In the early days of decentralized exchanges (DEXs), emerging projects trying to create their own liquidity pools often relied on offering high annualized percentage yields (APYs) to attract liquidity providers. This is often driven by the rapid appreciation of governance tokens, which are often used to incentivize liquidity.

However, when governance tokens fail to maintain their market value, liquidity drains quickly as investors continually seek more lucrative opportunities. For the project, this means the arrival of a death spiral.

At present, many projects are still facing the challenges of death spiral and bubble economy. They may not only lead to a plunge in token prices and a shortage of liquidity, but may also cause heavy losses to users who participate in transactions or provide liquidity, while weakening high-quality liquidity. long-term viability of sex pools. There is no doubt that without a reliable source of liquidity, the project will most likely face the challenge of gaining momentum and achieving sustained growth. These problems reflect the urgent demand for excellent project starters in the current market.

The project Coral Finance that we will introduce today is committed to providing a derivatives trading platform that can provide sufficient liquidity and transaction depth for start-up projects.

Coral Finance - A High-quality Derivatives Trading Platform

Coral Finance provides a platform for the project party, on which it creates a high-quality asset pool, which can provide sufficient liquidity and transaction depth for the project to ensure the stability of the token price and the successful launch of the project.

Users of Coral Finance can earn income by providing liquidity and benefit from the rise in token prices, thus forming a positive economic cycle of "earning from transactions". In addition, the platform provides capital hedging to protect users' investments against market volatility and unforeseen events.

In addition to this, Coral Finance has also developed a new incentive mechanism called Premium Incentive Mechanism (PIM) to encourage users to participate without generating inflation. This mechanism stabilizes the market and prevents market bubbles by creating a more sustainable flow of liquidity.

With the above measures, Coral Finance provides effective solutions for project parties and users. Users who provide liquidity can earn income and benefit from rising token values while enjoying the added protection of capital hedging. Coral Finance is also an ideal platform for those looking to participate in high-quality trading activities and earn income through positive economic cycles.

In addition to these core functions, Coral Finance will continue to work hard to develop new tools and services to further improve the DeFi ecosystem. Coral Finance believes that by addressing these critical issues and developing innovative solutions, a more stable, efficient, and accessible DeFi market can be created to better serve everyone.

Mechanism Introduction

1. High-quality transactions

Premium Trading is an innovative trading mechanism based on the Automated Market Maker (AMM) model. It aggregates liquidity for efficient market making and allows users to trade crypto assets at higher prices. The amount users can sell is proportional to the liquidity they provide in premium pools.

Unlike traditional exchanges, Premium Exchange does not rely on a centralized order book. Instead, the algorithm will set the price based on the pool's asset ratio. This will allow for more efficient transactions and better price discovery.

Premium pools are the backbone of premium trading mechanisms on Coral Finance. Users obtain high-yield returns by providing liquidity to the pool and trading cTokens at a premium. In other words, premium pools generate returns for users who provide liquidity by locking assets. The premium is the difference between the return generated by the pool and the return earned by simply holding the asset.

Coral Finance's flagship product, cSwap, is at the heart of its premium trading solutions. Through premium pools, users can add liquidity and trade cTokens minted from the original token, thus leveraging cryptocurrencies organically. While creating new markets for trading cTokens as underlying assets, the platform's trading strategies are highly applicable, ensuring a seamless trading experience.

2. Premium Incentive Mechanism (PIM)

Coral Finance's Premium Incentive Mechanism (PIM) aims to provide users with more economic value and improve capital efficiency. Traditional incentive mechanisms such as staking and liquidity mining cannot motivate users to continue adding liquidity due to the decline in annualized percentage yield (APY) over time. This leads to a vicious cycle of participants mining and selling, leading to inflation and loss of user assets.

On the other hand, the concept of veToken combines incentives and governance, but its lock-up period is too long, forcing users to bear the time cost. PIM provides a better solution that allows users to explore high yield returns during a dynamic lock-up period while keeping APY at a high level. In this way, users can maximize return on investment while maintaining capital efficiency.

