Crafting Finance – the largest synthetic asset issuance protocol on Polkadot
NFT has recently become a prominent topic in the cryptocurrency market. In terms of trading volume, all investors are primarily focused on the prospective NFT market, which has reached record levels. Due to the overheating of the market and the high prices of NFTs, most retail investors do not have the opportunity to buy these NFTs.
Like traditional works of art, the NFT is suffering from a problem of illiquidity. Without real-time pricing, it is difficult for NFTs to be collateralized. Therefore, NFT is a competitive asset that still has many shortcomings such as liquidity, difficulty in valuation, low capital efficiency because it is not collateral…
As a comprehensive aggregate platform asset, Crafting Finance can provide anything the NFT market needs and has the functionality to fragment NFTs. So what is Crafting Finance? Let’s find out with the help of the GTA Research team in the article below.
Crafting Finance is a synthetic asset issuance protocol and contract trading platform based on the Polkadot contract chain. The Crafting protocol has swap, loan, loan, and asset pooling functions. Crafting is a mechanism that binds and redefines how DeFi functions by merging its greatest elements.
Crafting use DOT, KSM, BTC, ETH and CRF issued by the project as collateral and aggregate any other cryptocurrencies or off-chain assets such as stocks, bonds, gold through oracles and smart contracts.
Users can create certain assets like USD by collateralizing supported tokens like DOT, KSM, BTC,ETH, CRF and automatically become a position in the asset. Users can also mint other assets through trading and to achieve the purpose of shorting assets. User-generated assets are liabilities corresponding to the entire system. The debt ratio of each user has been determined at the time of the mortgage, so that their respective returns can be calculated. Because such a collateral pool model does not require a counterparty, it perfectly solves the problems of liquidity and transaction depth in the DEX.
Forge (Forging Synthetic Assets)
The synthetic assets issued by the entire system are all created by certain stake users. Initial types of collateral include DOT, KSM, BTC, ETH, CRF, and the collateral rate depends on the change of the collateral itself. In the future, collateral and collateral ratios could be adjusted through community governance. When users stake collateral and create aggregate assets, corresponding liabilities are created. When the user wants to unlock the collateral, they have to repay the debt, which means the user has to cancel the previously created synthetic assets.
Assets aggregated by directly staking collateral in the entire system can be divided into different categories such as stablecoins (RaftStable), synthetic assets (Raft), synthetic bonds (BondRaft) and smart contract assets (UnivRaft).
• StableCoin (RaftStable)
StableCoin is a very important part of synthetic assets, for example rUSD and rEuro can be used as system currency as well as contract trading. Furthermore, stablecoins can also be used as loan collateral. Users can lend – borrow stablecoins like rUSD and exchange it in the real world.
• Raft (Simple Composite Asset)
A simple synthetic asset can be cryptocurrencies like rBTC and rETH, stocks like rAAPL, gold rXAU or any real world asset.
BondRaft (Composite Bonds)
Synthetic bonds are interest-paying synthetic assets issued by the system.
• UnivFaft (Intelligent Composite Asset)
The smart synthetic asset is that the user can issue any kind of financial contract through this system. As such, Crafting can stimulate any financial derivative including assets of the whole world.
Sahring Debt Pool
When a user creates a composite asset, the asset can be put into the Sahring Debt Pool (SDP) and the user will be assigned a fixed debt ratio that is the ratio of the user’s aggregate asset value to the value of the asset. all properties aggregated in the whole system. “Fixed” means that this ratio will not change due to changes in asset prices and will be used to calculate user profit and loss. This rate will only change when a new user creates a new asset or an existing user destroys an existing one.
Optional Joining of SDP
The principle of the SDP trading mode is that the user must generate any synthetic assets and participating in the Debt Pool will automatically become a long-term asset holder. Even if users create a stable currency, it automatically becomes a long position in the stablecoin, causing losses as other assets rise. This loss is called “crafting loss”. “. This is similar to another loss in liquidity mining.
To avoid this loss, Crafting gives users the option of whether or not they want to join a debt pool. So users can opt out of the debt pool if they don’t want to take the risk. In this case, the user can basically use the system as a lending platform and the system will charge interest on the assets created by the user. Interest rates will be determined by community governance later.
In order to incentivize users to join the debt pool as much as possible, users who join the debt pool will earn a percentage of the system’s rewards.
Kingsman is an exchange that offers conversion of various synthetic assets and contract trading, using trading in SDP. This Kingsman DEX will not require a counterparty and has no trade depth issues.
