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What Is Cream Finance? Check The Goals And Future Of The CREAM Token

Although the name Cream Finance may confuse you at first, this project is no longer a food-themed defense protocol.

 In fact, the word “cream” in Cream Finance stands for “Crypto Rules Everything Around Me” – meaning “the cryptocurrency rules everything around me” – and is a digital currency project with attractive capabilities.

Space DeFi by offering a variety of innovative mechanisms Yield farming (yield farming), permanently excited to investors. At present, the annual return percentage of some of these protocols has exceeded 16,000 percent. Meanwhile, Cream Finance is trying to provide the best performance to its users by developing a defi platform.

To get acquainted with the Cream Finance platform and its dedicated token with the CREAM symbol, stay with us until the end of this article.

A brief history of Cream Finance

Cream Finance was first introduced on July 16, 2020 by Jeffrey Huang, the platform’s founder. Huang Mithril, the mastermind of the brain, is also an Ethereum-based social media platform. He is also the creator of Machi 17, a Taiwanese social media company that serves more than 42 million users.

While Cream Finance was originally set to launch on the Binance Smart Chain, the protocol was suddenly deployed on the Ethereum network on August 3, 2020, with a liquidity pool called YOLO Alpha. started.

The development of Cream Finance has been quite erratic and unpredictable. Since the project launched in August 2020, new updates have been sent to it almost every day. These updates show that the Cream Finance team carefully and skillfully monitors the defense space and selects the elements that have led to the success of other projects, including Compound Finance and Uniswap.

The developers of Cream Finance also launched the second version of their protocol on September 11, 2020 on the Binance smart grid.

Cream Finance

What is Cream Finance?

Cream Finance is a multi-purpose diff protocol built on the Ethereumblockchain. The project describes itself as “a compound finance-based lending platform and a Balancer Labs-based exchange platform.”

This is just one of the many features of Cream Finance; Since its launch in August, the project has introduced new capabilities to its protocol almost every two weeks. Currently, Cream Finance is seeking to transfer its protocol to a community-controlled decentralized autonomous organization (DAO).

Cream Finance intends to move the boundaries of defense by creating and integrating better protocols based on existing protocols. This protocol uses the source code of various projects such as Component Finance, Balancer, Cro Finance, Uni Swap and Blackholeswap.

None of these codes have been audited, and Jeffrey Huang has made a bold claim that these codes do not need to be audited by anyone other than the institutions that created them (for example, the Finance component should review the Cream Component code).

Cream Finance has been very transparent from the beginning with all the changes it has made to its protocol. Cream Finance’s core team consists of four people: Jeffrey Huang, the project’s founder, and three computer science developers, one of whom has worked at OmiseGo and Ethereum.

At the time of writing, approximately $ 334.8 million in assets are locked into this protocol.

Cream Finance
The total value of assets locked in the Cream Finance platform

How does Cream Finance work?

As mentioned, there are several features in Cream Finance, and a new feature is added almost once a week. Currently, these capabilities can be divided into the following categories: lending and borrowing, liquidity extraction, management and various automated marketing protocols (decentralized exchange (DEX) and the like). Most of these features work in the same way as the forked protocols.

Lending and borrowing in Cream Finance

The first feature in Cream Finance is decentralized loan service. This is what you see when you are in the Cream Finance Dashboard tab. This protocol is almost an exact copy of the finance component, with only minor changes in its details. As such, Cream Finance supports many cryptocurrencies for lending and borrowing.

Like Compound Finance, to get a loan at Cream Finance you have to deposit some digital currency (in US dollars), more than the amount of digital currency you want to borrow (in US dollars). This amount of deposited digital currency acts as collateral and because it is more than the amount of the loan, it is called overcollateralization .

Lending and borrowing on a peer-to-peer basis

Currently, on the Cream Finance platform, you can borrow up to 60% of the dollar value of a deposited digital currency. This number may change in the future; Because the collateral requirement in this protocol has changed twice since its launch. This figure is only slightly lower than the 66% limit that you can borrow on the Compound Finance platform.

It should be noted that borrowing in Cream Finance does not require any personal documents or credit checks, and there is no time limit for repaying the loan.

The only important point is that if the dollar value of your collateral decreases to such an extent that you have technically borrowed more than 60% of it, your collateral runs the risk of being liquidated (it is sold at a discount to other users of the platform).

To be able to borrow digital currency other than the cryptocurrency you have secured, Cream Finance encourages lenders to place their cryptocurrency assets in a pool of liquidity pools. The interest rate that lenders can set for deposited funds depends on the supply and demand of that asset. Lenders can also withdraw their funds from the pool at any time.

For example, the higher the demand for borrowing an asset, the higher its interest rate. This is a deterrent to borrowers from over-borrowing. Like Compound Finance, Cream Finance rewards lenders and borrowers with CREAM tokens when using this protocol to lend or borrow.

Extraction of liquidity in Cream Finance

If you go to the Reward or Pools tab in the Cream Finance program, you will see a collection of available pools. Here you can stick digital currencies to get an incredible return of almost 200% (for some pools). Unless otherwise stated, you can withdraw these funds at any time.

Like other protocols such as Cro Finance, Cream Finance rewards those who stick their tokens in these pools by reducing the number of transactions in their decentralized exchange, Swap. The purpose of extracting liquidity in most protocols is usually to ensure sufficient liquidity for users who exchange assets supported in the decentralized exchange (DEX) of that protocol.

