THE CYBORGSWAP BANK
The CyborgSwap bank is finally open as of Monday 4/11/22 with the first 3 CBO Safes to earn CRO, BTC and USDC. However, this is only the beginning of all that the CyborgSwap Bank will have to offer over time. There are a lot of big features we have planned, but building takes time so they will be released in stages as they are built! In this article, we will explain everything we wish to build for the CS Bank and give overall explanations of how each feature works.
THE CBO SAFES:
The first feature that we released yesterday is the CBO safes. It works quite simply by depositing your CBO or CBO LP tokens in one of the available Safes to earn rewards. Like a savings account, you earn interest on your deposit in the form of a non-native token like CRO or BTC. You can deposit or withdraw anytime you wish without lockup periods. The tokens earned in the Safes will only be major tokens of the Cronos ecosystem. CS Bank is funded by our own treasury, rather than partnership agreements, which will allow it to be far more sustainable. New CBO Safes will soon be opened and, in the near future, a non-CBO Safe will also be available for deposits and earning in major crypto tokens. The first will be a LUNA Safe to earn CRO and will go live alongside our Luna Cyborgs NFT collection (minting toward the end of April).
THE CBO LOCKED SAFES:
The second feature of our bank will be the CBO Locked Safe. It’s the same mechanism as the CBO Safes except this time your deposits are locked for a period of 1, 3, or 6 months. You might ask why someone would want to lock their deposit when the normal non-locking Safes are available. First, our Locked Safes have fixed APY larger than the regular safes. Secondly, your entire earnings yield is paid when you deposit the CBO into the Locked Safe. You can then use your earnings however you like. Do note that in order to access these Locked Safes, you will need to provide Power Tokens. The Power Token of the CyborgSwap Power Plant is scheduled for release at the end of April and will be explained in further detail in an article next week! The Locked Safes were originally planned for release on our roadmap in Q3; however, we’re ahead of schedule and will deliver this feature in Q2, possibly even in May!
THE CBO BACKED LOANS:
The next major upcoming feature of the CS BANK will be our CBO backed loans. Once again it’s pretty simple banking. This time you won’t lend your CBO to the bank to earn tokens but you will borrow CRO from the bank, using your CBO as collateral. If you want to borrow CRO from the CS bank, you’ll need to provide an amount of CBO as a collateral (the amount of the collateral will be based on the price of the CRO and the price of the CBO at the time you want to make the loan). This process is a very useful feature for those who wish to hold a token like CBO, but have some of their liquidity for other ventures. The process works by depositing a certain amount of CBO and borrowing against it in a LTV or Loan-To-Value ratio. For instance, someone may choose to deposit 1000 CBO as collateral, which typically earns a small yield APY, and then borrow against it at a LTV ratio of 40%. For the sake of easy math, let’s assume both CRO and CBO are $0.40. 1000 CBO @ $0.40 = $400. Borrowing at a 40% LTV would give $160 as 400 CRO tokens. There will be an interest fee charged for the loan due once the loan is paid back. This is a very powerful feature however, it can be quite risky in volatile markets and at higher LTV borrowing amounts. In the event that your collateral value drops below the loan amount you have borrowed, your collateral will be liquidated to our treasury. It is very important as with any borrowing in finance to only borrow what you need. Keeping an eye on your collateral amount, borrowing at lower LTVs, and depositing higher amounts of collateral can all help prevent liquidation. We release further info on interest rates, LTV borrowing ratios, and more in the future.
