SLOTH.Finance— A new YF breeding experiment to make DeFi protocols stable and liquid
Sloth Finance takes DeFi yield farming further by incentivizing sustained support to selected liquidity pools and enhancing stability through longer time-locks and a 3,600% APY.
Introducing Sloth Finance
Since rising to crypto mainstream prominence in 2020, the disruptive new DeFi sector has been hamstrung by the transient lifespan and volatility of liquidity pool projects.
Sloth Finance offers a new way, where liquidity providers (LP) are rewarded for providing sustained support for selected liquidity pools.
In SLOTH speak, that translates to:
Sustained Longevity Over Temporary Highs.
or for the not-so-slothful … Slow Laziness Overcomes Trading Hot!
What is Sloth Finance?
Sloth Finance is a DeFi protocol that creates stability in curated DeFi protocols by injecting incentives for token holders who are willing to provide sustained and stable liquidity.
Sloth Finance facilitates deflationary yield farming that rewards liquidity pool participants with fixed annual percentage yield (APY) of up to 3678% through compound interest.
Sloth Finance is a social experiment, and based on the interest yielding smart contract, users will be given at least 1% interest gain on their capital deposited. When compounding 1% to the power of 365, we reach the annual percentage yield of 3678% (37.78 minus the principal 1).
Rationale
In 2020 the nascent DeFi has attracted participants with a high-risk tolerance who scour the sector for promising tokens that could reward them with exponential returns in exchange for the decentralized liquidity they provide.
However, most DeFi projects have recently suffered from market drawbacks due to the early and abrupt exits of LPs. How can this be overcome? By raising the barriers for early withdrawals and applying DeFi lessons learnt so far.
Sloth Finance builds on the best practices of protocols like Seal.Finance and Yearn.Finance. By channeling powerful liquidity and stability, it hopes to contribute to DeFi’s continued growth.
The Sloth Yield Farming Model
Incentivizing Elastic Deflationary Farming
The Sloth protocol incentivizes yield farmers that add stability and liquidity to its project by minting new protocol tokens.
To begin, $SLOTH tokens will help connect liquidity providers to only 3 DeFi protocols:
● YFValue (VALUE)
● SushiToken (SUSHI)
● WBTC
We decided on these initial projects as they offer what we consider good DeFi community reach, tokenomics and governance. Future liquidity pools shall be decided via community governance.
In order to establish deep liquidity for these leading DeFi protocols, Sloth Finance’s new protocol strongly incentivizes pool token holders if they act as liquidity providers or these new liquidity pools:
SUSHI-SLOTH
YFV-SLOTH
WBT-SLOTH
ETH-SLOTH
How does $SLOTH’s Fixed APY Work?
The Sloth Finance protocol further refines the latest enhancement in liquidity mining, known as “Fixed APY”. DeFi token holders that add liquidity to the $SLOTH pools above will serve as Sloth Finance liquidity providers (LPs) and earn compound interest in return. Put it up, then slow it down! Sloth does not have to be a deadly sin if done right.
The process is straightforward, with 3 easy steps:
Step 1: Add liquidity via our single-side function and acquire the LP token.
Step 2: Deposit the LP token into the $SLOTH reward contract.
Step 3: Earn compound interest continuously on every following day and qualify for $SLOTH
How does SLOTH Breeding Work?
Every 24 hours, the added LP tokens will mint new $SLOTH through the calling of a “breed” function.
The breed function can be triggered by any token holder after the expiry of UTC+0, by simply sending a transaction to the reward contract or interacting with breed.sloth.finance.
Fresh $SLOTH may be bred once every 24 hours and will be deposited single-side to the $SLOTH pool in order to create new LP tokens, which will be distributed to the reward contract of liquidity providers.
Sloth Parameters (Default)
APY
Sloth Finance’s APY is fixed at a set default of 3,678%, which may be adjusted via $SLOTH’s governance.
The 3,678% APY is achievable through daily compound interest of 0.0779% and a lock time of 36 hours.
Over the accumulation period of 365 days, LPs can withdraw 17 times their deposited LP tokens according to the following formula:
1.01 to the power of 365 =3678% (37.78 minus the principal 1).
Burns
Sloth LPs are slow and steady participants. To deter premature withdrawals from the liquidity pools, cute Sloths will incur a 6% net loss of their total stakes when removing liquidity from the SLOTH pools.
Governance
In line with DeFI’s ethos, Sloth Finance is fully committed to being a decentralized protocol that is governed by our entire community, who will be custodians in its evolution by voting on necessary changes with their SLOTH tokens.
Sloth Finance’s decentralized on-chain governance is expected to be activated within a few days after the protocol is launched.
SLOTH Token and Liquidity Pools
These opening SLOTH pools will be released upon launch:
- SUSHI-SLOTH
- YFV-SLOTH
- WBTC-SLOTH
- ETH-SLOTH
The ETH-SLOTH pool is included for the purposes of price discovery and to intermediate between the other SLOTH pools. ETH-SLOTH liquidity providers will not receive compound interest earnings.
