Bybit Arbitrage is a trading tool that simplifies arbitrage trading by capitalizing on funding rate and price differences.

If you're seeking consistent returns with minimal risk, Bybit Arbitrage is the perfect ally.

 This robust tool empowers you to generate regular profits with minimal risks by capitalizing on price disparities across different markets. Its user-friendly interface lets you easily spot and exploit these differences, so that you can execute flawless arbitrage trading in the crypto market with confidence. Read on to learn how Bybit Arbitrage makes arbitrage trading an effortless way for you to achieve low-risk gains.

 is the buying and selling of the same or similar asset(s) at the same time across different markets to earn from slight price deviations. This act of purchasing an asset at a fixed price — while simultaneously selling it at a higher price — allows a trader to instantly make profits without any risks. 

While arbitrage trading has long been a staple in traditional financial markets, such as stock and forex, the advent of crypto trading has propelled arbitrage trading to new heights — thanks to the heightened volatility of the crypto market. Additionally, unlike traditional stock markets, crypto markets are traded 24/7, offering more opportunities for arbitrage traders to reap profits from the price gaps across exchanges and markets. 

 across exchanges or within a single exchange. Keep in mind that if you opt to arbitrage trade across different platforms, accessing your profits may prove to be complex, due to the need to transfer your assets between the exchanges, which can take up to several days to complete. On the other hand, arbitrage trading on a single platform is more straightforward — but more competitive as well.

There are multiple arbitrage trading strategies, but the most common ones in the crypto market include funding rates arbitrage, spot-futures arbitrage and futures arbitrage. 

Funding rates arbitrage allows traders to profit from variations in funding rates between 

 contracts. In contrast, spot-futures arbitrage enables traders to profit from price disparities between the spot and 

 for the same asset. Meanwhile, futures arbitrage involves profiting from price discrepancies between futures contracts with different expiration dates.

Bybit Arbitrage is a trading tool that helps traders identify arbitrage trading opportunities in two ways: funding rate and spread. 

The user-friendly interface organizes trading pairs based on either funding rates or spreads in different markets, so that traders can easily spot disparities in funding rate or price across the markets at a glance. 

Bybit Arbitrage is exclusively available to 

 mode. It facilitates arbitrage trading for USDT Perpetual, USDC Perpetual and USDC Futures contracts, thereby allowing you to enjoy arbitrage trading opportunities between USDT 

Spot pairs and USDT Perpetual pairs, or USDC Spot pairs and USDC Perpetual/Futures pairs. 

The Funding Rate Arbitrage feature exploits differences in funding rates between the Spot and Perpetual/Futures markets on the Bybit exchange. With the Funding Rate feature, traders can earn funding fees while simultaneously managing their positions in order to minimize potential losses and maximize gains through positive and negative arbitrage strategies.

Funding rates for the different trading pairs are listed in descending order. This helps traders to easily leverage the interest rate differential between Spot and Perpetual/Futures contracts.

The Funding Rate feature also allows you to 

 orders (with the same amount, but in different directions) in both Spot and Perpetual/Futures, which enables you to earn funding fees while mitigating potential losses (with potential gains).

holders in Futures/Perpetual contracts pay short position holders. You can leverage this situation by executing a positive arbitrage, which involves

 buying a Spot pair and taking a short position in 

Perpetual to earn steady funding fees. Alternatively, if the funding fee is negative, short position holders pay long position holders. In this case, you would perform a negative arbitrage by shorting a Spot pair and going long in a 

The Spread Arbitrage feature helps traders capitalize on price discrepancies between different markets for the same cryptocurrency asset. With this feature, you can easily compare the market prices of an asset traded across various trading pairs and contracts. While Spread Arbitrage may be similar to spot-futures arbitrage, it offers more arbitrage opportunities since it covers a broader range of markets, unlike spot-futures arbitrage, which targets specific markets

With Spread Arbitrage, the aim is to profit from the eventual price convergence as you buy the crypto asset at a lower price in one market (e.g., Spot) and sell it at a higher price in another market (e.g., Futures). 

