Strike is a decentralized finance lending protocol that lets users earn interest on their cryptocurrencies by depositing them into various supported markets on the platform.
When participants deposit tokens into a Strike market, they receive sTokens as a representation of their share in the pool. These sTokens can be exchanged back for the original cryptocurrency deposited at any time. For instance, if you deposit ETH into the pool, you get sETH in return. Over time, the exchange rate of these sTokens to the original asset improves, allowing you to redeem them for more of the initial asset than you put in, which is how interest is earned.
On the other hand, borrowers can obtain a secured loan by depositing collateral into any Strike pool. The loan-to-value (LTV) ratio depends on the collateral type and generally ranges from 50 to 80%. Different assets have varying interest rates, and borrowers risk automatic liquidation if their collateral dips below a specified maintenance threshold.
Who Are the Founders of Strike?
Strike is a DeFi platform that does not have any allocated team or founder supplies. It is designed to be fully decentralized and governed by its community.
What Makes Strike Unique?
Strike stands out because its token distribution excludes venture capital, shareholder, or founder/advisor allocations, ensuring a high level of community distribution. The platform plans to implement a system called "Governors," which can rapidly whitelist tokens for market inclusion, enhancing its scalability.
What distinguishes Strike is its community-driven governance. Holders of its governance token, STRK, can propose, discuss, and vote on changes to the protocol without any input from the Strike team. This includes decisions like adding support for new cryptocurrencies, altering collateralization parameters, and adjusting STRK token distribution methods.
Users can acquire STRK tokens from third-party exchanges or earn them by participating in the Strike protocol, such as by making deposits or initiating loans.
How Many Strike (STRK) Coins Are There in Circulation?
Similar to many cryptocurrencies, the supply of STRK tokens is capped. The total supply is limited to 6,540,888 STRK, with about a third of them (2,540,888) currently in circulation.
From the total supply, 4 million tokens are set to be distributed to Strike users over an 8-year timeframe.
The emission rate of STRK can be adjusted, as users have the ability to vote and modify the rate through community governance proposals.
How is Strike Finance Secured?
Strike operates entirely through smart contracts, which automatically mint sTokens when Ethereum and ERC20 tokens are deposited, and allow users to redeem their portion with their sTokens.
The platform enforces a collateralization factor for all its supported assets, ensuring that each market is overcollateralized consistently. If the collateral drops below the required level, it is sold to liquidators at a 10% discount, which reduces the loan and restores the collateral to a safe level.
This setup helps borrowers maintain adequate collateral, provides a protective buffer for lenders, and offers liquidators an opportunity to earn.
