Concepts

We list here the concepts that underly the Crayon Protocol.

Desks

At the center of the Crayon Protocol are the desks. A desk is specified by:

  • The base coin: This is the ERC20 token that lenders can deposit and traders/borrowers can borrow from the desk.

  • A number of approved ERC20 tokens that can be posted as collateral to secure loans or leveraged positions.

  • The control contract: This is the Control smart contract that manages awards of the reward token.

  • The ratio of values to loans: This is the minimum ratio of collateral to loan values, both expressed in a common numeraire, below which a loan is subject to liquidation.

  • The fee that is charged to flash loans of the base or collateral (longable) tokens. One fee rate is used for all flash loans.

  • The liquidation bonus: This is the additional value in collateral that liquidators obtain for paying a liquidatable part of a loan.

  • The horizons: Loans on the Crayon Protocol are not open-ended. Users choose one of these horizons when borrowing.

  • The borrowing fees that apply to each horizon.

Control

It is planned for the Control smart contract to become the hub of governance exercise. Desks register with the Control smart contract through which some key desk settings (e.g., fees) can be set. Users invoke calls on the Control contract to mint their reward tokens.

XCRAY

The Crayon Protocol token serves currently to incentivize usage of the platform. It is planned for XCRAY to become the governance token of the protocol, at which point, holders of XCRAY will vote to set the fees and XCRAY distribution rates on the different desks. See Governance.

Glossary

  • base token: Also referred to as base coin of the Desk is the token that can be lent out by the desk and is the numeraire for all calculated values.

  • horizon: The horizon of a loan is the number of blocks until the loan expires and must be repaid, extended or liquidated.

  • longable: Tokens that are accepted in a Desk in exchange for loans are called longable tokens in reference to traders/borrowers being long those tokens and short the base token.

  • provider: The Crayon Protocol team will not host a front end. Rather, third parties are incentivized to host interfaces by allowing them to keep a percentage of the reward tokens earned by their users. Some interactions with the Crayon Protocol, such as trade leveraging, require smart contract deployments. Providers are also incentivized to facilitate that.