I can’t be the only one who gets increasingly worried about the value of the cash sitting in their bank constantly decreasing over time. With the US printing 25% of all dollar ever minted in history over the past 18 months, it is hard not to get a little paranoid over the inevitable inflation that is around the corner.
In some respects, it is already here. The consumer price index which measures an average of regularly bought goods has just recently been reported to increase 4.2%.
So when the cost of everything around you increases, the amount of cash you have becomes less and less valuable. This inflation increase is the fastest since 2008 and we all know what was the cause of that now don’t we.
As more and more people seek safe havens and hedges against inflation we can see the effects play out in assets that offer this life raft. Gold would initially be the place for smart money but this is a thing of the past.
Bitcoin and other cryptocurrencies due to their inherent scarcity and decentralised nature offer a modern, accessible and trustless way to protect that hard-earned wealth. Due to there being only 21,000,000 million BTC to ever be in existence, this finite asset is quickly becoming the gold standard for a hedge against fiat currencies.
There are other alternatives though and some make that 21 million look like an infinite number. So what if there were cryptocurrencies that there were only 100,000 coins ever to be in existence? That would be great for the old supply vs demand equation.
I can do you one better, well… 100x better in fact. What about a cryptocurrency with a 1,000 max supply? Well, that is what we are going to look at today. Oh, and to further increase its value, it gains some very impressive passive income without you having to lift a finger.
The name of this project is Holder Finance.
Holder Finance (HFI) and its native token aren’t just a standard cryptocurrency that is a store of value though. They are much more than that. They take the scarcity incentive to the next level, whilst also offering a passive income yield strategy that sees its holders earning income by just holding the HFI token. Impressive stuff.
HFI is a governance token on the Holder Finance platform. It also serves as a utility token that enables the passive yield to be generated.
Governance tokens for those of you new here is a very philosophical and socially robust way to hand power back to a tokens community.
In the real world, a companies decision making is done primarily by a CEO and maybe a few board members. Joe public doesn’t necessarily get a say in the matter.
If Elon Musk wants to dilute the Tesla share by 10x to get some more funds to meet some cyber truck deadlines, then he would be in his rights to do so, given he is the majority shareholder or better yet has premium shares.
This isn’t some hypothetical situation it has happened in the past a few times. .
So as HFi seeks to self govern with HFI holders benefitting from voting in the future direction of the project. HFI holders are incentivised to vote in the best interest of the project as a positive outcome for the project reflects in the HFI price.
HFI taps into the booming Decentralised Finance space too. HFI, as it is an ERC20 token running on the gold standard blockchain that is Ethereum, can interact with smart contracts such as the HFI vault.
This vault allows users to deposit their HFI token into a vault which then earns more HFI. This is a common practice across the DeFi ecosystem and is a great way to 1) tie up a lot of the circulating supply of HFI creating a greater demand for the token, whilst 2) rewarding the HFI holders for their participation in being an investor in HFI.
As you can imagine, the more HFI you hold the greater the rewards you will be given. This creates an even greater incentivisation structure to hold more HFI. This is great for early adopters of the token as this will reflect in the HFI price.
I think this alone is more than enough to encourage people to invest in Holder Finance. The team though, have other plans.
You can think of Holder Finance as a platform that then has additional products. The first product they are releasing is the first of its kind in this space and I for one will certainly be using it.
Holder Swap (HFS) is a decentralised exchange plugin allowing users of the most popular DEXs out there to be able to place limit orders instead of market buys.
What this means to the uninitiated ape is that, if you use Uniswap or Pancake Swap, usually you have to constantly monitor the price to find a good entry or exit price. Take this from me who is on Pancake Swap every single day, if there was a way to set entry and exit prices for buying and selling my coins, I would use it. Now, thanks to Holder Swap, there is.
This is the perfect intersection of CEX/DEX and the order book model vs AMM. If that is a load of jibberish to you, let me explain.
A centralised exchange due to their very nature and huge traffic operate using a traditional order book model. People put their limit orders into the order book.
If ETH is at $4000 but I don’t want to pay $4000, I would be happier paying $3,800. On a traditional CEX like Binance etc. you can put a limit order stating “If the ETH price hits $3,800, then I will buy x amount”. The CEX then executes this order if the price hits.
All well and good. So, with a decentralised exchange (DEX) like Uniswap or Pancake swap, this isn’t how it works. The first emerging DEX tried to use the traditional order book model to allow users to effectively trade with other users directly without the need for the intermediary CEX. This, however, became increasingly clunky and difficult to line peoples orders up.
A few years ago Hayden Adam’s, who at the time had only been coding in solidity (the Ethereum programming language) for a little over a year, came up with and released Uniswap. This done away with the traditional order book model and instead utilised what is known as an automated market maker or AMM.
The AMM invites users to supply two coins, let’s say ETH and USDT to a smart contract known as a pool. These people are then known as liquidity providers as they provide liquidity to the market to be able to trade.
People can then use Uniswap and its AMM smart contracts to trade with directly. So if I wanted to buy ETH with USDT, I would trade my USDT for ETH that is in the ETH/USDT pool. Make sense?
In return for providing these coins as liquidity, LPs receive a proportion of the transactions fees whenever anyone interacts with this pool i.e. buys or sells ETH/USDT.
The problem with all of the above. There is no cross over. If you are buying and selling on Uniswap or Pancake Swap, you best be at your laptop for a large proportion of the day if you are looking to trade. Kiss goodbye to sleeping throughout the night too.
Well, fortunately, the guys at Holder finance have you covered. They have come up with an ingenious way to create an order book whilst still harnessing the power of AMMs.
Oh, and they are going to drastically reduce your ridiculously large ETH gas fees whilst doing it too. CRAZY.