As the futures price will eventually align with the Spot price when the contract expires, you’ll be able to take advantage of the simultaneous price disparity for the same asset.

In order to trade with Bybit Arbitrage, you’ll first need to 

. Currently, Bybit Arbitrage is exclusively accessible via the 

 for the web version, which will be launched soon!

Bybit Arbitrage offers multiple advantages.

Bybit Arbitrage is a powerful tool for traders seeking low-risk gains in the volatile crypto market. With its intuitive interface and exclusive features, traders can effectively leverage funding rate and price differences to maximize profits while minimizing risks. Bybit Arbitrage offers diverse benefits that make arbitrage trading more accessible and profitable than ever before.

Beginner

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How to Use Bybit Arbitrage to Achieve Funding Rate and Price Difference Arbitrage

An Ethereum Spot ETF is an exchange-traded fund that tracks the real-time price of Ether and allows investment through traditional stock markets. Learn more.

Earlier this year, the U.S. Securities and Exchange Commission (SEC) gave the green light to a number of Bitcoin Spot exchange-traded funds (

), sparking optimism that similar approval might be extended to Ethereum Spot ETFs. Adding to the excitement, news of Ethereum Spot ETF approval in Asia’s first region has heightened anticipation for a potential approval and launch in the U.S. However, despite the buzz, some industry observers remain skeptical. This article explores the potential impact of Ethereum Spot ETF approval on the broader crypto market.

An Ethereum Spot ETF is an exchange-traded fund that tracks the real-time price of 

 and allows investment through traditional stock markets. It offers investors a way to invest in Ether without having to actually buy or hold the asset itself.

An Ethereum Spot ETF operates by pooling investor funds to purchase Ether, which is held in reserves by the ETF.

Rather than navigating the complexities of 

 and exchanges, investors buy shares of the ETF through regular brokerage accounts, just as they would with traditional stocks. These shares represent a stake in the Ether held by the ETF, providing a simple and regulated way to own Ethereum indirectly.

In order to create ETF shares, authorized participants — usually financial institutions — purchase Ether in exchange for ETF shares of equal value, which are then sold onto the market. An authorized participant can also redeem shares by buying enough ETF shares and exchanging them for Spot Ether and taking those shares away from the market.

As a result, the price of ETF shares tends to fluctuate in line with Ethereum's Spot market price. If it didn’t, there would be an 

 opportunity to profit from any mispricings in the ETF price. However, it’s still theoretically possible for the ETF to trade at different prices simply because of supply-and-demand factors.

ETFs as securities are regulated by the SEC, so an Ethereum Spot ETF provides a regulated product that investors can purchase. By contrast, Spot Ether is being investigated by the SEC to determine whether it should be classified as a security, and currently lacks regulatory clarity. 

This setup offers numerous benefits for investors. It simplifies the investment process, allowing anyone with a brokerage account to invest in Ethereum without setting up a crypto exchange account or managing storage. This can save time and give some investors greater peace of mind. An ETF structure also provides the regulatory clarity that institutional investors need, which can enhance liquidity and trading volumes.

Security is paramount in the realm of cryptocurrency, and the ETF provider takes it seriously. To safeguard Ether holdings, ETF providers employ a combination of 

 and insured custodial services. As a result, they could potentially minimize the risk of theft or loss that individual crypto investors may encounter.

The Ethereum Spot ETF bridges traditional finance (TradFi) and the exciting (but still growing) cryptocurrency space. It offers the security and ease of trading associated with traditional financial markets while opening up investment opportunities in Ethereum for a broader audience.

Both excitement and regulatory scrutiny characterize the current landscape of Ethereum Spot ETFs. Major financial institutions like 

 and Fidelity have submitted applications for these ETFs to the SEC. Still, decisions have been delayed, with the next 

If applicants begin updating their filings by April, this may indicate they’re incorporating feedback from the regulator, which could be interpreted as a positive sign. However, a lack of updates to filings could indicate that the SEC isn’t maintaining the same level of discussions with issuers that led to its 

Another challenge is that the SEC is still investigating whether Ether should be classified as a security, especially since it transferred its consensus mechanism to 

. Earning rewards through staking could meet criteria that determine whether an asset is a security. Ethereum also provides a foundation for 

 (DeFi), which could add to the complexity of the review. 

