Not long ago, Zebec Labs announced a US$1.5 million investment in Coral Finance, an on-chain derivatives protocol, to help the protocol complete its early launch and continue to provide incubation support for it. Coral Finance will be deployed on the Nautilus Chain mainnet in the near future. It is understood that Coral Finance is the first derivatives agreement on Nautilus Chain, and the agreement has an innovative premium trading mechanism, which is expected to provide reliable and long-term liquidity solutions for Nautilus Chain ecological projects, while improving users' capital utilization efficiency.
Similar to PoseiSwap, Coral Finance will also distribute the empty plan for Nautilus Chain ecological users after the Nautilus Chain mainnet is launched. Zepoch NFT holders and early interactive users are expected to receive its governance token $CORL empty incentives.
What is Coral Finance?
Coral Finance itself is an on-chain derivatives protocol, which will be mainly built on the Nautilus Chain. The biggest feature of this protocol is the "liquidity premium" mechanism, which can provide a steady stream of effective liquidity for the assets on the chain. The Premium Incentive Mechanism (PIM) based on this can also bring 2 to 5 times the premium benefits for users.
Coral Finance itself can provide liquidity for assets on different chains. Coral Finance's liquidity premium mechanism introduces cToken, which is a derivative token that holders can obtain by pledging the original Token 1:1 to the premium pool.
For example, in Coral Finance's CORL token liquidity pool (only CORL tokens are used as an example), users can use 1:1 to obtain cCORL tokens by pledging CORL tokens to the pool, and cCORL tokens are priced early It will be 2~5 times of the original Token, which means that cCORL will bring users a wide range of arbitrage space. Compared with the APY of most DeFi protocols currently below 10%, cToken can bring full benefits to users.
Of course, the cToken obtained by the user's pledge is locked, and the user needs to make a liquidity contribution in Coral Finance to obtain the release speed of the unlocked cToken (only the unlocked cToken can be traded). Users themselves can redeem the locked/unlocked cToken at any time, and the cToken will be destroyed after redemption.
Coral Finance provides multiple LP token options for a single premium pool, and traders can choose one or more of them according to their own circumstances. However, each LP token option corresponds to a different token release speed weight. Currently, Coral Finance supports LP token options:
Pass (formerly Token)-USDT
cToken (obtained based on the pledge of the original Token) - USDT
CORL - USDT (after the CORL token is listed)
Coral Finance's Catalyzer is an unlocking tool written in a smart contract. Users need to pledge LP assets to Catalyzer to obtain cToken unlocking speed.
Normally, the unlocking speed r of each block follows the following algorithm:
r= T x K/P/N
Where T is the USDT balance in a specific premium pool, K is a fixed value of 1%, P is the price of cToken, and N is the total number of blocks generated by the blockchain network every day.
Participants can check their LP ratio on Catalyzer, and it is not difficult to calculate the number of unfrozen cTokens obtained every day.
For example, if r equals 1,000 and your premium pool liquidity percentage is 10%, you can earn 100 cTokens from each block.
The number of cTokens unfrozen every day will be sent to the user's wallet according to the individual's liquidity in a single premium pool. Since the total amount of liquidity changes daily due to additions and removals, the number of individual cTokens earned also changes dynamically, and participants can remove their liquidity from the pool at any time.
Whenever there is a cToken output, it means that the liquidity in Coral Finance has increased. Therefore, in addition to the original Token as value support, cToken itself has further obtained the premium value given by the increased liquidity value of the ecology (this value, It can be considered as the value paid by the original project party to purchase the liquidity pool).
The cToken in any state can be exchanged for the original Token at any time. When the value of the cToken is higher than the original Token, arbitrage space will be obtained. When the value is lower than the original Token, it can be directly redeemed to reduce potential risks. In addition, when users obtain the unlocked cToken, they are more inclined to use the asset to provide liquidity to further increase the unlocking speed, which is rigid demand, which also greatly promotes the increase in the value of cToken assets.
In the future, Coral Finance will focus on asset appreciation, asset circulation, and risk hedging, and further provide products such as derivatives transactions, pledged stone mining, and loans to provide users with better transaction services.
