Fractal, a well-established trading company, is committed to expanding into a world of decentralized financing with Tokemak, a project the team calls DeFis’ “decentralized liquidity reactor”.
On Tuesday, the company announced a $ 4 million investment round led by Framework Ventures, the well-known DeFi investment fund known for its games on Synthetix and Chainlink. Other large funds such as Electric Capital, Coinbase Ventures, North Island Ventures, Delphi Ventures and ConsenSys also joined the trip.
Funding comes in preparation for a Tokemak issue scheduled for the end of the second quarter of 2021, when the liquidity network will be rolled out to Ethereum’s main network.
In short, Tokemak provides a generalized liquidity pool for decentralized exchanges. Carson Cook, founder of Tokemak, explained to Cointelegraph that the project is “a network designed to create sustainable liquidity for the new and established DeFi protocols.”
For a liquidity provider, Tokemak acts as a one-way profit platform where they can deposit reserve assets such as Ether (ETH), USD Coin (USDC) and Dai, as well as tokens for projects that use Tokemak. The Tokemak platform will then direct liquidity to automated market maker groups and other opportunities for marketing. The key to this concept is TOKE owners who act as “liquidity managers” who express their liquidity preferences.
The most important challenge Tokemak seeks to solve is to increase cash for new projects. In most cases, they must allocate significant amounts of resources and effort to increase market liquidity for tokens, including incentives to grow crops. Tokemak allows them to distribute liquidity through one-way view – for example, directing some of the tokens to the token reactor set. Thereafter, Tokemak’s liquidity portfolio can be automatically directed to the market in exchange for their tokens, even if this depends on the wishes of the liquidity managers. TOKE holders may want to incentivize some collections over others because the token gives partial control over the Tokemak reserves.
As Cook explained, a class of Tokemak users could take the lead in maximizing profits:
Market makers can access Tokemak to increase trading capital and generate business profits. Market makers are likely to act in the following roles: price markers who set asset prices in professional markets such as order book markets, RFQ systems, etc., and liquidity managers who use TOKE to direct liquidity to markets where they can be most effective with trading capital. ”
Tokemak is also expected to be beneficial to “humble farmers,” Cooke said, given that TOKE will be distributed through cash withdrawals. Børs can also see the platform as a way to increase the market depth.
The protocol creates an innovative exchange liquidity pool, which is similar to Yearn.finance and other harvesting protocols that are constantly looking for the most profitable strategies for users’ assets. Given the importance of the TOKE, it is likely that the reasonable distribution of the token is the key to success.