Analysts' opinions vary regarding the likelihood of ETH ETF approval. One Bloomberg analyst, for instance, 

 chance of approval by May. However, the SEC's recent silence might hint at a less favorable outcome.

The approval of Ethereum Spot ETFs is eagerly awaited because it could mirror the impact of Bitcoin Spot ETF approval, which led to an influx of capital in the market. It would mark a pivotal milestone, likely to attract increased investment and further validate cryptocurrency. The crypto community is closely monitoring these developments, as the coming months will be crucial in shaping the future of Ethereum investment opportunities.

 was recently given to the first Spot Bitcoin and Ethereum ETFs in one of the Asian regions. This landmark decision positions the city as a trailblazer in the Asian financial landscape, embracing the integration of popular cryptocurrencies into mainstream investment avenues.

This milestone has sparked excitement within the crypto community, indicating a positive reception toward digital assets in that region. Analysts believe this move could set a precedent for other jurisdictions to follow, potentially leading to broader acceptance and recognition of cryptocurrencies as a legitimate asset class.

These newly approved ETFs are expected to attract a wave of fresh investors — both retail and institutional — by offering a regulated and familiar investment option for exposure to cryptocurrencies. This growth of interest could increase stability in the crypto markets, possibly influencing the price movements of Bitcoin and Ethereum in the region.

The timing of this approval is noteworthy, considering that the U.S. could also be on the cusp of approval of an Ethereum Spot ETF. If this proactive approach inspires other financial centers beyond the U.S. to consider similar approvals, it will palpably contribute to the global expansion and maturation of the cryptocurrency market.

Current Impact of Ethereum Spot ETF Applications on the Crypto Market

The buzz surrounding Ethereum Spot ETF applications is noticeably affecting the crypto market, particularly Ethereum's price and overall sentiment. Submission of new ETF applications to the SEC has coincided with an 

, pushing it to around $3,700. This uptick reflects the market's optimism and positive sentiment regarding the potential for easier access to Ethereum. However, the market has exhibited some volatility as well, with Ether dropping over 14% in a week in early April. 

Despite these fluctuations, there's a general expectation that ETF developments would significantly impact Ethereum's price dynamics, similar to what was observed with the recent Bitcoin Spot ETF approvals. Moreover, the recent approval of cryptocurrency ETFs has further fueled optimism and positive expectations for increased investment inflows and a broader recognition of cryptocurrencies.

To sum up, the current impact of Ethereum Spot ETF applications on the crypto market is marked by heightened anticipation along with some volatility. Ethereum's price is responding to changes in the regulatory landscape and the potential for broader adoption of cryptocurrency-based investment products.

What Will It Mean if an Ethereum Spot ETF Application Is Approved?

The approval of an Ethereum Spot ETF application by the SEC would mark a significant milestone for the cryptocurrency market, especially for Ethereum. Following are some of the potential benefits.

Drawing parallels to the earlier Bitcoin Spot ETF approvals, some pundits expect an initial surge in Ethereum's price following the expected announcement, reflecting renewed confidence and interest in Ether as an asset. Over the long term, Ethereum Spot ETFs could contribute to growth and stability, similar to the impact that Bitcoin Spot ETFs have had on BTC’s price.

However, there are key differences to consider. The SEC's cautious stance on Ethereum — notably because of its PoS consensus mechanism — could influence the approval process and subsequent market reactions. In addition, Ethereum's unique ecosystem, including its role in DeFi and 

, could lead to different market responses as compared to those following the Bitcoin Spot ETF approvals.

The potential approval of Ethereum Spot ETFs is a crucial turning point for the crypto market, promising easier access, increased investment and greater legitimacy. Although short-term price fluctuations may occur, the long-term effects could echo the positive growth recently witnessed with Bitcoin Spot ETFs, promoting a more mature investment environment for Ethereum.

