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Project Insight: Crystl Finance - Transparent Passive Income on Cronos & BNB Chain

With the latest expansion to the BNB Chain, Crystl Finance is positioning itself as a multi-chain vaulting platform that enables access to a passive income for DeFi users.

Introducing Crystl Finance

Crystl Finance is a premier vaulting platform that brings maximized passive income to the masses through secure, transparent, and decentralized solutions on multiple blockchains. It offers users unprecedented flexibility for passive income through its unique V3 Vaults, Ultra Farms & Revenue Sharing.

The platform was initially launched on the Polygon blockchain, and it has now rebranded itself in order to pursue its cross-chain ambitions and therefore launched on Cronos as well. Crystl Finance aims to position itself as a secure, easy-to-use, exploratory tool for Decentralized Finance (DeFi) through networking and developing relationships with the leading projects on Cronos and Polygon. 

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It also aims to become the go-to platform for DeFi users for passive income generation while providing users exposure to a multitude of projects on multiple blockchains. CRYSTL is the protocol’s native utility token. It allows holders to earn revenue in MATIC (Polygon) or CRO (Cronos) tokens from the Mining Guild. Earlier, the token could also generate rewards through the protocol’s yield farming and liquidity pools. However, Crystl Finance has now shifted its focus to vaults. 

Value Proposition

Crystl Finance aims to offer value to users and partnering projects through the following unique value propositions:

  • Easy to Use, Learn, and Earn: As DeFi can be incredibly confusing and thereby prohibitive to novice users, CrystL Finance aims to simplify DeFi for the masses through automated vaults.
  • Maximized Passive Income Through CRYSTL Token: The native protocol token is intuitively designed to integrate passive income-generation mechanisms. 
  • Innovation: The protocol offers users the ability to earn interest on interest through heavily innovating the standard vault mechanism.   
  • 24-Hour Customer Support: Crystl users have access to uninterrupted customer support on the website, in addition to support offered through the protocol’s social media channels such as Discord and Telegram.
  • Limited Supply Token: This assures that the CRYSTL token does not suffer from hyperinflation, which will ensure a stable appreciating price. 
  • Security: All smart contracts of the protocol are audited by CryptEx. 
  • Governance: The protocol has a governance mechanism in which CRYSTL token holders have the ability to vote on important decisions surrounding the protocol.
  • Business Development: In order to drive sustainable growth and innovation, Crystl Finance is continuously forming partnerships with prominent plays in the DeFi space. Some of these partnerships include ApeSwap, Dogira, Polydoge, Relaychain, Crodex, CronaSwap, etc. 

Vaults

In the DeFi space, there is an abundance of projects that promise rewards to users for interacting with their platforms. Staking tokens in liquidity pools is one such example through which protocols reward users for providing the liquidity required for them to remain functional and solvent. This mechanism is referred to as yield farming. However, yield farming for an individual with limited funds can seem prohibitive due to high transaction costs for claiming rewards. To solve this problem, protocols use vaults.

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Vaults are auto-compounding instruments that earn reward tokens on third-party farms. These rewards are automatically reinvested in liquidity pools to earn compound interest. Vaults offer unparalleled convenience and capital efficiency with minimal transaction costs. As vaults are automated and auto compounding, they allow users to deposit capital and enjoy the convenience of automated reinvesting completely hands-free and with very lucrative interest rates.

Benefits of Vaults

For Users 

  • Deposit & forget, hands-free automated capital growth at lucrative interest rates.
  • Hedge against impermanent loss by automated reinvesting & dollar-cost-averaging (DCA).
  • Earn Decentralized Exchange (DEX) trading fees while providing liquidity & growing Liquidity Pool (LP) token balance.
  • Portfolio diversification through being exposed to two assets in LP.
  • Avoid expensive blockchain gas fees incurred by manual investing.

For Projects

  • Attract more investors by offering lucrative compound interest rates.
  • Build deeper liquidity for the project's native token, resulting in low price slippage, price stability, and appreciation.
  • Automatic, positive buy pressure on your token (if the underlying reward token is non-native).
  • Expedite token price discovery phase (if underlying reward token is native).

