Explaining why I was impressed by Tomb Finance the day after my coming-of-age ceremony
Hello, I'm Tomosuke.
I'd like to put my excitement into words faster than I can introduce myself, so if you're wondering "Who are you? If you're wondering who I am, please check out my Twitter profile.
Let's begin!
👉 Twitter is here
900% APR was attracted me
APR stands for Annual Percentage Rate.
This shows that it is 945.47%.
And the screen looks suspicious...
Yeah Suspicious. But let's start researching. That was the beginning of my research.
Why does paper with a cost of 20 yen have a value of 10,000 yen?
Let's talk about money.
Do you know the cost of a 10,000 yen bill?
You can see it in the image above, right? The answer is 20 yen.
So why do people in Japan believe that a 20 yen note is worth 500 times as much?
You may not be aware of it, but the answer is often given.
Because we trust our country.
For example, let's say that tomorrow, countless 10,000 yen bills are raining down from helicopters all over Japan. Would the 10,000 yen bills in your possession be worth what they are now?
This is an extreme example, but we trust that the value of the money we have now will not change significantly because of this situation.
In the past, the gold standard system was introduced.
Simply put, it is a system that determines the value of a currency based on a finite amount of gold.
However, the gold standard system has now been abolished.
There are many reasons why it was abolished, but at this point we can only conclude that this method was inefficient.
To summarize
Issuing money as collateral for the government's intangible credit.
A system based on the finite, tangible value of money is inefficient.
Let's talk about Fantom!
This brings us to the spotlight of crypto.
In 2008, Satoshi Nakamoto published a white paper on Bitcoin. Here's another quick summary.
The blockchain, a decentralized system, has created a mechanism that prevents tampering and double payments.
To summarize in the same way as before
Bitcoin is issued with the trust of the blockchain as collateral.
Five years after the release of the white paper, Vitalik Buterin, then 19 years old, announced a platform that allows users to create applications (dApps) on the blockchain. The cost of using that platform is Ethereum. (Bitcoin specializes in money transfer).
However, Ethereum in its current state has a number of problems.
The first of these is the rising cost of gas.
Gas prices refer to the fees charged for touching the apps I mentioned earlier, and these are getting higher.
A lot of people are trying to solve this problem, and Fantom is one of the solutions.
The reason for this is the low fees and overwhelming processing speed.
Please see here.
TPS (Transaction per second) of major blockchains
Bitcoin 7 TPS Finality 30-60 seconds
Ethereum 26 TPS Finality 25 seconds
Ripple 1,500 TPS Finality 40 seconds
BSC 300 TPS Finality 1 sec
Avalanche 4,500 TPS Finality 1 sec
Polygon 7,000 TPS Finality 30 sec.
Solana 50,000 TPS Finality 2.5 sec
Fantom 300,000 TPS Finality 1 second
You can see how fast Fantom is.
There are more, but I'll leave the rest to Ran NeuNer😇.
How does Tomb Finance work?
And as the title says, the main topic of this article is Tomb Finance.
This DeFi runs on Fantom.
There are many ways to use Tomb Finance, but in this article, we will focus on Tomb Finance's own tokens: $TOMB, $TSHARE, and $TBOND.
In this article, we will focus on Tomb Finance's proprietary tokens: $TOMB, $TSHARE, and $TBOND.
■$TOMB is an unsecured, algorithm-based (programmatically nice) token that is designed to make 1$FTM = 1$TOMB in the long run.
An example of demand and supply.
There is an island with 100 people
In 20XX, there was a bad harvest and the island only produced one apple. 🍎
But all 100 people love apples!
In that case the price of apples will increase
✅ Value increases due to low supply
After two years of producing only one apple...
An angel came down from the sky and gave us 100 million apples.
🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎🍎
100 people can't eat all of them.
In that case, the price of apples will go down.
✅ Value will decrease due to high supply.
■$TSHARE 👉 Token to increase the supply of $TOMB and lower the price.
✅ If (value of 1TOMB) > (value of 1FTM)
We need to reduce the value of $TOMB to get it closer to the price of $FTM
For this purpose, TSHARE tokens are staked, and in the case of the picture above, TOMB tokens are issued every 1Epoch (1Epoch = 6H) at an annual interest rate of 900%.
Let's say you have staked 1 million yen in TSHARE tokens.
900% of 1 million yen is 9 million yen (1 year)
9 million yen / 12 months = 750,000 yen (1 month)
750,000 yen / 30 days = 45,000 yen (1 day)
4.5 / 4 = 1.1 (1Epoch)
Therefore, if you stake 1 million yen worth of TSHARE at 900% APR, you will get 1.1 million yen worth of TOMB in 6H.
$TBOND 👉 A token to reduce the supply of $TOMB and increase the price.
✅ If (value of 1TOMB) < (value of 1FTM)
We need to increase the value of $TOMB to get it closer to the price of $FTM
The only token you can buy when (value of 1TOMB) < (value of 1FTM) is the $TBOND token! (Time Sale!!!)
The $TBOND token can be sold at a higher price than when you bought the $TBOND token when the $TOMB token exceeds the price of $FTM.
Therefore, when the price of $TOMB is below the price of $FTM, many people will buy $TBOND tokens with $TOMB tokens.
This will reduce the supply of TOMB tokens and thus increase the value of TOMB tokens.
Points that made me shiver on my own
At first, I was lured by the high interest rate and started to look into the mechanism.
I found out that Tomb Finance is a DeFi based on Tomb Token, which is unsecured and has an unlimited supply.
The current state issues an unlimited amount of yen with intangible credit (the state controls the supply).
The only reason this is still around is because it is efficient to run a national system, and to reflect that, on a semi-intelligent chain called Fantom.
They are issuing an infinite amount of $TOMB (Tomb Finance's algorithm manages the supply) with the trust of the blockchain system.
That's what made me shudder on my own.
To put it simply, the gap between what it looks like and what's inside made me swoon.
epilogue
In this explanation, I gave a simplified explanation of various information.
If any part is wrong
I was shaken to my core by this!
I'm shaking my heart about this!
I'd love to hear from you if you have any questions!
If you don't follow me on Twitter, I'll announce new articles and other updates.
If you don't follow me on Twitter, I'd appreciate it if you could at least follow me 😌.
👉 Twitter is here
References
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