COIL – A Decentralized Crypto Token With Elastic Liquidity Supply Aimed At Solving Market Manipulation
As the cryptocurrency market continues to mature, crypto projects also continue to evolve further catering to the needs of the market. So far, we have seen cryptocurrency projects with a fixed supply for the native tokens. The ultimate aim here has been to create scarcity and drive crypto prices higher.
Interestingly, we have new crypto projects in the market providing an elastic supply of decentralized digital currencies. COIL is one such dynamic and completely decentralized elastic supply token that aims to cater to the liquidity needs of the broader crypto market, and more importantly, solves issues of market manipulation.
The COIL cryptocurrency works like an automated central bank wherein the supply of COIL tokens is adjusted as per the economic supply and demand factors. The COIL token is basically an elastic cryptocurrency with its target price at $1 USD adjusted for CPI inflation.
The price of COIL token can be higher or lower than $1, however, the supply is always adjusted to meet the target of $1 USD. If high demand drives the price higher above $1, COIL will add more supply creating a selling pressure and a ‘recoil’ action. If the price drops because of more supply and less demand, COIL will burn a few tokens from the circulating supply to create scarcity. This makes COIL one-of-its-kind cryptocurrency with such flexibility and supply elasticity.
The COIL rebase system is implemented every 23 hours to rebase the supply. The rebase function is a new concept to the crypto market and is basically associated to supply smoothening for decentralized elastic supply tokens like COIL.
Since the COIL tokens expand and contract based on the demand and supply, Rebase ensures that the percentage holding for users remains the same. You can learn more about the COIL token rebase here.
COIL – Fueling DeFi Lending
COIL basically stands for Crypto Oil. Just as oil has been the backbone of the real-world economy, COIL aims to be the backbone of the crypto world economy.
The project aims to be a hedge asset for all of the crypto world as well as to the fastest emerging sector of Decentralized Finance (DeFi). All of the cryptocurrencies can be backed and hedged to the COIL token. Moreover, it acts as a fuel for DeFi lending and a stable unit of account for borrowing purposes.
The COIL project serves to be the backbone to the whole of the crypto economy in a way that it helps DeFi investors to reduce their dependency on some of the centralized stablecoins. It can work as a hedge asset, a DeFi collateral, and a stable medium of exchange for the entire crypto space. The project is positioning itself as a useful crypto token and a collateral asset for Decentralized Finance (DeFi). Its unique qualities like decentralized, less collateral, self-governing, and more stable asset, makes it important to DeFi. In the future, COIL will be used on different DeFi projects like Tezos, Polkadot, Cardano, and others.
Coil Spring – Providing Liquidity to Uniswap
Released on September 9, the COIL Network launched its native Coil Spring platform to incentivize liquidity on Uniswap. The Coil Spring is designed to release rewards from the network’s own liquidity fund for which they have allocated 1/5th of the token supply as a testament of their commitment to offering long-term liquidity.
Coil Spring basically works like a certificate of the deposit system in a real-world bank. By choosing a time-lock period, users agree to provide liquidity for the given time. In case the user is willing to pull out the liquidity before time, they will have to pay a penalty. It wants to make sure that liquidity is essential in the success of any project. Furthermore, it aims to solve the issue of massive fluctuations in liquidity and volatility by making it more predictable and chartable.
Coil Spring allows users to easily map out the amount of liquidity entering or leaving the pool and thereby make more logical decisions. Coil Spring also aims to solve market manipulation issues by having a robust system in place that rewards the good actors and penalizes the bad ones. It further rewards the good actors by redistributing the penalty to the good players.
Conclusion
The Decentralized Finance (DeFi) is still in its early stage of development but has started to receive massive traction. COIL believes that they are well-positioned to meet the liquidity demands of the DeFi ecosystem.
The official COIL litepaper notes:
“Not only will COIL be vital in current crypto ecosystems, but COIL can also be bridged into the private ecosystems of tomorrow pioneering a whole new world of Private DeFi many have not even thought about yet”.