The non-ETH SLOTH liquidity pools will be created by voluntary donations by DeFi community participants. Participants who help establish the initial liquidity of pools will be eligible to share in up to 100% of the total LP tokens.
Sloth Protocol
The Sloth protocol presents a paradigm shift in the evolution of LP yield farming. This experiment in decentralized finance avoids all controversial and price-affecting digital asset mechanisms such as pre-mining, initial coin offerings (ICO), pre-reward distribution staking and more.
Perpetual Liquidity
Sloth protocol is a decentralized perpetual motion machine. There will be no expiration date on the distribution of SLOTH as rewards and Sloth Protocol will continue to operate as long as individuals send transactions to trigger breeding.
Technical Details
Token Address: 0xc09d3DbD8F1C5F70F5a624935dFF180AF6FB51C7
Github: https://github.com/sloth-finance
URL: https://sloth.finance
⏰ 36-Hour Timelock
SlothMaster will be transferred to a 36-hour timelock for any admin interactions with the contract. This is meant to secure the interest of all $SLOTH breeders and happy sloths on chain.
Disclaimer:
Sloth protocol is a DeFi experiment. The SLOTH token carries no intrinsic financial value and does not pretend otherwise, existing purely to intermediate with and thereby help stabilize the selected DeFi protocol tokens.
Sloth contracts have not been audited yet, however our team contributors and developers have made reasonable efforts to ensure the protocol’s integrity through testing and collaboration. Any person or entity who chooses to engage with the SLOTH token contract are doing so completely at their own risk.
To facilitate faster development and improvements, the Sloth team will remain anonymous in line with common DeFi industry practice.
The Sloth team and community will not be liable in any way for financial losses incurred due to technical issues or liquidity providing activities. Please perform your own due diligence and thorough research on Sloth Finance and the other protocols before taking any action.
And SLOTH We Go!
To begin adding liquidity to the Sloth Protocol, visit https://sloth.finance.
(Be aware of phishing sites and do the necessary checks that you’re visiting the correct domain.)
The Sloth team will make announcements through our Medium page.
Join us on other platforms:
- Website: sloth.finance
- Twitter: https://twitter.com/slothfinance
- Telegram: @slothfinance
- Discord: https://discord.gg/sqqAMm
FAQs
How is Fixed 3678% APY guaranteed? How does it work?
Sloth Finance is a social experiment, and based on the interest yielding smart contract, users will be given at least 1% interest gain on their capital deposited. When compounding 1% to the power of 365, we reach the annual percentage yield of 3678% (37.78 minus the principal 1).
Why is there a 6% withdrawal loss across all staking contracts? Where does the loss go?
The mechanism is built in to discourage farming exploitation, and the collected sum from the incurred loss goes back to the pool to reward all patient Sloth Breeders.
Why are there only three pools to stake? and how does the single asset liquidity provide work?
We chose to start with pools of YFV, WBTC, and SUSHI as first three experiments. In the near future, we will open to community proposals and decide on the new staking pool(s) based on governance voting procedures.
Rather than having users add liquidity on Uniswap to retrieve the required Liquidity Provider token to stake into the designated pools, we have simplified the entire process and enabled users to get staking started with Single Asset. This means that you’ll only need either Sloth or WBTC for the Sloth-WBTC staking pool to start breeding, lowering the barrier of entry for all.
Why am I not earning $SLOTH for providing liquidity to the ETH-SLOTH Uniswap Pool?
The current strategy focuses on deepening the liquidity across selected tokens to stake, and we’ve chosen to select from the ones with vibrant communities in hopes that they join our effort to breed more Cute Baby Sloths.
When am I getting my $SLOTH staking rewards and why do I have to wait?
Please note that all staking contracts have a time lock of 36 hours and 6% withdrawal loss. $Sloth Rewards are given everyday at UTC±00:00
Why is there a time lock on pulling out my liquidity?
When staking into the Sloth breeding contracts, breeders must be aware of a 36-hour time lock upon initiation. This is in order to help facilitate the necessary stability required by the community and build confidence.
Who is the lead developer? And how do I know this is not another rug-pull?
The team consists of experienced Solidity programmers and veteran blockchain professionals. To ensure the interests of all Sloth breeders involved, a 36 hour time lock has been mandated on the admin keys.
This means that Sloth Master has a 36 hour time lock for any admin interactions with the contract. Sloth breeders will always be well informed in advance and this is verifiable on-chain.
Why is the entire team anonymous? Why are they trustworthy?
Embracing the spirit of DeFi, we should embrace the fact that code is open-sourced and verifiable on Etherscan. In code we trust.
Where can I buy $Sloth?
Sloth can be purchased on Uniswap.
What is the Uniswap token address?
The Uniswap token address is: 0xc09d3dbd8f1c5f70f5a624935dff180af6fb51c7
To view on Etherscan: https://etherscan.io/token/0xc09d3dbd8f1c5f70f5a624935dff180af6fb51c7
Will the price of Sloth go up?
We cannot dispense financial advice, however we share the following: As we attract more Sloth breeders on board, we will have deeper liquidity across the DeFi space and populate more Cute Baby Sloths to this universe.