In addition to conventional vaults, Crystl Finance also offers three types of signature vaults, namely V3 Vaults, Boosted Vaults, and Ultra Farms. Let’s briefly look into each of these. 

V3 Vaults

V3 Vaults are a unique Crystl Finance offering. They were designed from scratch to provide  unprecedented flexibility and versatility for building yield maximizers. They offer efficiency in terms of gas optimization and are extremely cost-effective in terms of deployment, thereby allowing Crystl Finance to launch and maintain a variety of strategies. V3 vaults offer users higher compounding frequency compared to conventional vaults, in addition to a variety of staking options. 

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Conventional vaults are limited to a compounding frequency of 1-4 times a day, depending on the strategy, to ensure maximum profitability between transaction costs and earned rewards. However, because V3 Vaults are extremely gas efficient, they compound much more frequently, thereby generating higher rewards. Also, the compound events are initiated on every deposit or through additional manual contract calls. 

Ultra Farms

Ultra Farms are an exclusive Crystl Finance product. They are used to accept LP tokens as deposits to farm reward tokens on a third-party platform and stake those tokens in a single staking strategy to earn interest on those tokens. Compared to standard vaults, which accept LP tokens as deposits and reinvest the rewards to accumulate more LP tokens, Ultra Farms reinvest the rewards into a strategy that earns interest for only one type of token.

In regular farms, users are required to manually harvest and reinvest rewards between strategies to achieve compounding interest. This process can be tedious, especially for novices, and requires significant gas fees to initiate the necessary transactions, which has an overall effect on the rewards generated. Ultra Farms, however, are completely automated and require no gas fees, just the initial deposit. They offer users the ability to maximize their passive income in the one token of their choosing. 

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For projects, Ultra Farms alleviate the sell pressure created on tokens and maintain their value through the creation of positive buy pressure by earning rewards on another platform, exchanging those rewards for the native token, and staking the native token in a single auto-compounding strategy–rewards are not sold for LPs but reinvested into single staking pools. Ultra Farms also create an environment for attracting greater liquidity by enabling protocols to reward token holders, which in turn leads to long-term price stability followed by the price appreciation.  

Boosted Vaults

Boosted Vaults are an additional layer of rewards added to the V3 Vaults. In this mechanism, users’ deposits are tokenized with proof-of-deposit voucher tokens, which can be staked further to generate additional rewards. One obvious benefit is that users have the ability to passively generate even higher APYs. 

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However, for protocols, the Boosted Vaults can add immense value. Protocols can boost a vault with their native token to further encourage liquidity providers with an above-average APY, aligning incentives between the protocol's goal to build deeper liquidity and the liquidity providers' desire for maximized passive income. This can create marketing exposure and potentially attract new investors. 

ZAP Mechanism

Zap is a simplified one-step mechanism to use vaults without the need to manually create LP tokens. It is especially beneficial for users new to DeFi, as it simplifies the process of creating LP tokens which can be complicated and overwhelming. All users need to do is select the token they need for the liquidity pool and use the Zap feature to deposit that token in the vault. In case they need to exit the vault, users can use the Zap Out feature to cash out to a single token in just one transaction. This ease of use also facilitates greater activity on participating protocols which results in higher TVL and liquidity.

Revenue Sharing

The Revenue Sharing mechanism is integrated into Crystl Finance’s upcoming Mining Guild. Through this mechanism, CRYSTL holders can provide liquidity for the token on various blockchains in order to earn passive income in dividends. Dividends will be paid in the native gas token of each blockchain residing on Crystl Finance. For example, on Cronos, dividends will be paid to CRYSTL-CRO liquidity providers in CRO. This model will be replicated on all future blockchains the protocol will operate on.

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Crystl Finance also generates revenue via the 5% performance fee charged on each compound in vaults. This fee is used to cover the operational costs–transaction fees, etc. It is also used to fund the protocol treasury and to distribute rewards to CRYSTL token holders. At the time of writing, revenue sharing allocation is as follows: 1% for the Mining Guild and 4% for the treasury. As the TVL in Crystl Finance Vaults on various blockchains grows, the allocation will change as the community will decide how to best reward stakers in the revenue sharing pool. The protocol will also introduce an auto-compounding vault on top of the revenue-sharing dividends.