Intermediate

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Ethereum Spot ETF Approval: Its Impact on Crypto Markets

Grayscale Investments has filed a registration statement on Form S-3 with the SEC to register shares of its Grayscale Ethereum Trust (ETHE) as part of efforts to uplist the trust to a spot Ethereum ETF on the NYSE Arca.

Daily Top Performer — Automata Network (ATA)

The SPX index is up 0.02%, investor focus on earnings and U.S. interest rates continues. The broader cryptocurrency market is down, with Bitcoin and Ether dropping by 3.78% and 2.41%, respectively in the past 24 hours.

Today’s outperformer is ATA, which jumped 8.9% after Automata launched Multi-Prover AVS on Eigenlayer Holesky Testnet to boost decentralized security.

Automata Network (ATA), founded in 2019, is a Web3 platform providing private web services for decentralized applications, focusing on secure, anonymous transactions and governance. Key features include a private voting system and MEV minimization to enhance user privacy and security. Automata's Multi-Prover AVS, which utilizes TEE Coprocessors to enhance security, is now available on the Eigenlayer Holesky testnet. This system employs the TEE Prover as a secondary security measure in decentralized systems. Operators, restakers, and developers are encouraged to learn more about this advancement on their website.

Check Out the Latest Prices, Charts, and Data of 

Grayscale Investments, the world's largest crypto asset manager, has filed a registration statement on Form S-3 with the SEC to register shares of its Grayscale Ethereum Trust (ETHE) as part of efforts to uplist the trust to a spot Ethereum ETF on the NYSE Arca. This filing follows NYSE Arca’s application and is a crucial step in the regulatory process required for offering shares continuously upon approval. The shares will not be sold until the registration is declared effective, and this offering is subject to the Securities Act of 1933. Grayscale emphasizes that the trust, not registered under the 1940 Act, involves high risk and volatility, is focused solely on Ethereum, and does not offer direct investment in Ethereum.

BlackRock's spot bitcoin ETF, IBIT, has significantly impacted the firm's overall ETF flows, comprising 24% of its total. Eric Balchunas, Bloomberg's Senior ETF Analyst, highlighted the fund's success during a panel on Hong Kong's newly approved spot crypto ETFs. Since its launch in January, IBIT has attracted consistent inflows for over 70 days, accumulating more than $18 billion in assets under management and becoming one of the most successful ETFs in history. The IBIT fund is second only to Grayscale's ETF in terms of assets but has seen remarkable trading volume along with other spot bitcoin ETFs, totaling nearly $230 billion.

Gamium, supported by Parachain Ventures, DAO Maker, and Mr. Beast among others, has its token $GMM listed on major exchanges with a fully diluted valuation of around $43M. The platform is promoting a beta points airdrop to reward early users, where participants can sign up and earn points through various activities like launching an MST, trading, daily logins, and referrals. Details on point earning and distribution are available in a dedicated blog post. However, potential users are cautioned to research due to the inherent risks associated with DeFi protocols and trading.

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Grayscale Files for SEC Registration to Convert Ethereum Trust into a Spot ETF on NYSE Arca

Sharky is a Solana-based lending and borrowing DeFi solution that utilizes NFTs as loan collateral.

Cryptocurrency lending and borrowing has always been a prominent niche of the decentralized finance (

) industry, championed by platforms like Aave (

). A much rarer variant of DeFi borrowing and lending is based on non-fungible tokens (

Sharky.fi, or simply Sharky, is a Solana-based lending and borrowing protocol that uses NFTs as collateral to facilitate the DeFi processes on the network. By putting up NFTs as collateral, users can borrow funds via short-term loans in Solana's native SOL tokens. For lenders, the platform is also a great way to earn high APY rates in just 7 to 14 days, while having their loaned funds protected by the NFTs.

Having established itself as the leader of NFT-based lending and borrowing on Solana, the Sharky project has ambitious plans to integrate two more highly popular crypto asset types — Ordinals and real-world assets (RWAs).