So how do they do this and what does it mean for HFI and HFS holders?
There are two types of users on the Holder Swap platform. The trader (trade owner) and a trade executor.
The trader – As the name suggests, the person who wants to trade. They will use the Holder Swap user interface to place a buy or sell order at a certain price.
Example – ETH current price $4,000. The trader puts a limit buy order on Holder Swap for $3,800. This order is then placed in a smart contract.
The executor – the executor is a person who will then execute the trade on their behalf when the trade hits that price. The executor will also have lots of other orders to execute. Once there is enough interest at a certain price and the price reaches the designated buy price, the executor can compile and buy the ETH.
As they have batched lots of individual trades into one order, the transaction fee is drastically reduced. Instead of every person paying a single transaction fee, the executor pays one transaction fee for all people in the trade.
So, what does the executor get from all this you ask? Well, they set a trade fee at a maximum of 25% of a regular trade price.
If more than 4 people are in the trade then the executor is in profit. If 10 people are in the trade then the executor makes a lot of profit.
But, again, ingeniously, Holder Finance has created a way to keep this fair for all users. The trade fee set by the executor is variable. If another executor is willing to pull off the trade for a lower fee, then the trade owner is obviously going to go with the cheapest option.
This creates a great supply and demand model for both the trade owner and those acting as the executor.
Like I said, GENIUS.
A closer look at the HFI and HFS tokenomics.
As we mentioned above there are only ever going to be 1,000 HFI tokens. That number in and of itself is igniting the ape in me to jump into this project.
100 tokens or 10% kept for the team, with a further 30 tokens unlocked in Feb 2022
100 tokens reserved for private investors
No pre-mine – meaning retail get equal opportunity to earn HFI
Staking, liquidity providers and platform usage generates more tokens to be minted
The remaining 77% of the supply is fair game.
Their mining schedule is also a very inventive way to release further HFI tokens. It can be a little confusing, but the TLDR of it is that the earlier you are in the project the higher the rewards paid out in HFI will be.
The token emissions will reduce as the project goes on, which is a great way to create increased demand and increase the HFI price steadily over time.
Projects often fall into the trap of trying to over incentivise users by flooding them with too many tokens over a short space of time. I have yet to see this work. It creates a huge supply which user either sell-off and create a big sell pressure for the token.
Holder Finance has got this right too. Some of their token emissions will go all the way until 2030!
This means that the total supply of tokens won’t be on the market until later in the decade. This is great for the longevity of the project and the supply/demand ratio.
HFS recently underwent an IDO on the Wault Finance platform. Wault Finance has notoriously had extremely great success with all their previous IDOs including SWIRL, EULER and now HFS.
There are 3,000,000 HFS tokens max supply. Initially, these HFS tokens will be shared amongst ERC20 and also BEP20, meaning they will be available on Ethereum as well as Binance Smart Chain, taking full advantage of a multi-chain opportunity.
Where does HFI come in?
Well, as we spoke about previously, HFi is a community project, so HFI holders are entitled to rewards generated from all Holder finance products, including Holder Swap.
Upon 200 HFS or 0.01 HFI being traded, 1 new HFS token is minted. This token is then distributed in this way.
If we take a look further at the cashback which receives 0.3 HFS of the newly minted 1HFS following 200HFS or 0.01HFI being traded on the platform, we see that HFS and HFI holders benefit here.
That 0.3 HFS is then distributed to HFI/HFS holders in a 30:70 proportion, respectively.
That way, as well as earning HFI yield from the HFI vault, the HFI holders earn HFS each time a new token is minted.
Granted, the HFS holders earn a slightly bigger piece of the pie, although they have fewer mechanisms to earn yield than the HFI holders, for now.
The supply of the HFS is also described as elastic. This effectively means that as the project develops the number of tokens released into the supply becomes fewer and fewer. So as the adoption increases the scarcity of the HFS token increases creating demand and buying pressure, which is great for HFS holders!
If that wasn’t enough, HFS also has a deflationary mechanism built in. On each sale of HFS, 5% of the amount is taken from the transaction and sent to a burn wallet. This is then removed from the supply forever.
All things point to a positive future for HFS holders. Increasingly difficult minting of HFS with an added burn mechanism, whilst the token itself has huge utility on the Holder Swap platform, across BSC and Ethereum… Not financial advice.
The best thing about it? It is currently less than a $5 million market cap…
Additional features –
Automated Arbitrage using Holder finance.
I really really, like this other feature of Holder Swap. As the central Holder Swap platform can plug into nearly all big DEXs, it can execute quick, cheap and effective arbitrage trades across platforms.
The image from their whitepaper displays it very well.
For example, if ETH is trading at a higher price on Sushi Swap than it is on Uniswap, using this feature of Holder Swap, you could automatically execute an arbitrage trade. Buying ETH at a slightly lower price on one exchange and automatically selling it at a premium on another.
This can all be automated and carried out several times a day if the numbers make sense. Due to the reduced fees and more than likely high demand for such low-risk trades, I can see this being a hugely popular tool on Holder Swap.
It is also great for the incoming multi/cross-chain demand that is happening right now. Increasing liquidity between exchanges and tightening the spread between prices.
Sign me up…
Overall, I think Holder finance is a truly innovative and unique platform that is encouraging during this current moon boy and scam coin phase. I will be keeping a close eye on the project and for full disclosure I hold HFS. I have just received a notification that HFI is now trading on Pancake Swap too…
Often with multiple tokens under one project people can get confused and think “Which one should I hold?” – this isn’t a competition, in my opinion, you would do well to hold them both and reap the benefits of the whole platform.
Holder Finance Resources –
Twitter – https://twitter.com/HolderFinance
Telegram – https://t.me/holder_finance
Website DApp – https://holder.finance/
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