CRYSTL Token

CRYSTL is the protocol’s native utility token. The maximum supply is limited to 12.5 Million–hard-capped by the community through a governance proposal. The token is used to distribute rewards to the community through the aforementioned governance mechanism. It can also be used to generate rewards through Crystl Finance’s auto-compounding vaults. 

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Key features of the CRYSTL token:

  • Limited Supply: As the supply is limited to 12.5 Million tokens, each token is a scarce and a revenue-generating asset. It is designed to appreciate in value over time. 
  • Revenue Sharing: It enables users to generate revenue on multiple blockchains  through the staking mechanism.  
  • Governance: Token holders can participate in the protocol’s governance–thereby having a stake in the decision making.  
  • Automation: The token is capable of passive-income generation in automated vaults when paired with tokens such as CRO, MATIC, etc.   
  • Coss-chain interoperability: The token is operational on multiple chains, such as Cronos and Polygon, with plans to expand to other chains. The limited supply will be split across the chain thereby creating scarcity and price appreciation.

Governance

As the protocol aims to grow into a fully non-custodial Decentralized Autonomous Organization (DAO), It is imperative to empower the community. For precisely this reason, Crystl Finance has a robust governance mechanism. It enables CRYSTL token holders to vote on critical decisions pertaining to the future of the platform. This model aims to further the goal of decentralization by enabling users to vote on tokenomics, changes in business strategy, and expanding token utility. 

Voting power will be determined by the number of CRYSTL tokens held in the user’s wallet. The governance process will begin with a snapshot of each wallet address and will be followed by a voting period on a number of proposals. 

Long-Term Objectives

Crystl Finance aims to move to a sustainable protocol-owned liquidity model and have a foothold in DeFi 2.0. It also intends to capture the vault market on Cronos and Polygon blockchains and maximize mutual benefits between partners, users, and shareholders. It will also offer liquidity aggregation as a service that helps users, projects, and DAO protocol treasuries to build liquidity while establishing the CRYSTL token as a reliable source of long-term passive income through revenue sharing. 

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Recent Developments

As reported by Web3Wire, Crystl Finance recently rebranded to position itself as a multi-chain platform. Web3Wire also reported the protocol’s partnership with RoofTop.Dev. 

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The platform recently announced on Twitter that it intends to launch on the BNB Chain. Watch out for Web3Wire’s detailed piece on the matter. It also recently partnered with Annex Finance and Single Finance to provide them with vaulting services. 

Team Background

The Crystl Team is led by the following key personnel:

  • King of Crystals [Geo] –Chief Operating Officer: With a background in Data Science, Financial Services, and Consulting, Geo ensures the protocol is driven by solid strategy, talent, and resources.  
  • Jimmy The Hypnotist –Lead of Marketing: Jimmy is responsible for high-level marketing strategies, including branding, design, community engagements, and other initiatives.
  • Crypto Light–Marketing & Media Manager: Responsible for social media presence, marketing strategy consulting, writing & content creation, as well as making contributions to supporting resources & documentation.

Concluding Thoughts

Since the launch of Crystl Finance, the platform has witnessed significant traction from the users in the community and various partners in the ecosystem like Single Finance. The protocol is currently in the stage of quick growth, with the new monthly users bringing over 50% of the active users on the platform.

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Despite that, the protocol currently has a total value locked (TVL) of $4.46 million, as per the data from DeFiLlama. Crystl Finance’s TVL hit an all-time high of $13.95 billion on March 31, 2022, in an unnatural spike seen on that particular day. 

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The protocol is a part of the evolving DeFi 2.0 narrative that has a focus on solving the issues that arose in traditional DeFi 1.0 protocols, especially liquidity. The implementation of the concept of protocol owned liquidity by Crystl Finance makes it more secure than the alternative available to users, i.e., liquidity pools. This evolved vision for the community and the protocol could be one of the drivers that make Crystl Finance a DeFi mainstay in the upcoming DeFi 2.0 revolution.

Find more about Crystl Finance here:

Website | Twitter | Reddit | Gitbook | Github | Discord |

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