 (SHARK) is a lending and borrowing app on the 

 (SOL) blockchain that lets users provide NFTs as collateral to access short-term loans in SOL tokens.

 Lenders can view NFTs offered as collateral, and make loan offers secured by their preferred NFTs.

Although Sharky's public launch on the Solana mainnet dates back to April 2022, the platform operated without its 

, SHARK, for its first two years in the market. The SHARK token was eventually launched in mid-April 2024.

Using its innovative business concept, Sharky quickly established itself as the leader of NFT lending. According to the project’s team, Sharky has a 90% share of the NFT lending market on Solana and has issued more than 1.4 million NFT loans.

Following the recent launch of its SHARK token, the project aims to integrate additional crypto asset types in the future. These include 

 (RWAs). Another ambitious product type considered for future implementation on the platform is uncollateralized consumer loans.

As a lender on Sharky.fi, you can browse NFTs from a variety of collections offered on the platform and make a loan offer for potential borrowers. The collections available on Sharky include the platform's own 

 collection, Mad Labs, Solana Monkey Business (SMB), Tensorians, Namaste and more. Lenders’ offers are shown to potential borrowers on the platform, who then choose the best offer based on their borrowing needs.

The NFT provided by the borrower is used as collateral, and the lender makes their funds available in SOL tokens. Lenders earn interest on the funds, with the loan duration typically between 7 and 14 days. Interest rates, naturally, will vary depending upon on-platform activity. Usually, 

 for active loans range between 120% and 220%, though they can go up to 360%. As such, Sharky loans are an excellent way for lenders to earn some serious interest quickly. If a borrower fails to repay the loan in full, the NFT used as collateral is transferred to the lender.

For borrowers, the Sharky platform is an excellent opportunity to access SOL funds for short-term needs quickly and flexibly using their NFTs, rather than cryptocurrency, as collateral. The best part of the platform's borrowing mechanism is that you remain in possession of your NFT during the loan period as a borrower. While your NFT is used as collateral, its ownership isn't transferred to the lender while the loan is active. The ownership transfer may only happen at the end of the loan period if you fail to repay the loan in full.

Maintaining the ownership of your NFT allows you to keep using it on various DeFi and other apps for purposes such as staking or satisfying 

 eligibility requirements, among other potential uses.

Sharx is the platform's own NFT collection. One of the most popular collections used in Sharky's lending and borrowing operations, sharx is made up of 10,111 adorable shark characters. Purchasing a sharx NFT not only opens up borrowing opportunities but also entitles you to upgrade or boost your Chowder points, rewards that are used in Sharky's loyalty program. 

As a sharx holder, you're entitled to the airdrop of Sharky.fi’s governance token, SHARK, and you can also stake sharx to earn FISHY tokens.

The newly launched SHARK token is envisioned as the platform's governance asset, with a total supply of 100 million. As of the time of writing in late April 2024, only some specific details on the actual governance processes powered by SHARK are available. Thus, the token's actual use in on-platform governance is expected to be outlined in the future.

SHARK will be airdropped in two phases, with 4.25% set aside for the first phase and 3.5% for the second. Of the former, 70% is allocated to its community, with the remaining 30% is distributed to partner communities. Meanwhile, the second phase is held as a staking pool event with a lockup duration of 30 to 60 days exclusively for OG, new users and sharx holders.

 of Sharky. Unlike the brand-new SHARK token, FISHY was issued back in 2022 at the start of the platform's operations. FISHY can be earned by staking sharx NFTs, accumulating reward points and participating in Sharky's social media campaigns. The token can be used to boost sharx NFTs, which in turn can earn you additional Chowder points. FISHY also gives you access to NFT raffles and auctions held on Sharky.

The SHARK token can be bought on Bybit through a Spot pair with USDT (

). Additionally, you can also take part in Bybit's current campaigns for the token for the chance to grab a share of the 

, which includes a Token Splash event featuring 456,000 SHARK through Apr 30, 2024, 9AM UTC, and a Lucky Draw with 58,000 SHARK in rewards through Apr 30, 2024, 9:59AM UTC.

