SEOUL, Korea, Feb. 12 2022 (GLOBE NEWSWIRE) — Recently, Tower Finance proudly announced the launch of its Algorithmic Stablecoin. Algorithm-based stablecoins are new cryptocurrency variants designed to provide better price stability. In today’s market, more and more users are getting interested in it, as it can also help balance the supply and demand of the circulating asset.
Stablecoin Algorithmic Protocol, developed by Tower Finance, seeks to offer significantly improved capital efficiency compared to guaranteed stablecoins.
What is TowerFinance?
Tower Finance is a fractional-algorithmic stablecoin, pegged to the US dollar, built on the Polygon network. The protocol plans to maintain TWR price stability by storing enough collateral in time-locked smart contracts. The USDC is deposited into the protocol when a user mints the TWR token, while the CUBE token, which is used for minting, is burned. When the user redeems TWR tokens, the protocol redeems the USDC and mints the required number of CUBE tokens. This allows arbitrageurs to help maintain price stability.
Aiming to solve the “stablecoin trilemma”
Tower Finance aims to provide a solution to the so-called “Stablecoin trilemma” of decentralization, capital efficiency, and price stability by introducing TWR, its split-collateral algorithmic stablecoin. Tower Finance aims to build an ecosystem that incorporates both collateral and high capital efficiency, thereby developing stability.
By implementing a floating collateralization ratio, TWR not only maintains its peg in the most efficient way possible, but it also captures value for CUBE holders and produces a return for its community of holders.
Implementing DeFi 2.0 via Protocol-Owned Liquidity and Protocol-Leased Liquidity
Tower Finance is the first stablecoin algorithmic protocol to adopt the “Protocol Owned Liquidity” model introduced by OlympusDAO. Although the structure is different, the underlying idea is similar. The protocol charges a penalty to users who end the conditions for acquiring farming rewards. When this happens, the protocol uses 2/3 of the perceived penalty to provide liquidity. Half of it is converted into USDC and used to provide liquidity. The remainder, which amounts to 1/3 of the penalty collected, is sent to the Profit Manager.
When TWR is combined with USDC and CUBE, the protocol does not immediately burn CUBE. Instead, 50% of CUBE is sold to temporarily create a CUBE-USDC LP to provide additional liquidity. We call this “Protocol Rented Liquidity” because the tokens intended for burning are borrowed for a short period of time to add liquidity to the Tower ecosystem until it is removed via governance decisions, in which case USDC is converted to CUBE and burned.
With a commitment to long-term sustainability but a fit-to-market and ultra-high-yield/yield-enhancing go-to-market strategy, it is perfectly set to pave the way for stablecoin protocols in the DeFi 2.0 era.
Tower Finance officially launches Valentine’s Day: 14and of February, 6:00 UTC.
Brand: Tower Finance
Contact Jeremy Parker, Head of Marketing
Email: [email protected]
THE SOURCE: Finance Tower