101 CORE Knowledge Base: Fundamentals

Development & Technical Discussion
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Authors & Contributors: @0xdec4f @iamcapote @Francis @justT2s @wuuuuup

Disclaimer: What is described here can change at any time. Please be diligent when conducting your own research and keeping up with the project.

CORE Finance

CORE Finance is a deflationary farming protocol rooted on token trading, staking, lending and governance.

CORE Finance products aim to reward users from a growing number of high yield generating strategies and finance products.

You can find the CORE website over at corefinance.eth/

References

CORE

The CORE token powers the entire ecosystem.

CORE has a limited supply of 10,000 tokens. This limit causes actions inside the ecosystem to have a deflationary effect on the supply of the token and in turn affect the entire network. Additionally, the protocol has burned more than 80% of the total supply bringing the circulating supply close to ~1602 tokens.

The ecosystem is built in such a way that every token transfer incurs a 1% Fee of Transfer (FoT). FoT is a mechanism by which every time a token is moved from one address to another, a percentage from the tokens (FoT) is directed to the protocol. This FoT is split between two agents of the system: 93% of this fee goes to the staked coreDAO holders and 7% goes to the protocol-owned treasury.

Automated Market Makers (AMM) like Uniswap that take a 0.3% trading fee for LP holders along with the FoT increase the Total Value Permanently Locked (TVPL) of the entire system.

Furthermore the liquidity of the ecosystem is permanently locked meaning that liquidity pool tokens cannot be broken into their underlying tokens. Locked liquidity empowers CORE to have a floor price, which enables lending and other products. The floor price of a token is a minimum amount of DAI that this token can be redeem for at any time (e.g., one Core token is redeemable for its floor value via cLend at any time). Users can decide to loan out their CORE for DAI with the option of paying it back or running the risk of liquidation which burns their collateral. Different types of collateral are open for addition by DAO governance proposals.

The architecture of the CORE network creates several compounding loops inside its ecosystem that directly affect the valuation of the whole ecosystem.

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coreDAO Tokens

coreDAO is the governance token of the CORE ecosystem. It combines a multitude of functions for its holders, including farming, governance and lending.

coreDAO tokens can be staked in the vault in order to farm CORE. Each CORE traded incurs a Fee-of-Transfer (FoT) of 1% that is transferred to coreDAO staked in the vault. The staking contracts are built intelligently to save gas and every time coreDAO is unstaked you claim your rewards automatically.

CORE Finance aims to become a self-sustaining project with an emphasis on decentralization and community thus coreDAO holders can participate in on-chain votes on platform decisions. They can vote on CORE Improvement Proposals (CIP) and direct the future of the platform. On the other hand, users that have active loans in coreDAO cannot participate in governance.

Initially, locked liquidity was gathered through Liquidity Generation Events (LGEs) that minted LP tokens composed of CORE paired with ETH, BTC, and DAI. This liquidity was eventually converted into DAI and CORE pairs to form coreDAO. This conversion along with locked liquidity allows coreDAO to have a loan value in DAI just like with CORE.

Normally, LP tokens provide liquidity which can be removed at any time. Tokens like coreDAO are much more than that because they validate locked liquidity that cannot be removed and at the same time are rewarded with farming, lending and governance.

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CORE Lend

CORE Lend, also known as cLend, is a novel product that adds lending against coreDAO and CORE tokens. Both tokens can be used as collateral in cLend with a value of 1 DAI per coreDAO and 5,500 DAI for CORE.

Contrary to other products there is no liquidation risk from price movement of the underlying collateral. In other words, price fluctuations in the tokens will not cause liquidations. The liquidations are caused by interest. Currently there is a 20% yearly interest rate and a liquidation threshold of 110% on your loans. This means that in order to avoid liquidating your loan position, you need to repay the interest before the loan accrues the amount in the liquidation threshold.

Loans are possible thanks to locked liquidity and the price floor that it creates for the tokens. Transferring the liquidity from the three initial LP pools into coreDAO caused a lot of CORE to be put out of circulation and brought the total circulating supply closer to 1602 tokens. This in turn caused around 50,000,000 DAI to be left in the pool, which formed our Total Value Permanently Locked (TVPL). This means that coreDAO is backed by 4 DAI in the cLend pool of which only 1 DAI is available for loans. These values in DAI do not represent the market value of each asset but tell us what value contributes to the floor price of CORE and the amount available to be lent out.

You can find the website for cLend over at beta.corefinance.eth

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coreDEX: The Future

DISCLAIMER: This section can change at any time due to changes in the protocol structure. This section paints a broad picture of the initial vision for CORE Finance and is not to be considered as a binding roadmap.

CORE Finance is developing coreDEX which is a next-generation Automated Market Maker (AMM) which relies on Future LP tokens and more innovative solutions. This product aims to create a market inside of CORE under which users can buy and trade their upside from farming.