Lending and borrowing using NFTs as collateral is a novel concept that has earned Sharky leadership positions in this niche. As more platforms adopting this business model emerge, the competition in the field is likely to intensify. However, as of now, Sharky remains the absolute leader of the Solana-based NFT lending and borrowing market. 

As NFTs experience a resurgence in popularity following the post-2021 dip, DeFi solutions that make innovative use of these assets, such as Sharky, stand to benefit. Later in 2024 and beyond, we’ll likely hear more about NFTs being used as legitimate collateral in crypto finance — a new trend helped to no small degree by the Sharky platform.

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Sharky.fi (SHARK): The Decentralized Platform for Instant NFT Loans

Bybit Learn

Crypto

Tectonic is a money market protocol where users can borrow liquidity through a quick process and enjoy passive yield. Find out how it works in this article.

 institutions have been the primary source of loans in the past. They’ve also provided a small stream of 

 for those who store cash with them. Now, however, the crypto world has advanced to provide a modern alternative to 

 offers both passive income and quick loans to its users. With the platform’s innovative design and key features, it’s already become a popular option in the financial sector.

Tectonic is a money market protocol with a decentralized, noncustodial and algorithmic platform. With the Tectonic protocol, users can borrow liquidity through a quick process and enjoy passive yield.

Tectonic operates on a cross-chain money market that provides users with a modern way to earn passive yield and borrow liquidity instantly. When users deposit their crypto assets with the platform, they can benefit from a solid return. In addition, token holders can 

 their tokens to earn rewards. The yield is based on market conditions, and can be accessed immediately. 

Tectonic users can also borrow liquidity to obtain an instant loan. The protocol has advanced security mechanisms and an open-source design to distinguish itself from other similar platforms. For users’ benefit, Tectonic smart contracts are independently audited through respected third parties.

, the co-founder and former chief technology officer of 

, which launched Tectonic in December 2021. Particle B is a blockchain-based incubator, or accelerator, that supports high-value projects in the crypto market. Tectonic runs on the Cronos platform. Because of this, Tectonic’s native token, TONIC, is often referred to as a TONIC 

. In reality, however, it was developed as a 

Tectonic’s developers focused on creating a platform that places governance in the hands of stakeholders and the community of TONIC token holders. The development team consulted with the community and stakeholders to establish all aspects of the Tectonic protocol. This includes the interest rate structure, token distribution, collateralization ratio and other relevant aspects of the platform’s design and functionality.

The Tectonic protocol’s design and architecture are based on 

, an established protocol that has been thoroughly audited and tested. Tectonic protocol aims to meet a variety of its users’ needs through its advanced protocol, such as providing them instant loans and guaranteeing them a steady stream of passive income. 

Tectonic token holders benefit from contributing to the liquidity pool through a robust incentive program that includes interest and rewards. TONIC traders can borrow liquidity for shorting and farming, and TONIC holders can access several other cryptocurrencies through the platform without needing to liquidate their TONIC holdings. The other cryptocurrencies may be used for bonding, participating in initial coin offerings and more.

On a more detailed level, smart contracts control the Tectonic liquidity pool, which is the accumulation of users’ contributions. Because these crypto assets are controlled via smart contracts, they are 

 assets. These smart contracts then support prompt withdrawals. The assets in the Tectonic liquidity pool can also be used as collateral for borrowing in several different cryptocurrencies.

Tectonic has several built-in mechanisms and features to benefit its users. For example, it maintains a 10% liquidity cushion, and it’s currently developing an insurance fund. The fund will protect the pool against losses from borrowed crypto assets that aren't returned to the pool. In addition, the platform maintains an adjusting 

 that’s based on market conditions. This supports a solid return for TONIC holders.

While other cross-chain money market platforms are in use today, Tectonic stands far apart from the others. Not only has it been expertly designed with a variety of features that support borrowing and passive income generation, but its developers continue to make improvements to the platform. Its community and stakeholders are required to authorize the improvements to ensure that users will benefit from them. Let’s look at the features of Tectonic that support its functionality and uniqueness.

