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Introducing Strike protocol in one sentence can suffice; Strike is made to be more scalable and decentralized than the compound protocol. In Strike, you can lend and make a profit, or get a loan on bail. It is also easier to add new markets to this platform. Distributing tokens without initial public offering and raising capital has also helped make the platform more decentralized. In this article from CoinMarketSIG , we will talk about what the Strike protocol is, what its purpose is, how it works, and what services it provides. In the following, STRK token, its purchase and maintenance methods, as well as the roadmap, partners and team of this project are reviewed.

What is the Strike protocol and its purpose?

The Strike Protocol is a decentralized money market in Ethereum Blockchain that enables users to lend or borrow digital assets. This protocol is non-custodial, which means that the control of assets is always the responsibility of the users. The Strike protocol is autonomous and algorithmic, and governance bids and Yield Curves determine its parameters.

The strike is forked by the Compound protocol. This protocol seeks to build the ability to support more collateral and lower the threshold for a new collateral. With the current architecture and parameters of the Compound Protocol, 100,000 COMP tokens are required to create a Proposal to add a new asset, and the proposal must receive at least a positive 500,000 COMP.

Compound provided a mechanism by which users could obtain the number of tokens needed to bid, but it was still difficult to obtain that amount and a positive vote of 500,000 COMP. It is true that this creates more security and prevents the addition of unqualified assets, but it also prevents the protocol from scalability.

Striking makes scalability easier and adding new assets without compromising security. In Strike, a number of governors who are members of the community are elected by community vote. Their job is to create a white list of assets that can be added to the platform, and then these assets need the vote of community members to approve.

Another problem with the compound is the over-control of venture capitalists and start-ups, and as a result, the current distribution of COMP tokens is very disproportionate. There are plans to distribute more than 4 million COMP tokens over the next four years among platform users, and by the end of this time, it is expected that the platform will be decentralized enough, but institutions will still have a lot of control over the tokens.

In the Strike protocol (STRK), the government is completely decentralized and more than 45% of the total tokens supply of this platform is distributed at the time of launch. The remaining tokens will be distributed during the cash extraction rewards program over a proposed 8-year period. With this tokonomix, the protocol will be completely decentralized and the tokens will be used from day one. It can be said that Strike aims to become a completely decentralized and scalable money market based on the Ethereum blockchain.

How does Strike (STRK) work?

In the Strike protocol (STRK), there are generally two categories of users and several important elements. Users include:

Suppliers: Those who pledge an asset in the Strike Protocol to make a profit. When a digital asset is successfully released and validated in blockchain, sToken is created accordingly.

Borrowers: Those who intend to borrow from Strike and must first pledge their assets to secure the repayment of their loan. The user must also pay the registration fee for the Ethereum blockchain.

The following is a description of the elements and coefficients used in the strike, which will help you understand how the protocol works:

sToken

In addition to the STRK sovereign token, there are other native tokens in the sToken format in Strike. These tokens are attached to a digital asset (Peg) and can be moved between different Ethereum wallets. For example, if you bail out the USDC Strike Protocol, you will receive the equivalent of sUSDC. The main use of sToken is to display a value commensurate with the underlying asset in the protocol and redeem it at any time.

For sToken we have two processes of creation (Mint) and burning (Burn) which are done automatically by smart contracts. The mint process represents the delivery of a token to the protocol, and the burning process is performed to release the pledged asset and destroy the sToken.

Collateral Factor

Several factors determine how much you can borrow. The protocol first determines the present value of the pledged asset. The market for each asset has a parameter called the Collateral Factor, which indicates how much you can borrow against the pledged asset. The amount of this factor is present in the initial smart contract and can then be changed by members of the community. The protocol will automatically liquidate the asset if the value of the user’s assets is less than the amount allowed to borrow.

Reserve Factor

To ensure the security and maintenance of the protocol, there is another parameter called Reserve Factor in each market strike. This factor represents the percentage that is taken from users and assigned to the protocol. How to control and use the collected funds is specified in the protocol governance process.

Governance

Smart contracts for network governance fully enforce compound rules, and the advantage of using a Governor has been added. 21 addresses that have the highest number of STRK tokens, personally or with the help of other people (Delegate them), will be selected as governors. Governors are elected in 28-day time periods.

To add a new digital asset to the Strike protocol, ‌ these 21 addresses are first voted on to be whitelisted. All STRK token holders can then vote to add or delete that digital asset.

Each STRK token is equivalent to one vote. A bid must have at least 65,000 tokens, and at least 130,000 votes are required to approve it. In addition, the majority must vote within the time limit, which is approximately 72 hours, depending on the speed of the Ethereum blockchain.