Therefore, from the perspective of the Coral Finance model itself, it not only improves capital efficiency, but also increases user income, provides users with more opportunities to earn passive income, and at the same time ensures that they are not affected by risks such as impermanent losses. It is expected to promote a new transformation of the liquidity mechanism from AMM, and further reduce the risk of a liquidity death spiral caused by insufficient incentives for a single incentive token.
As an innovative derivative DEX, Coral Finance is of great significance to the development of the Nautilus Chain ecology.
What can Nautilus Chain bring to Coral Finance?
Nautilus Chain is currently the first Layer3 chain in the encryption industry, which was launched and incubated by the Zebec ecological community. Zebec Protocol, which is positioned as streaming payment and aims to reduce the global gap between rich and poor, has carried out in-depth exploration on Solana in the early stage and achieved quite dazzling results. In order to better serve the Web3 world and accelerate the integration of Web2 and Web3 worlds, Zebec Protocol is also gradually planning to develop from the protocol to the public chain. In addition to expanding and migrating to public chains such as BNB Chian and Near, the launch of Nautilus Chain is its An important step towards this goal.
In terms of characteristics, Nautilus Chain is the first parallelized and fastest running EVM Rollup L3 expansion solution. As the first modular chain, storage, computing, consensus, etc. are all in different modules, which means that it can obtain Higher scalability and expansion capabilities, and further improve network throughput, security, and privacy on the basis of Layer2. According to the "Triton" test network data, during the test period, the Nautilus Chain TPS data was above 2000. Nautilus uses Celestia's modular bottom layer, and uses ZK Rollup technology to increase privacy. When applications in the ecosystem want to achieve more functions, reduce operating costs or enhance security, and gain more sovereignty. As for developers, they can choose a solution that suits them more broadly in a package of modules, so as to choose to develop DAPP-Chain or DAPP-Rollup or DAPP-Subnet.
As a Layer3 with modular features, Nautilus Chain is quite different from the current Layer1 and Layer2. Layer1 is a single chain. Consensus, transactions, settlement, and transaction execution are all processed on a single chain. Although Layer1 has high security, it is often inefficient and expensive. Although Layer 2 can help Layer 1 to expand, it is usually only for a certain Layer 1. For example, all Layer 2s currently revolve around Ethereum.
Nautilus Chain is designed to address these deficiencies by allowing developers to "stack" different chains as layers, creating "stacks of chains" that will allow developers to create unique underlying layers that best suit their specific projects , which is highly customizable based on modularity.
Of course, Nautilus is different from other L3s (such as StarkWave, etc.), which uses Celestia to achieve consensus and data availability, and Eclipse to achieve transaction settlement.
As a parallel processing layer, Nautilus Chain can help build scalability for the execution layer in the EVM environment, and in the future, developers will be able to switch to Nautilus Chain seamlessly and with a low threshold.
The EVM-compabtility of Nautilus Chain is another aspect that distinguishes it from other Layer3s. By using the popular Web3 programming language Solidity, Nautilus provides builders with a high-throughput foundation to build the next generation of financial and payment DApps.
Therefore, Nautilus Chain focuses on providing payment infrastructure for the world, and it achieves this goal by providing builders with a scalable EVM environment that is flexible enough to create any financial dApp that is needed, and allows Web3 technology to serve the world Provides a neutral, decentralized and permissionless financial rail. In the future, Nautilus Chain will further shift from the initial Optimistic Rollup to Zk Rollup. ZK can truly bring customization to Nautilus Chain, bring better performance and lower cost, and serve as a stream payment (payment) as the main When positioning the ecology, security, transaction efficiency and cost are the most important considerations.
So most intuitively, Nautilus Chain can bring different underlying support to Coral Finance, including transaction efficiency, security, privacy, etc., which also makes Coral Finance take the lead in the startup stage and early operation stage, bringing users A better trading experience. With the development of Nautilus Chain, it is expected to bring a large amount of funds and user traffic to Coral Finance, and the development momentum provided by the technical advantages of Nautilus Chain will deeply empower Coral Finance.
In addition, Coral Finance itself has a more ambitious development goal, which coincides with the goal of Zebec's ecological incubation Nautilus Chain, and the two concepts are highly compatible.
Coral Finance will soon launch a live testnet on Nautilus Chain, providing users with an excellent opportunity to participate in interactive testing and earn rewards, which deserves the attention of all users.