As mentioned, one of the ways for TONIC holders to profit from their tokens in the near future is 

. Although it’s still in development, this feature will enable holders to earn passive yield rewards simply by depositing their crypto assets in the TONIC staking module. The rewards are generated through the transaction fees that the platform’s borrowers pay. 

Staking will also support the TONIC insurance fund and be used for the platform’s governance actions. Once staking is available, users will be able to access it through the navigation menu on the website. The easy process requires users to input the TONIC token amount they wish to stake and submit their order. The unstaking process is equally easy, but a 10-day cool-down period prevents those assets from being immediately available to users.

 on the Tectonic platform support another avenue for passive yield generation. Token holders can choose from a range of fixed time periods to support long-term growth, ranging from six to 48 months. The yield increases substantially for longer hold times in the Maturity Lock Vault. The rewards provided to these holders will be paid in TONIC tokens and will come from community incentives. To contribute to a Maturity Lock Vault, token holders are required to stake at least 100 tokens. Once this is accomplished, the Maturity Lock Vault feature is enabled.

TONIC holders can contribute to the liquidity pool, which allows users to borrow from the pool. Smart contracts manage the supply of tokens. This aspect of the platform’s design makes the pool a fungible resource. Users who 

 in return. This enables them to later retrieve their original tokens from the pool. The tToken value is determined by the interest rate for deposits. This interest rate is based on the economic principle of supply and demand.

 in the form of several available cryptocurrencies. Those supported (other than TONIC) include 

. This permits users to borrow liquidity without having to sell their TONIC token holdings. Tectonic maintains a collateral factor, which is a ratio of the funds available for borrowing to the user’s assets. In the event that the collateralized assets’ value declines, some assets will be liquidated and a liquidation discount will apply. This 

 can be avoided if the user increases their collateral or repays some of their outstanding loan balance. Borrowed funds will be subject to a compounded interest rate.

Currently being developed, the Tectonic Insurance Fund is expected to be released in the near future. The fund’s balance builds up through the compounded interest rate for which all borrowers are responsible. Of the interest collected, 10% will be allocated to the insurance fund. The purpose of the insurance fund is to create a financial buffer that protects the pool from loss related to non-liquidated loans.

When the collateral factor isn’t met on an established loan, such as through a decrease in collateral value or an increase in the amount borrowed, the liquidation mechanism is triggered. The purpose of liquidation is to maintain the solvency of the Tectonic protocol. The Tectonic interface has a 

 on the user dashboard. Once the Lava Bar reaches full capacity, liquidation may occur. As the bar reaches the full point, users can repay a portion of their outstanding loan or increase their collateral to prevent liquidation.

 is the Tectonic protocol’s risk management layer. It maintains the collateral factor, which establishes a user’s minimum collateral required, and triggers the liquidation mechanism. When a user submits a transaction request, approval or denial is processed through the TectonicCore. On a deeper level, the TectonicCore weighs risks against user balances to determine a risk score.

Although Tectonic launched in December 2021, the platform’s development has continued. A key part of the after-launch development occurred in February 2022, when news about the 

 was released. Staked tokens qualify users for passive yield that’s funded through borrowers’ loan fees. Early users who were part of the wallet snapshot in January 2022 could receive a token airdrop, which could be staked as desired. An allocation of 0.1% of the total token supply was for the airdrop.

Looking ahead, Tectonic will be bolstering its community governance process. For example, facets of the collateral factor are expected to be governed by the community in the near future. This and other aspects of governance depend upon the continued growth of the platform. As mentioned earlier, Tectonic is also working to establish an insurance fund. An allocation of 10% of loan interest charges will be stored in the insurance fund. If a loan cannot be liquidated, the insurance fund will replenish the liquidity pool for those funds. This will support the financial health of the platform going forward.