PIM is an excellent solution for users who want to obtain high returns without being locked in by long-term investment. By offering a dynamic lock-in period, Coral Finance allows users to optimize their ROI while maintaining flexibility. With PIM, users can enjoy the benefits of a high APY while avoiding the risks associated with long-term investing, making it an attractive option for those looking to maximize their ROI.

3. Ecosystem participants

The Coral Finance ecosystem mainly includes two major players: traders and liquidity providers.

1) Trader

Traders are the core participants in the Coral Finance decentralized exchange. They look for the best price and execute the trade. In addition, traders may pay or receive funding fees based on funding rates. Trading on Coral Finance can provide profitable opportunities through market fluctuations and price differences.

2) Liquidity provider

Liquidity Providers (or LPs) are participants who deposit assets into premium liquidity pools in order to contribute to matching and deploying liquidity. They receive a premium from trading cTokens in the cSwap area as income.

Features

1. Liquidity premium

Coral Finance has launched the Premium Trading Mechanism, a groundbreaking mechanism that unlocks high-yield returns for users by leveraging the premium value typically not found in cryptocurrencies. The premium is the price difference between the native token and the cToken and can be as high as 2x to 5x or more depending on the initial liquidity of the premium pool. Algorithms set prices in proportion to the pool's assets, enabling efficient market making and better price discovery, thereby providing users with more profitable trading opportunities.

1) cToken

cTokens are minted tokens that participants earn when they deposit native tokens into the cToken smart contract. These cTokens represent the underlying claim on your deposited assets and can be exchanged 1:1 back to native tokens at any time.

2) Coin & Revert

Coin & Revert is one of the steps for users to participate in premium pools. The process of obtaining cToken by locking the native token in the smart contract is called Coin, and the reverse operation is called Revert.

cTokens are a 1:1 representation of your native token and are destroyed when you withdraw. Users can perform Coin & Revert at any time, subject to a lock-up period.

3) Unfreezing Mechanics

Unfreezing refers to the process of unlocking the locked cToken after the user adds liquidity and pledges LP to the Catalyst. This takes a period of time during which the user receives a certain amount of unstaked cTokens per day.

4) Catalyzer

Catalyzer is a tool for unfreezing cTokens written in smart contracts. Participants need to stake LP into Catalyzer to successfully start unfreezing. It should be noted that unless you add liquidity and stake LP into Catalyzer, you cannot unfreeze any cToken.

2. SWAP

Trading on Coral Finance is simple and easy to use. You can trade using two different modes: Swap mode and cSwap mode.

In the Swap mode, users can exchange their own tokens for other tokens based on the best available price at the time.

In the cSwap mode, Coral Finance specially designed the trading experience for cToken. When participants sell cTokens on Coral Finance, a transaction tax of 3% of the transaction amount will be charged.

3. Coral Box

Coral Box is an innovative mystery box on Coral Finance that can be used for different purposes. Unlike traditional blind boxes that only support NFT as rewards, Coral Box supports tokens and NFTs with different scarcity and specific rights.

1) Promotion and marketing

Projects can set up custom Coral Boxes to reward their users, providing an effective way to accumulate users and increase conversion rates. It can also improve user retention and activation.

2) INO (Initial NFT Issuance)

Projects can list and sell Coral Box without any listing fees or sales tax, which helps save costs and ensures a fair distribution of their tokens to their community.

4. Airdrop

Coral Finance also plans to launch an airdrop verification space for launching different airdrop campaigns on Coral Finance.

Token Economics

1. Native Tokens

$CORL is Coral Finance's primary native utility token. It is expected that $CORL will provide several functions to the protocol.

2. Destruction mechanism

Coral Finance aims to make CORL a deflationary token, which will control inflation by implementing several mechanisms to burn CORL.

3. Token distribution

The total supply of 500,000,000 $CORL is distributed as follows:

Epilogue

Coral Finance is a rising star in the derivatives trading market, providing Web3 users with an advanced trading experience by leveraging the power of Nautilus Chain.

The platform focuses on asset appreciation, asset circulation and risk hedging, offering a range of products including derivatives trading, pledge and farm, lending, etc. In addition, Coral Finance is also committed to continuous product development and will launch more features in the future.

Overall, Coral Finance is a platform to watch, with the potential to have a significant impact on the derivatives trading market in 2023 and beyond.