What is Tomb Finance (TOMB)?
What is Tomb Finance?
Tomb Finance is a decentralized finance platform that uses the Fantom blockchain network. It stands out due to its main product, which is an algorithmic stablecoin named TOMB. The unique feature of TOMB stablecoin is that, unlike other algorithmic tokens pegged to a fiat currency, it is pegged to the price of a cryptocurrency, i.e., FTM token.
The problem with previous algorithmic tokens was that they all suffered from a lack of use cases, failing to create a consistent demand in the market. However, Tomb Finance hopes to solve this issue by providing liquidity to the Fantom network, using the mirrored token of FTM.
The need for a mirrored token of the crypto exists in the first place due to the limited supply of FTM. Although the maximum supply of the token is capped at 3,175,000,000 FTM, to run a validator node, participants need at least 500,000 tokens. As a result, FTM will become increasingly scarce in the future as the network expands and becomes more decentralized. Since most of the supply would be locked to run validator nodes, only a small fraction will be left for other on-chain activities.
Tomb Finance aims to make the TOMB token the main medium of exchange on the Fantom Opera network when such a situation occurs in the future.
In the past year, we have seen exponential growth and development in decentralized finance (DeFi) and decentralized autonomous organizations (DAO). Thanks to the advancements and growing relevance of blockchain technology in different industries, the number of decentralized protocol platforms is also on the rise.
In recent months, Tomb Finance – a DeFi protocol built on the Fantom Opera network – has received quite a lot of attention in the crypto space. This article will dive deep into the project and explore everything you need to know about it.
The Core Team behind the Project
After a recent exploit, in September 2021, Harry Yeh and his team took over the Tomb Finance project. Harry Yeh is the founder and managing partner of Quantum Fintech Group – one of the most popular and trusted hedge funds for high-net-worth investors. Moreover, he has also played a pivotal role in the development of several crypto trading businesses, headed many hedge fund companies, and invested in multiple crypto projects.
Under Harry’s professional management, the project has undergone drastic improvements. Before that, the DAO was struggling to survive, trying to maintain its peg until the next epoch. However, now the project’s roadmap has moved from “the next 24 hours” to “the next five years.” Apart from that, the team is also working to secure partnerships with different DeFi projects in the Fantom ecosystem and convince them to integrate the TOMB tokens into their model.
What Blockchain Tomb Finance Uses?
As mentioned before, the Tomb Finance DAO is built on the Fantom distributed ledger. Fantom is a layer 1 decentralized distributed ledger. It is a smart contracts compatible chain, which means that programmers can develop applications on its platform.
Interestingly, Fantom is also compatible with EVM (Ethereum Virtual Machine), which enables decentralized applications built on either ecosystem to port from one blockchain over to the other. This characteristic gives Fantom wider exposure to the crypto industry than some of its competitors, such as Solana.
How does Tomb Finance Work?
Though the primary currency of Tomb Finance is the TOMB token, the platform actually includes three tokens in total, and each is crucial for the optimal working of the DAO.
TOMB tokens are used as the primary medium of exchange for the platform and you can sell TOMB for other tokens on TombSwap – for example. TOMB is an algorithmic token pegged to FTM on Fantom by seigniorage in a way that the TOMB price is always worth the same as 1 FTM – . The TOMB token has an unlimited market cap and can be staked. For example, you can stake your TOMB tokens to earn TSHARE.
Tomb Shares (TSHARE) token performs two essential functions in the Tomb Finance mechanism. Firstly, it acts as a governance currency, giving all TSHARE holders the right to vote on improvement proposals. Furthermore, it is also used to measure the Tomb Protocol value. Tomb Shares tokens are printed when there is an expansion phase, i.e., when the Time Weighted Average Price (TWAP) of 1 TOMB > 1 FTM.
Tomb Bonds (TBOND) are used to stabilize the TOMB token price when it falls below 1 FTM. When the TWAP of 1 TOMB falls below 1 FTM (1 TOMB < 1 FTM), holders are allowed to purchase TBOND at a discounted price. When TOMB’s price rises, you can then redeem TBOND tokens for it.
Tomb Finance provides a few more products which are discussed next.
Cemetery allows users to stake liquidity providers (LP). In return, the protocol rewards them with TSHARE tokens. Originally, the platform offered two liquidity pools: TOMB/FTM and TSHARE/FTM. However, the recently launched Cemetery V2 provides users with more pool options. Newly deployed pools include TBOND/TOMB, FTM/LSHARE, TOMB/LSHARE, LIF3/LSHARE, and TSHARE/TOMB.
This is where new TOMB tokens are minted. New tokens are received after the completion of each epoch, which currently takes about 6 hours. The number of TOMBs being minted ultimately depends on the circulating supply at that time. Holders can stake TSHARE for 6 hours to earn TOMB tokens. However, the newly minted TOMB rewards can only be claimed after at least three epoch durations.
Pit is where the price of TOMB token is maintained stably and pegged to FTM. You can purchase TBOND when the price of 1 TOMB falls below 1 FTM and sell it for TOMB when the TWAP exceeds 1 FTM. The reward will be greater with a higher TOMB token Time Weighted Average Price (TWAP) value.
SBS allows the platform users to swap TBOND and TSHARE.
Users can provide liquidity for the TOMB/FTM pair directly on Tomb Finance or Spookyswap without paying any tax.
Here, users can review all details about every epoch that has been completed on the Tomb Finance platform, including the Masonry funding, Dao funding, Dev funding, and more. Moreover, you can also find news or updates regarding the platform’s future.
Is TOMB a Good Investment?
Most blockchain-based projects in the DeFi space are trying to do too much all at once, which leads to most of them failing to achieve anything substantial. However, Tomb Finance is focused on just one goal and has a determined route to reach it. After Harry’s adoption, many people who left the platform are returning to it. Especially after the recent Tomb forks: 20MB and 30MB, the project has created a significant buzz in the crypto space. As far as the price is concerned, the token will follow FTM’s price and circulating supply. A boost in FTM’s price, therefore, will result in profits for all the TOMB holders.
Readers must note that cryptocurrencies and virtual assets are considered a high-risk investment sector. That’s why it is recommended to do your own research and not make any investment decision before consulting a professional financial advisor.
Most frequent questions and answers
Yes, TOMB is an algorithmic stablecoin whose value is pegged to the FTM token. It was the first algorithmic token ever created on a blockchain.
Currently, an epoch takes up to 6 hours to complete. After completion, the stakers receive rewards in the form of TOMB tokens.
The annual percentage rate (APR) changes from time to time as it depends on a series of factors, including the TOMB’s price, TSHARE’s price, and staked amount.
Transfer some FTM tokens to your Metamask wallet and visit Tomb Finance’s official website. Now click on the Swap icon and enter the number of FTM tokens you wish to swap for TOMB coins. After entering, proceed with the transaction, and wait for it to complete.
Tomb finance is a decentralized multi-token protocol powered by Fantom, which brings massive liquidity to the Fantom ecosystem.
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