UpTokens by Rootkit Finance can Reuse Liquidity and Secure Minimum Token Price
Opinions

UpTokens by Rootkit Finance can Reuse Liquidity and Secure Minimum Token Price

John Williams
John Williams

The Decentralized Finance (DeFi) sector has brought new ability into the crypto industry — to invest in various tokens belonging to the sector and receive passive income.

However, this is only one, albeit the most popular, a feature of the sector. DeFi has also unlocked additional value in crypto by enabling other separate projects to be utilized on other blockchains.

For example, Bitcoin has taken crypto into the mainstream. . It is so popular that it even brought institutional investors into crypto, and its price skyrocketed to $64.8k earlier this year. Yet Bitcoin’s blockchain is just a distributed ledger — a list of transactions, and there is nothing more that it can do.

DeFi unlocked additional utility for Bitcoin by allowing users to export Bitcoin to other blockchains, such as Ethereum, for use in smart contracts, dApps, DEXes, yield farming platforms, and more. This was done through the concept of wrapped tokens and as of June 2021, around 1% of Bitcoin’s circulating supply has been wrapped on Ethereum.

Like other novel applications in crypto, the mechanisms behind token wrapping can be further expanded and improved, which is what the project called Rootkit Finance decided to do--achieving remarkable results along the way.

What You Need to Know About Rootkit Finance

Rootkit is a DeFi protocol that offers a highly deflationary yield-farming token which uses permanently locked liquidity pools. This is actually what enabled all the new possibilities that come with this project.

Essentially, Rootkit used a combination of different technologies to create something new. This tech cocktail includes a fixed-supply currency, permanently locked liquidity pools, and a decentralized exchange’s own pricing mechanism. Combining all three, the project created a price floor, which means that the token has a guaranteed minimum price if all holders sell, which will act permanently as its bottom. In other words, it will never drop below this price.

This, in turn, allows the project to keep reusing the liquidity locked in its system, which will also allow exploring new areas beyond the expected norms of traditional economics.

Rootkit’s Unique Features

Rootkit was able to bring several unique features to DeFi. The first was its innovative protocol launch, the LGE (Liquidity Generation Event). Rootkit paid special attention to the design of its launch, wanting it to be as fair as possible to all participants. First, there was a one-week Ethereum deposit period, after which the project used the funds for pairing, with the full supply of Rootkit being used to create the first Uniswap pool.

Once again — the project created the liquidity pool with the total supply locked inside of it, which means that it starts at the lowest price that can ever be reached. While the bottom secured, the project was able to reuse some Ethereum coins without affecting the Uniswap market. It did this to create more trading pools, and it also purchased some ROOT tokens from the pool for the purpose of distributing them to LP tokens.

The second unique mechanism is its Transfer gate. The Rootkit Uniswap pair uses kETH,  which is actually a wrapped version of wETH. The creation process is free, and the only thing that people will need to pay are the gas fees associated with the event.

The Transfer Gate comes into play as it can be used to add liquidity quickly and safely, as well as redistribute liquidity so it can be reused over and over for whatever the protocol calls for -- whether that’s staking rewards, or increasing the value of the token.

Thirdly there is the price floor. Rootkit can increase its price by actively using and reusing its own Ethereum liquidity through kETH and the transfer gate. This trading liquidity can never be removed, and since it is a fixed-supply token, reusing liquidity creates a minimum price that the token can ever have.

Rootkit goes beyond all of these features to provide an optimal user experience. Its UpTokens - tracked on UpMarketCap.com to monitor performance against their pair - enable buybacks for each token pairs. The upFund serves as a control panel to bring Root DAO access to new disruptive finance mechanisms. Additionally, there’s the NFT system that lets users upgrade common non-fungible tokens to a SuperCharged version via a Forging contract.

Rootkit has packaged all of these features into a revolutionary and entirely new protocol called ERC-31337.  It has already added three different tokens with this unique mechanism to its ecosystem — ROOT on Ethereum, UpBNB on Binance Smart Chain, and UpTether on Polygon. Its goal is to eventually have 900 different UpTokens, and the next step towards achieving this goal is adding UpMatic and UpCake, which are expected to come very soon. In an effort to create a 1:1 match of CoinMarketCap through its UpTokens, the Rootkit team have created their own index, UpMarketCap.com, where UpTokens are listed.

And with the new features and ways to optimize liquidity provided with Uniswap v3, the team will be looking to push their innovations to the limit and unlock value like DeFi has never seen.