The Tectonic platform is a decentralized finance (DeFi) system fueled by Cronos. Its native token is TONIC. Tectonic launched with a supply of 500 trillion TONIC tokens. The Tectonic team received an allocation of 23% of the tokens. The ecosystem reserve benefited from 13% of the tokens. Another 13% supports network maintenance and security. And, as already mentioned, 0.1% of the tokens were used in the airdrop. The remaining 50.9% is available for community rewards and incentives.

Through the use of tokens, lending and borrowing activities are supported. Those who supply tokens receive passive income for their contributions, while liquidity borrowers can use their crypto assets for shorting, ICOs, yield farming and staking.

The current price for a TONIC token is approximately $0.00000015. When the token launched in December 2021, its price was $0.0000004027. Its peak price was $0.000001903. As is the case with all crypto tokens, the value fluctuates considerably and is subject to change due to a variety of factors, such as supply and demand, and whale activity. 

 predicts the TONIC token price will be $0.00000013 by year-end, also forecasting potential prices of $0.0000004 by 2025, $0.00000083 in 2027 and $0.000000365 in 2031.

Security is a top concern for many cryptocurrency users and investors. The Compound protocol is rightfully recognized as being among the most secure in use today, having been audited and tested comprehensively. The Tectonic protocol is rooted in the Compound protocol, so it has extensive security measures in place. In addition, the blockchain ecosystem security reviewer 

 has also audited Tectonic to confirm the adequacy of its security measures.

Even with these security measures in place, however, it’s important to note that the Tectonic protocol has only been in use since December 2021. Both the platform and the token continue to be actively developed. Furthermore, despite being used for both passive income generation and borrowing, the utility of the platform hasn’t been fully proven, and continues to evolve as the team furthers its development. While Tectonic is a legitimate platform, users should proceed cautiously until the platform is firmly established.

The current TONIC token price is notably low, so investing in a large number of tokens requires only a nominal investment. While the price is expected to increase in the next few years, it’s subject to extreme volatility. Nonetheless, because of the low cost of entry, the risk to investors is relatively small.

Tectonic offers financial benefits for TONIC holders. For example, staking rewards can yield passive income, and additional returns are offered through locking tokens in vaults. While borrowers will be responsible for interest charges on borrowed funds, they can also benefit from their loans. For example, without cashing in their TONIC tokens, they can borrow against them for potentially profitable farming, staking and more.

Tectonic has built-in mechanisms and features to ensure the integrity of its liquidity pool. This supports the investment of those who stake tokens and contribute to the pool. The protective measures include the pending release of an insurance fund and a liquidity mechanism.

Overall, an investment in the TONIC token may prove to be financially lucrative. However, with numerous factors that could influence token value, there are risks to consider. Furthermore, even with the Tectonic Insurance Fund and liquidity mechanism, there could be a potential for loss in the liquidity pool. This risk stems from the newness of the platform. Given these factors, TONIC token users should make investment decisions with an ounce of caution.

Tectonic Crypto is a well-designed platform in the crypto market, and its design and functionality have continued evolving since its development. One of the planned updates for Tectonic is the creation of an insurance fund that will be sourced from the interest that borrowers pay. Specifically, 10% of that interest will be collected, and will serve as financial protection in the event that some of the loans aren’t liquidated properly.

In addition, developers are currently working on creating and launching a staking mechanism designed for TONIC token holders to earn rewards. This aspect of the platform’s design encourages users to maintain their holdings, which in turn supports a larger liquidity pool. These are only some of the many planned developments for Tectonic.

The collateral factor for borrowing liquidity from the Tectonic pool will also be updated in the near future. Specifically, the parameters and ratios for the collateral factor are currently managed by the platform’s team. In the future, they’ll be regulated via community governance processes. Tectonic’s developers continue to consult with their stakeholders and community to identify new opportunities for growth and improvement.

While Tectonic is a relatively new crypto platform, it has been well-designed with security and utility in mind. It offers users passive income and the ability to borrow crypto assets instantly. With its many current features and planned developments, it’s a platform with tremendous current and future potential as well as some risk.

Tectonic Crypto: Earn Passive Income & Access Instant Loans

Grab Up to 5,000 USDT in Rewards

Grab Up to 5,000 USDT in Rewards