THE NFT BACKED LOANS:
The NFT backed loans will work the same way as our CBO backed loans except this time, you can use your NFTs as collateral. This feature will be a huge gamechanger for not only our community or Cronos, but even the entire NFT space! Imagine no longer having to sell one of your favorite NFTs to participate in a different project mint! Or what if you have large amounts of liquidity in high value NFTs like our FMF1s but wish to purchase more of our collections or those of our partners. You will be able to with the NFT Backed Loans. Just like depositing CBO and utilizing LTV ratios to borrow against it, you can do the same with your NFT. This will be available for our collections first and then we will roll it out to several Whitelisted partners as well. The LTVs will be calculated off of floor prices. Thus, let’s say a collection has a floor price of 300 CRO. You could deposit 4 NFTs (rarity/exclusiveness/etc won’t be counted in this feature) at a floor of 300 CRO for a total of 1200 CRO in collateral. So for an example borrowing at 30% LTV would allow you 360 CRO without having to sell any of your NFTs! As with any loan you will be charged an interest fee due when the loan is paid back. You will also need to be wary of risk management to ensure your NFTs aren’t liquidated due to floor price drops, volatility, and high LTVs.
All these new features sound pretty exciting right? However there are still two main questions we need to answer:
How will this benefit our Dex?
How will these features be funded?
The first question can be answered simply. All of our Bank features have one thing in common, locking up maximum amounts of CBO (except NFT backed loans of course) and reducing the sell pressure on our token. After all, why sell CBO when you could hold it for future price speculation and utility and borrow against it to fund your other endeavors? However, since the rewards of these features are paid not in CBO, but major Cronos cryptos we need to address how things are funded. Of course, no need for worry as we have it all covered!
We have already started financing the CS Bank with 0.08% of the 0.25% fees from token swaps on our exchange. We will continue to fund the Bank with the swap fees, but additionally, from several other sustainable sources. Firstly, each safe of the bank will have a 5% deposit fee. This may seem like a lot, but it will definitely keep the bank strong for the long term and assist in CBO price action. The first 3 Safes that launched at 1% deposit fee will be increased 1% per day until the 5% fee is reached. This only impacts new depositors. The 0.1% withdrawal fees of the Auto CBO pool will also be used in funding the CyborgSwap Bank. This isn’t all either as our upcoming CyborgSwap Vaults (TBA) will also have a deposit/withdrawal fee system for the same purpose of funding its operation. Once Loans are live, the interest fee generated will also be added to the CS Bank treasury. Our final sustainable funding source will come from the CyborgSwap Auction House. From each Auction sale there will be a fee of 2.5% added to the Bank treasury.
On top of all these funding sources, we have two more in addition. However, we consider these less sustainable sources as they are linked to specific events, even if recurring, as they depend on other outside factors. These two sources rely on NFTs related to our NFT orientation. First, 60% of the fees we charge our partners to mint with us will be used to fund the bank. Secondly, on each of our upcoming/future NFT collections, a part of the mint revenue will be sent to the Bank treasury. Now we introduce our CyborgSwap Bankers NFT collection! This dedicated drop coming in May, will see 100% of the minting revenue used to fund the CS Bank as well as 75% of the mint royalties. Of course, the remaining 25% of royalties is reserved for our special FMF1 holders.
The final NFT related funding source for the CS Bank is more anecdotal but it ends the list on a high note. Auctions from the CyborgSwap NFT treasury. We have accumulated many high value NFTs in our treasury over time, not only ours, but also rare pieces from our partners’ collections. We will be holding our first auction this upcoming Sunday 4/17/22 8pm UTC with “The Black Rabbit” reveal. Auctions will take place using CBO. Many more will come in the days and weeks to follow. All the revenue generated from these auctions will be used to fund the CS Bank.
Last but not least, here is the breakdown of distributions of the CS Bank treasury allocations.
60% of CS Bank funds will be used as rewards in the Safes and also for the CBO and NFT Backed Loans
35% will be distributed to the CyborgSwap Bankers NFT holders
2% will be used for marketing the Bank
2% will be used for the development of new Bank features
1% will go to the CyborgSwap Team.
We have many amazing things in the works and we appreciate the support and patience of our community. Building these features takes time in conception, planning, building, finalizing, tweaking, and releasing. We are here for the long haul and we appreciate those who believe in our vision of an NFT oriented DEX and all that we want to accomplish. CyborgSwap Bank is only part of everything we are releasing this year and you can see we are even accomplishing things well ahead of schedule! Stay tuned Cyborgs. More is always on the way.