan is necessary for a platform that is focused on success. This accounts for the defined token distribution method of SMAT for all added pools. If 5 pools are created with the platform’s network, each pool will have an allocation of 10% of SMAT rewards from the total allocated pool. The allocated percentage is liable to a user-defined withdrawal action signaling that withdrawal action can be triggered at any point in time by the investors.
The allocated percentages for the involved additional pools are dependent on the number of pools involved. Thus, if there are only two pools, each pool can wield up to 25% in SMAT rewards.
The Farming Process of the Pool
In the crypto space, many tokens have failed due to the lack of a working relationship between their tokens and other cryptocurrencies. Smart finance has developed channels of transactions and relationships with other tokens to further boost SMAT stability. Through this relationship, SMAT investors have to deposit a Unsiwap liquidity token (LP) or any other incorporated pool’s liquidity token, in the reward contract before they can access the SMAT reward. This process is initiated through the platform’s website.
The deposit and reward relationship that exists between SMAT and other liquidity tokens is a way of bringing more users into the community, and also facilitating the minting process of SMAT tokens. The amount deposited by the investors to access platform liquidity will determine the number of liquidity tokens that are received. In simple terms, the amount of reward an account can access is directly proportional to the total amount of frozen assets in the pool.
Also, to achieve greater platform participation, a primary liquidity incentive has been implemented. The involves a buyback system mechanism. It involves the charging of a minute fee of 0.4% on the purchase and sale of the SMAT token. For a buyback transaction, a total of 0.8% is charged; with 0.5% being charged for the buyback transaction and 0.3% being distributed among the liquidity asset holders as an added benefit. This is a very small transactional charge when compared to the level of service rendered. Furthermore, it will bolster the platform-user relationship through liquidity incentives.
Conclusion
The relationship established by SMAT with other stable tokens like ETH, stablecoins is a great stride. This will help surround the Smart finance system with similar platforms on the ERC-20 protocol. The lock-up mechanism of funds employed by the platform will help users avoid the brutal impact of market volatility. In essence, as an investor, you can deposit all your funds into the SMAT pool with an assurance of safety from price reduction occurrences of the crypto market. Also, the option to withdraw ensures that you can withdraw your funds in any case of need at a very favorable price.
As a crypto asset holder or digital coin enthusiast, buying SMAT should be a priority as it has all it takes to be a game-changer in decentralized finance.
Official Project Sources
🔘 Website: https://smarts.finance/
🔘 Telegram: https://t.me/smartsfinance
🔘 Whitepaper: https://smarts.finance/assets/documents/WhitePaper.pdf
🔘 Discord: https://discord.com/invite/rertF5a
🔘 Twitter: https://twitter.com/Smarts_finance
🔘 Medium: https://medium.com/@smartsfinance
🔘 YouTube: http://www.youtube.com/channel/UCp58Zt6o88nj9jH8tKtvzSw
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