Strike Finance

Strike is a decentralized money market forked from the Compound protocol and designed to focus scaling a larger availability of supported collateral and lower the threshold of entry for new collateral. With the current architecture and parameters of the Compound protocol there is a requirement of 100,000 COMP which is equivalent to approximately $15,000,00 to create a proposal to add a new asset into Compound with a required quorum of 500,000 COMP. The Compound protocol recently enabled a mechanism where users can crowdfund the required COMP to make a proposal, but it still requires nearly $15 million dollars in COMP plus $60 million in COMP voted support quorum to pass. This does bring a higher level of security in adding non-qualified assets, but it does make the scalability of the platform hindered. With Strike, the barrier to entry becomes much more feasible to add more collateral without having to have a trade-off of lower security. The value proposition in Strike is to enable elected governors, similar to delegates, who can white list which assets can be added into the protocol and then enable the community to vote on them. Governors are community members voted in by their peers with delegated STRK tokens.

With the Compound protocol, there is a great deal of control to venture capital firms and early investors into Compound Labs. Therefore, the current distribution and dilution of COMP is very disproportionate. This gives the company very centralized powers at this time. There are plans to distribute over 4 million COMP over 4 years to the platform users. It is estimated that by the end of this time, it is hoped that the platform is sufficiently decentralized, but there will still be huge control of the supply by institutions.

With Strike, the token governance of the platform will be very distributed. The governance process will be decentralized from the day the protocol is launched with over 45% of the total maximum available tokens circulating. Strike presents itself with a max cap of 6,540,888 tokens and enabling approximately 3.5 million STRK to be mined through liquidity mining (farming) incentives on the Strike Protocol over a recommended period of 8 years. This will distribute STRK per block to platform users. With these token economics (“tokenomics”) the Strike protocol will be sufficiently decentralized at launch and the STRK token will have immediate utility within its platform.

Protocol

Strike is a decentralized money market that enables users to borrow and supply digital assets to the protocol within a non-custodial environment directly within the Ethereum blockchain. This means that users, at all times, have control of their digital assets and are bound by the protocol’s parameters directly on-chain. The protocol is autonomous and algorithmic with its parameters being controlled by governance proposals and yield curves. Strike users can access the platform via smart contracts, the Strike API, or via a frontend application. The main functionality of Strike is to enable users to supply collateral to either earn as a supplier or to use as collateral to borrow other digital assets from the protocol.

Governance

The Strike governance smart contracts control the changes and decisions that are made on the protocol. This part of the protocol is forked from Compound and follows the entire same principals with added benefits of Governors who are 21 addresses delegated by Strike Token holders. Governors are able to white list new assets that are to be added to the protocol to prevent malicious actors to participate in attacking Strike. Governors are the top 21 weighted addresses from either STRK balance or delegated STRK balances. Governor cycles are built around Epochs that last 28 days. At the conclusion of the 28 days, there will be a new set of Governors elected, which may be the same re-elected or new ones that make it to the top 21.

When a new digital asset is to be whitelisted on the protocol, these 21 delegated Governors will vote on-chain to add the digital asset to the supported list of available digital assets. Thereafter, a formal proposal must be created and voted on. All Strike Token holders will be able to participate thereafter on the protocol’s decision on the addition or removal of white listed digital assets. By enabling this process, not only does the protocol now have a low barrier of entry to enable on-chain additions of digital assets, but it fixes the security trade-off by having Governors in place to white list coins that fit the protection and scalability of Strike.

Each Strike Token is considered to be 1 vote weight, therefore, 1 STRK equals 1 vote. There is a requirement of 65,000 STRK to form a proposal which requires 130,000 STRK to meet a quorum of approval at a minimum. With these two parameters in mind, their still needs to be majority voted on based on the allowed time limit of approximately 72 hours based on block speeds on the Ethereum blockchain. Users can create proposals that enable new white listed digital assets to be added, which price oracles to use, digital assets to be removed, reserve factors, collateral ratios, protocol reserve use, yield changes, and virtually all parameters on Strike via the Governance smart-contracts. Each Governance proposal that passes requires an approximate 48 hour wait period before it may be executed by anyone on-chain. If the proposer has a lower than 65,000 STRK balance at any point during the proposal, any user may cancel the proposal on-chain.

Strike Token (STRK)

The Strike Protocol is governed and rewarded by its native cryptocurrency called Strike Tokens (STRK). Strike Tokens are built and deployed on the Ethereum blockchain and are ERC-20 based assets. STRK enables users to create proposals, vote on proposals, and participate in liquidity mining incentives on the platform. Strike Tokens were made available through distribution to holders and users. This means there will be no team supply, the protocol will be decentralized, and the users will mine the remaining supply until the max supply is reached. With Strike, there will be a max supply of 6,540,888 Strike tokens to ever exist. This means users are able to mine the remaining approximately 3.5 million STRK which will be made available through liquidity mining (farming) incentives on the protocol. The following allocation and distribution is recommended below but is ultimately controlled by Strike Governance.