What is Strike?
Strike (STRK) is a decentralized finance (DeFi) lending protocol that allows users to earn interest on their cryptocurrencies by depositing them into one of several markets supported by the platform. The platform is unique as it is fully decentralized, meaning there are no team or founder supplies, and it will be operated by the community.
When a user deposits tokens to a Strike market, they receive sTokens in return. These sTokens represent the individual’s stake in the pool and can be used to redeem the underlying cryptocurrency initially deposited into the pool at any time. For example, depositing ETH into a pool will result in receiving sETH in return. Over time, the exchange rate of these sTokens to the underlying asset increases, which means users can redeem them for more of the underlying asset than they initially put in, thus distributing the interest.
Borrowers can also take a secured loan from any Strike pool by depositing collateral. The maximum loan-to-value (LTV) ratio varies based on the collateral asset, but currently ranges from 50 to 80%. The interest rate paid varies by borrowed asset and borrowers can face automatic liquidation if their collateral falls below a specific maintenance threshold.
One of the key features that makes Strike unique is its community governance. Holders of the platform’s native governance token, STRK, can propose changes to the protocol, debate and vote whether to implement changes suggested by others without any involvement from the Strike team. This includes choosing which cryptocurrencies to add support for, adjusting collateralization factors, and making changes to how STRK tokens are distributed.
STRK tokens can be bought from third-party exchanges or can be earned by interacting with the Strike protocol, such as by depositing assets or taking out a loan. The total supply of STRK tokens is capped at 6,540,888 and as of writing, approximately a third are in circulation. Out of these 6,540,888 tokens, 4 million tokens will be distributed to Strike users over an 8-year period. The exact rate of STRK emission is subject to change over time, as voters can increase or reduce the emission rate by passing a proposal through community governance.
Strike is secured through smart contracts, which act to mint sTokens after Ethereum and ERC20 assets are deposited, and allow Strike users to redeem their stake using their sTokens. The protocol enforces a collateralization factor for all assets supported by the platform, ensuring each pool is overcollateralized at all times. If the collateral falls below the minimum maintenance level, it will be sold to liquidators at a 10% discount, paying down some of the loan and returning the remainder to an acceptable collateralization factor. This arrangement helps to ensure borrowers maintain their collateral levels, provides a safety net for lenders, and creates an earning opportunity for liquidators.
Strike is a DeFi lending protocol that enables users to earn interest on their cryptocurrencies by depositing them into one of several markets supported by the platform. The platform is fully decentralized, meaning it is operated by the community. Users can earn interest on their deposited assets by receiving sTokens in return, which can be redeemed for more of the underlying asset than they initially put in. Borrowers can also take out secured loans by depositing collateral, with the maximum loan-to-value ratio varying based on the collateral asset.
The platform's community governance sets it apart, allowing holders of the native governance token, STRK, to propose and vote on changes to the protocol. The total supply of STRK is capped at 6,540,888, with 4 million tokens being distributed to users over an 8-year period. The platform is secured through smart contracts and a collateralization factor for all assets, ensuring each pool is.
The investment information, comments, and recommendations provided here do not fall under the scope of investment consulting. Therefore, making an investment decision based solely on the information and comments provided here may not yield results that meet your expectations.
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