Fund Tomochain community operations through loans on Fringe Finance

Summary:

Fringe Finance is a decentralized money market designed to unlock the capital spread in crypto assets regardless of their capitalization and supported networks.

Fringe Finance is offering the Tomochain DAO to use TOMO tokens as collateral to borrow up to $75,000 in USDC to be utilized at the discretion of the DAO.

Motivation:

  • Borrowing against TOMO to fund the DAO’s operations instead of selling benefits all the holders by removing selling pressure.

  • The Tomochain DAO borrowing against its TOMO holdings, rather than selling them, both signals alignment and better align its interests with those of TOMO holders.

  • Fringe Finance has integrated TOMO as a collateral asset to borrow USDC.

  • Fringe Finance provides added utility for all holders of TOMO including the Tomochain DAO by allowing them to borrow USDC against their TOMO.

  • The TOMO community can utilize borrowed USDC funds elsewhere in the crypto ecosystem without the necessity to sell TOMO tokens.

Specification:

  • TOMO has been assigned a loan-to-value ratio of 39% on Fringe Finance. This means that for every $1000 worth of TOMO collateral a $390 loan can be taken.

  • The current borrowing interest is 2.34%/year, but the rate is currently floating(*).

  • The borrowing limit for TOMO on Fringe Finance is currently $75,000.

Steps:

  1. Deposit sufficient TOMO token collateral on the Fringe Finance platform from the treasury.

  2. The corresponding USD-denominated line of credit is issued.

  3. Up to $75,000 USDC loan can be taken and used by the Tomochain DAO.

  4. Announce the taken loan on social media and official blog.

Benefits:

  • Reduced selling pressure on the market

  • Signals the additional utility to TOMO holders in that they can access stablecoin loans

  • Fund DAO operation by locking TOMO tokens and increasing cash flow

Team:

Paul Mak, CEO twitter. com/Unbankt
Brian Pasfield, CTO
Shirokov Konstantin, CMO twitter. com/konstant_crypto
Carlos Cano, Head of Community twitter. com/CarlosCanCab

About Fringe Finance:

Fringe Finance (ex Bonded) and TOMO have already announced the integration: TomoChain To Join Bonded’s Primary Lending Platform! | by Fringe Finance | Medium.

Fringe Finance is also the official partner with projects such as Polygon, Chainlink, REN, Elrond, Bancor, and IoTeX.

Fringe Finance has been audited by Hashex: https:// github. com/HashEx/public_audits/blob/master/Fringe%20Finance/Fringe%20Finance.pdf.

On Fringe Finance borrowers deposit collateral against which they may take out loans in a select set of the most liquid and reliable USD stablecoins. The resultant benefit for borrowers on Fringe Finance is that they have access to deep, unfragmented capital pools from which to borrow. This significantly reduces both the interest rate slippage they can expect when taking out a loan, in addition to reducing interest rate volatility over the course of their loan.

Fringe’s depth and concentration of lending capital liquidity also benefit lenders, as it similarly reduces the interest rate slippage they can expect to experience when depositing capital as well as reducing fluctuations in the interest paid on their capital. This indirectly benefits borrowers, as lending on Fringe becomes more attractive, resulting in more capital being available at lower interest rates.

An additional indirect benefit for borrowers is that Fringe’s platform employs empirically sound custom algorithms to determine lending parameters so as to maximize platform stability. This attracts lenders to the platform and therefore results in greater capital available for borrowers.