corTokenization
The exclusive access to Synthetic Leveraged Assets.
What Is corTokenization?
CorTokenization is one of the main processes of Premium Trading where users cast corTokens by staking native tokens at a 1:1 ratio. However, the corTokens received are locked right after casting and can only be defrosted once certain actions are completed, such as liquidity provision and corToken trading.
CorTokenization builds intrinsic value for assets through premium. Let’s consider two extreme scenarios. Under one market state where no participants hold the assets but want to get engaged in the premium pool of this specific asset, they must purchase the assets from either CEXs or DEXs or Cross Swap on Coral Finance. This significantly boosts the liquidity of the assets. Another state where all users possess the assets and participate in the particular premium pool, corTokenization essentially transfers and mitigates the speculative bubble in the secondary market in that the supply would be dramatically reduced.
The price growth boils down to the supply-demand relationship. That’s the intriguing reason why most projects never get tired of starting staking and staking programs. CorTokenization, or broadly speaking to Premium Trading, offers an advanced alternative solution.
What Is the Relationship Between corToken and Token ?
Underlying Claim: The corToken represents a derivative form of the native token within Premium Trading Mechanism innovated by Coral Finance, maintaining a constant 1:1 ratio.
Simply speaking according to the picture above, the casted amount of BTC equals the amount of corBTC received, but the price may not be equal due to the premium.
Value Delivering: The values in corTokens are conveyed by the premium incentives and the prices determined by the market behaviors. However, the assessment of values in native tokens chalk up to a variety of factors.
Liquidity State: CorTokens are initially in a locked state unless specific actions happen to have them defrosted, while native assets are normally released in circulation according to vesting schedule.
Acquisition Approach: To obtain corToken, users need to proactively partake in the Premium Trading or directly buy from corSwap on Coral Finance. You can always acquire native assets from various accesses.
Other Features of CorToken
CorTokens are casted immediately from native assets, but the other way around is slightly different. Tokenization will not happen until a new Tide begins. Native assets only become “active” at the start of a new Tide.
Cortokenization to maintain a 1:1 relationship between native assets and corTokens is to eliminate the risk of liquidation that most traders are afraid of and that leads to catastrophic chain effects when the black swan happens. Unlike other perpetual derivative platforms, users on Coral Finance will not be facing liquidations even during market downturns or unfavorable price movements in that they are also able to get their native assets back. This design increases capital adaptability and flexibility amidst the unpredictable swings of the cryptocurrency markets.
The initial price of corToken is primarily determined by the liquidity pool, with the same principle being utilized on most DEXs. Each corToken operates based on its own liquidity, with price fluctuation that reflects market behaviors.
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