In order to create a premium product new ways of collecting and processing data were needed so CORE made a token standard that surpasses the capabilities of the ERC-20. Analyzing the ERC-20 standard, revealed its deficiency to collect information thus we improved on this by creating the ERC-95. The newly developed ERC-95 standard proposal allows wrapped tokens to keep track of volume adjusted pricing, on chain. The major difference between CORE and other token standards lies in the fact that this system collects data live from the blockchain that is trustless because of the incredible cost that manipulation implies.

The competitive landscape heavily relies on centralized oracles to provide data about liquidity and volume creating a gap that is inefficient, can be susceptible to exploitation and prone to error. The goal is to establish an environment rich in information which can be used to react to different market changes and power the future decentralized on-chain economy.

CORE is well positioned to adopt and improve on all other yield generating mechanisms in DeFi with on-chain data-supremacy, and with the feedback loops & networking effects of our ecosystem.

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More Products

Liquidity Generation Events

Liquidity Generation Events (LGEs) were how the original CORE team kickstarted the initial distribution of the CORE Token and the locked liquidity that powers the entire CORE Finance ecosystem.

LGEs are a fair way to distribute a token and provide liquidity without giving developer bonuses or shares.

An LGE uses a smart contract which collects a variety of tokens during a determined period. After the timer is over the contract uses the collected funds to create a new liquidity pool. Participants who contributed tokens to the LGE smart contract will receive LP tokens after the LGE event is over.

Contributing funds to an LGE gives participants the ability to receive discounted LP tokens for the reason that they are all created at the same time. During this event the price per LP token does not scale. It is even for all contributors. After the event is over the price will scale along with the pool, meaning it will become increasingly expensive for each new minted LP token.

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Fanny

FANNY, is a dynamically priced merchandise token which can be redeemed for a real limited edition fanny pack.

A total of 300 FANNY tokens were minted, each representing one real life limited-edition Fanny Pack. 25 Fanny tokens were airdropped to selected contributors and early supporters of the ecosystem. 100 FANNY tokens can be farmed for 30 days by staking CORE on our platform. Additionally, farmers could increase their yield by locking up CORE for a specific amount of time or burning it. The remaining 175 FANNY tokens will be deposited into a Uniswap liquidity pool together with CORE. The price of the merchandise is dictated by supply and demand of the pool.

This product allowed not only a merchandise token but paved the way for more innovative products in the network.

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Delta & rLP

NOTE: Do not modify section until more information is released on the Delta Finance project.

Delta and rLP are products in the CORE ecosystem that seek to create a new form of partially locked liquidity that can be used for options and derivatives markets. The system requires the right incentives to promote the creation of Open Vesting Liquidity (OVL) through token transfers.

As it’s well known, CORE has Locked Liquidity. While this type of liquidity is very valuable, because it provides a stable and hard-to-manipulate market, it is a lot harder to incentivise liquidity providers as they cannot withdraw their capital. In other words, locked liquidity is hard to collect. CORE has brought a good amount of liquidity to the system already, but to scale that further with only locked liquidity is not optimal. Additionally, while locked liquidity is perfectly suitable for perpetuals, non-perpetual options can be implemented more efficiently on top of a vesting schedule. This is where Open Vested Liquidity (OVL) comes into play.

Delta has a vesting mechanism built into its token that is triggered on transfer. This vesting period is based on a block number schedule and when a transfer occurs, 10% of Delta is unlocked while 90% remains locked, slowly vesting over time.

The main principles of Delta’s Vesting schedule are the following:

  • Delta transfers start a 14 Day vesting schedule;
  • Delta that is claimed from farming starts a 365 Day vesting schedule;
  • Delta transferred during an active vesting schedule cancels that vesting schedule and causes a forfeit on the remaining unmatured Delta; and,
  • Locked Delta from interrupted vesting schedules get distributed to the Deep Farming Vault (DFV).

The Deep Farming Vault generates and distributes yield to staked rLP & Delta tokens. The two tokens work together inside the system to achieve Delta’s OVL. The Delta token, which creates vesting schedules upon transfer and the rLP token which secures the infrastructure through the locking of assets.

Furthermore, 20% of the DELTA tokens collected from immature vestings are sold on the market for ETH. A 25% share of the collected ETH is utilized to buy CORE from the market and pay it out to CORE LP farmers. This results in 5% of the total funds from interrupted vesting directly contributing to the CORE system, benefiting everyone involved by increasing CORE’s price, increasing CORE LP’s APY and increasing its Total Value Permanently Locked (TVPL).

rLP tokens have a special attribute of periodically rebasing its underlying liquidity and therefore increasing their mint price exponentially. Liquidity rebasing will continue to increase the minting price by 10% each day. As a result, the price of minting new rLP tokens becomes increasingly expensive to the point where they are unobtainable outside of secondary markets.