All synthetic assets will be convertible into other synthetic assets on Kingsman. For example, cryptocurrencies like rBTC, rDOT, rETH… to foreign exchange assets like Euro, YEN, XAU or even stocks… Kingsman exchange also supports derivative trading. All these assets are systematically aggregated, notaggregated not real assets and their conversion rates are determined by external real prices provided by Oracles. This conversion does not require a counterparty and users can always convert all their assets supported by the system with unlimited liquidity.
Debt Pool is the aggregate pool of assets generated by all users. It records real-time inventory of all aggregate assets in the system.
Users who trade or convert synthetic assets on Kingsman will be charged transaction fees. The fee rate is set at 0.3% and all these fees go into the fee group. And all fees will be converted to CRF using auction or DEX. 40% of the fee will be distributed as a reward to users who meet the specified collateral rate throughout the system, and the reward ratio is determined by the debt ratio. Another 40% will be cancelled. The remaining 20% will be reserved for future system maintenance and development. The system stipulates that only users who have CRF collateral and participate in SDP can receive rewards, as an incentive for CRF holders. Because mortgage prices fluctuate, it is regulated that only users who meet the mortgage rate are eligible for the bonus.
Those who opt out of the SDP will pay interest on their aggregated assets and the interest goes to the Interest pool. 80% interest will be converted to CRF and converted CRF will be destroyed as another way to support the price of the token. The remaining 20% will be reserved for future maintenance and development.
Since contract transaction prices need to be read from outside sources, oracle is a very important part of this project. In the first phase, the system will use centralized oracles provided by the project team, and in the future, Crafting will introduce more secure decentralized oracles.
Synthetix, Mirror, Uma…
Comparison table between Crafting Finance and similar projects.
When was the project established?
The project was established in April 2021
The project’s Twitter was set up in April 2021 with 12.9K Followers.
2nd quarter of 2021
• Launching DOT and CRF staking functions, creating synthetic assets, including rUSD, rBTC, rETH, rAAPL, rXAU, etc.
• Debt pool functionality launched: When a new user creates or destroys rUSD, the debt ratio is redefined and the user’s profit is calculated based on the change in asset price.
3rd quarter of 2021
• Launched Kingsman version 1.0.
• Launch of fee pool function: transaction fees are included in the fee pool to complete the benefit distribution of CRF users.
• Launched trading functionality on top of the Web, allowing users to freely trade various synthetic assets. Convenient for users to stake CRF or DOT to mint rUSD and destroy rUSD. Allows users to view debt ratio, total system debt, personal aggregated asset balance, reward earnings, and more.
Quarter 4 of 2021
• RaftBond will be available for issuance and trading.
• UnivRaft will be operated for universal synthetic assets, users can use it to issue smart assets.
• Will launch a brand new oracle system that can accommodate all asset prices worldwide.
Team – Project team
Investors & Partnerships
Crafting Finance has received support from leading institutional investors in the industry, including Signum Capital, CMS Holdings, NGC Ventures, Continent Capital, LD Capital, DFG Capital, Waterdrip Capital, Longhash Ventures, Northbund Capital, PAKA Capital, SNZ Holdings, Spark Digital Capital, Titans Capital, AU21 Capital and CryptoDiffer.
Crafting Finance token details – CRF
Crafting Finance Token: CRF
Max Supply: 2,000,000,000
Liquidity Incentive: 40%
Initial Liquidity: 1%
Ecosystem Partners: 14%
Token Release Schedule
Token Use Case
CRF is Crafting Finance‘s governance token as well as the governance token. Parameters related to Crafting Finance including increase – decrease of types of collateral, adjustment of mortgage rate … will be determined by voting by CRF holders.
There are many ways to support the long-term value of CRF such as:
All unallocated and future tokens issued each year will be used as rewards, depending on the type of user. Fees charged in Kingsman transactionstransaction will be converted to CRF through auction or DEX. 40% of the reward will be distributed as a reward to users who reach the specified commitment rate throughout the system. The reward ratio is determined by the debt ratio. Another 40% will be burned. The remaining 20% will be used for the system. Users who opt out of SDP will pay interest on their aggregated assets. 80% equity will be converted to CRF and converted CRF will be destroyed. The remaining 20% will be used for the system.
Where to buy and sell CRF tokens?
There is currently no information about IDO or the sale of CRF tokens. GTA Research Team will update you as soon as possible.
Crafting Finance, developed by the world’s leading blockchain developers, crypto scientists, research scientists and knowledgeable professionals in finance, brings together financial products. Core decentralized government in one place, unmatched by other projects in the industry. This is a project invested by a lot of large funds and Crafting Finance products can provide anything the NFT market needs and has the function of fragmenting NFTs.
The above is all information that the GTA Research team has researched about the Crafting Finance project and is not investment advice. Hope this article will help you get the necessary information and give your personal opinion about the project.