Swap in Cream Finance

The Cream Finance Swap Decentralized Exchange, launched on September 4, 2020, has been described as “a fork balancer with a ion-like Frontend.” Simply put, Cream Finance Swap, like other decentralized exchanges such as Balancer and Uni Swap, is an automated market maker. Even more simply, it means that a swap is a protocol that uses the ratio of two assets in a pool to set a price instead of the order books used in centralized exchanges.

This way, users can arbitrate . That is, they benefit from the price difference of an asset in two or more markets.

Top decentralized exchanges in Difai

The main difference between Cream Finance Swap and other automated market makers is its lower commission. At Cream Finance Swap, the transaction fee is only 0.25%, while the standard fee in this industry is 0.3%. Of this figure, 0.2 percent goes to liquidity providers and the remaining 0.05 percent to Cream Finance.

Dao and management in Cream Finance

While the project had hinted since its launch that it was to be relocated to a Dao, it was officially announced on September 2, 2020 by Cream Finance. While Daim Cream Finance is still under development, it seems that many parts of other projects, such as Aragon, are needed to build it. In this dao, CREAM token holders will manage the community, although it is not yet clear what the voting will look like.

Automated marketer CreamY

CreamY is an automated market maker inspired by Cro Finance and provides high liquidity exchanges between cryptocurrencies of equal value. In other words, this marketer enables the exchange between StableCoin-StableCoin and the exchange between Rapid Bitcoin and Ethereumversions. An announcement issued on September 20, 2020, stated that the second version of the protocol, CreamY v2, would also support other cryptographic assets.

One CreamY dollar with Andre Coronge

A version of CreamY has not yet been launched, but it will probably work like Creo Finance. This means that it will have a modified bonding curve. Simply put, it means that the ratio of two assets in a given pool can change, without affecting the price.

Different link curves in automated marketers. Image of StableSwap white paper, the main white paper of Cro Finance

Like regular market makers, special marketers for stable coins reward liquidity suppliers by reducing transaction fees on their platform. Although this has not been confirmed, CreamY will likely be like Creo Finance and will also use these pools to provide liquidity to other protocols such as Compound Finance. This theoretically increases the returns for liquidity providers; Because it reduces both the transaction fee in CreamY and the profitability of lending in the compound.

Cream Digital Currency Token (CREAM)

The Cream Digital Currency Token (CREAM) is an ERC-20 token built on the Ethereum blockchain. This token is given as a reward to those who interact with Cream Finance through lending or borrowing, as well as providing liquidity in its various protocols.

cream finance

In addition, after the transfer of Cream Finance to Dao, CREAM token holders will be able to participate in the management of Cream Finance and all its protocols. Some consider CREAM to be the version with a fairer distribution of COMP tokens in Compound Finance.

Initial release of CREAM digital currency

No initial ICO offer for CREAM token. The maximum supply of CREAM tokens was 9 million units that were already extracted. 67.5% of these tokens were burned on September 20, 2020, after discussion in the community. Therefore, only 2,992,500 CREAM token units are currently available as the maximum supply.

CREAM token distribution table for liquidity providers

Of the remaining tokens, 61.5 percent went to liquidity providers, 23.1 percent to Cream Finance team and consultants, 7.7 percent to compound finance, and another 7.7 percent to seed investors.

CREAM tokens, 92.5% of which are controlled by the Cream Finance team, are stored in a multi-signature wallet. There are currently 12 key holders for this wallet, including Pantera Capital and Compound Finance, along with three developers from Cream Finance.

Distribution of dedicated tokens to the team and consultants of Cream Finance, early stage investors and compound Finance, started on September 24, 2020 and will continue on a monthly basis for one year.

CREAM digital currency price history

The price of the Cream digital currency at the time of its release in August 2020 was around $ 56. Immediately within a few days, the price of CREAM reached about $ 113 and a month later, on September 10, reached about $ 271, which indicates the good reception of this digital currency.

On the Cream digital currency price page, you can see the instantaneous price of the CREAM token and other related information.

After that, the CREAM token entered a bearish cycle and its price dropped to about $ 26. As of January this year, the price of Cream ranged from $ 26 to $ 61. At the same time as the digital currency market began to climb in January, CREAM also entered an uptrend and was able to record its highest historical price on February 5 at around $ 335.

Cream Digital Currency Price Chart (CREAM) from the beginning until now

From then until early 2021, the price of this digital currency has dropped to about $ 148.

In which exchanges is CREAM digital currency listed?

Most CREAM token transactions are processed by Binance, FTX and Sushiswap exchanges.

List of exchanges where CREAM tokens are listed

In addition, you can receive a CREAM token as a reward by lending and borrowing, as well as providing liquidity to the Cream Finance protocols.

CREAM digital currency wallet

After purchasing the CREAM token, you will need a safe place to store it. Because CREAM is an ERC-20 token, it can be stored in any wallet that supports Ethereum-based assets. The wallet you choose for CREAM tokens depends entirely on your needs and goals.

cream finance

If you want to keep your tokens for a long time, buy a hardware wallet like Ledger or Trezor. If you want to start managing Cream Finance, a mobile wallet based on a web browser like Metamask may be the best option for you. Finally, if you are looking for an easy-to-access wallet, we recommend the mobile version of Atomic Wallet.

Concluding remarks

In this article, we introduced the Cream Finance platform and its dedicated token with the CREAM symbol.

At the moment, Cream Finance does not seem to have a very clear roadmap. The development of this platform has been completely spontaneous and relatively unpredictable from the very beginning. What is clear is that Cream Finance simulates the best defy protocols available. Therefore, one can guess what will be built in the future.

Cream Finance seems to be completing its Daewoo before any other big change. Once this is done, the future of Cream Finance will be in the hands of its community.