Users can bid on almost any parameter in the Strike protocol, such as what assets to add, which assets to delete, change of collateral ratios, and the booking and oracle used. Each offer must wait approximately 48 hours after approval and before implementation. If at any time during the proposal, the bidder has less than 65,000 tokens, any user can cancel it.

Yield Curve

For the independent operation of the Strike protocol, there is a yield curve mechanism for determining the Borrow and Supply profit, which is controlled by code and by the governance processes of the Strike protocol. This curve creates a balance in each of the markets and follows the traditional economic model of supply and demand.

When demand for a particular market, or loan application, is low, the borrowing rate should be lower and more profitable, and the supply interest should be lower. When demand for loans increases and market demand increases relative to existing supply, interest rates on both the Borrow and Supply sides increase.

What services does Strike provide?

Now that we know what the Strike protocol is and how it works, by entering the Strike site and clicking on the Launch App, after confirming and connecting the wallet, we enter the platform environment. There are four main parts, each of which is described below.

Dashboard: On this page, you can see your general status on the left. For example, how much you have stewed or how much you have borrowed. On the right, in the Supply Market section, you will see cryptocurrencies where you can pledge your assets. The annual profit you will receive is also known. In the Borrow Market section, the codes that you can borrow and their annual interest are specified. You can also repay your loan from this section.

Vote: This section is used to vote on the suggestions that are submitted. You will see the offers on the right and by clicking on each one; its details will be specified. If you have a suggestion, you can submit it by clicking Create Proposal. By clicking on Get Started, you can either vote for yourself or transfer your voting power to another address.

Rewards: The distribution of rewards can be seen on this page. There is STRK balance and bonus in this section and you can also withdraw your bonus.

Market: In this section, the status of the platform can be seen both in general and separately for different ciphers; how much has been deposited and how much has been borrowed.

Introduction to STRK tokens

STRK is a functional token protocol token created on the Ethereum platform with the ERC-20 standard. This token is distributed only to users and holders and has no initial offer or dedicated amount to team members. The total STRK offering will be with the remaining tokens being distributed to users through a cash extraction incentive program. This token in the Strike protocol has applications such as the following:

• Provide suggestions for the network
• Vote on different proposals
• Participate in the protocol liquidity extraction program

The way tokens are distributed by the community may change in the future, but from the beginning, it has been as follows:

• Release 3 million tokens at protocol launch
• Distribution of 3,540,888 tokens in the form of Liquidity Mining over 8 years

To calculate the amount of the token that is paid as a reward, first the ratio of the volume of the borrowing section of each market (Borrow Market) to the total amount of the borrowing protocol market is calculated. Tokens are then distributed to each market in the same proportion, with 50% of this amount reaching those who have provided liquidity in the Supply Market and 50% reaching those who have borrowed.

The team members and the Strike Protocol roadmap

No roadmap has been released for the Strike platform, and its founder and team members are unknown. The project is DAO based and the community makes all decisions, suggestions and voting. If one or more members of the strike team and their backgrounds were known, we could be more confident about the project; Of course, Certik has reviewed the code of this protocol (STRK).

What companies are Strike investors ?

There was no initial public offering or funding for the project, and all STRK tokens were distributed to members of the community. The purpose of this work was to prevent companies investing in the platform from gaining power and to help Strike become more decentralized. Examining the Strike Holders in Etrascan, the remarkable thing is that there are two addresses that hold about 19% and 17% of the total token stock, and it is not clear to which person or institution they belong.

In which exchanges can we buy and sell STRK tokens?

STRK cryptocurrencies can be purchased from centralized exchanges Cocaine, Bitrex, Appbit, Digifinx, Poloniex and OKX. Among these exchanges, since there are a number of Americans, cocaine is a better choice for Iranian users.

Which wallet is suitable for STRK storage?

Since STRK is an ERC-20 token, all wallets that support the Ethereum network, including Trustwalt, Metamsk, and the ledger hardware wallet, are suitable for holding these cryptocurrencies. The following article is a complete explanation of Ethereum wallets that reading this will help you in this regard.

In Conclusion

Strike is a decentralized cash marketplace where, like the Comp platform, digital assets can be lent and borrowed. Strike (STRK) has two major differences from compound; The first is that while maintaining security, it is easier and cheaper to add a digital asset to it, and the second is that its token distribution is perfectly suited for decentralized governance. In this article we talked about what the Strike protocol is, what its purpose is, how it works and what services it has. The STRK token, its purchase and maintenance methods, as well as the roadmap, partners and team of this project were reviewed.