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FAQ

What makes the CORE token different?

Most projects in the DeFi space rely on highly inflationary farming processes to create the impression of yield generation, with usually devastating long term price effects. The CORE team has pioneered a combination of permanently locked liquidity, fixed token supply and a fee on token transfers which is redistributed among coreDAO stakers, in order to create a unique sustainable deflationary yield farming process. The locked liquidity and impossibility to mint new tokens furthermore ensure that the CORE token has a rising price floor.

What is the supply of the CORE token?

CORE was created with a maximum supply of 10,000 tokens and there is absolutely no way to create new CORE tokens.

Following the 8300 CORE burn which preceded the launch of cLEND, and the ~98 CORE which was burnt to mine Fanny, there are currently ~1602 CORE tokens in circulation (subject to further burn mechanisms).

The exact amount of CORE burnt is tracked on corecharts.info.

Where can I buy CORE?

You can currently buy CORE on Uniswap.

Make sure to check out CORE on Coingecko or Coinmarketcap to find the correct trading pair.

How do we farm CORE when it’s deflationary ?

Every transfer and trade of CORE is subject to a 1% fee, which goes inside the COREVault contract and is farmable. These fees will be distributed to coreDAO stakers therefore providing rewards without inflation.

Will we be able to farm CORE with tokens other than coreDAO?

The community governance will have to decide on future pools. Based on yield farming strategies it is in their interest to do so. As soon as governance launches there will be proposals to vote on (including by the CORE team).

At which rate were CORE LPs converted to coreDAO?

The conversion rates were as follows:

  • LP1 (CORE-ETH): 2350 coreDAO
  • cmLP2 (CORE-BTC): 9250 coreDAO
  • LP3 (CORE-DAI): 45 coreDAO

Can I unstake my coreDAO tokens?

Yes, you are free to move your coreDAO tokens around as you wish. Staking and unstaking is possible on the corefinance.eth/ website under the “Farm” tab.

Why did claimable CORE balance disappear after staking new coreDAO tokens in the vault?

All staking actions auto-harvest any pending CORE rewards. Check your wallet to verify the CORE is there.

What is the price floor of CORE?

Due to CORE’s fundamentals, i.e. permanently locked liquidity and impossibility to mint new tokens, the CORE token has a price floor.

Following the launch of cLEND, CORE has a price floor in form of a 5500 DAI loan that can be taken per 1 CORE.

What are the incentives of the CORE team?

Initially there is a 1% fee on token transfers, with 7% of the fees accumulated being used as a dev fee. The remaining 93% get distributed to the staked coreDAO.

What are the advantages of cLend over other lending protocols?

The following table depicts the main differences between different products in the lending space compared with CORE Lend.

On-chain Collateral is risk-free
from price movement
Mortgages in TradFi No No
Loans in TradFi No Yes
Regular Loans in DeFi
(Aave, Compound, Cream…) Yes No
CORE Lend Yes Yes

The first column (i.e., On-Chain) in the table is whatever they are on-chain or off-chain lending options. The second column (i.e., Risk-Free collateral) is the product has no liquidation risk from price movement of the underlying collateral.

CORE Lending is able to achieve this through the design of the ecosystem and its networking effects. The floor price and locked liquidity features are an essential component to achieve all of this.

CORE Bug Bounty Program

We call on our community and all bug bounty hunters to help identify bugs in our ecosystem. CORE recognizes the importance and value of security researchers’ efforts in helping keep our community safe. Our Bug Bounty Program rewards members of the community for helping us find and address significant bugs. Earn rewards for finding a vulnerability and get recognized on our leaderboard.

Rules:

Responsible investigation and reporting include, but is not limited to, the following:

  • Do not violate the privacy of other users, destroy data, or disrupt our services
  • Do not target our physical security measures, or attempt to use social engineering, spam, distributed denial of service (DDOS) attacks, etc.
  • Initially report the bug only to us and not to anyone else.
  • Public disclosure of a vulnerability would make it ineligible for a reward
  • Provide us a reasonable amount of time to fix a vulnerability prior to sharing details of the vulnerability with any other party
  • Rewards will be decided on a case by case basis at the sole discretion of the CORE team.
  • Issues that have already been submitted by another user or are already known to the CORE team are not eligible for bounty rewards

Bounty Scope

The CORE Bug Bounty Program covers security issues identified in the following repository:

GitHub

cVault-finance

cVault-finance has 8 repositories available. Follow their code on GitHub.

Vulnerabilities Classification

CORE awards bounties based on severity of the vulnerability. The severity is determined by the impact and exploitability of a bug.

Impact describes the extent of a successful exploitation on CORE’s ecosystem. Exploitability describes the difficulty to perform the vulnerability. The Severity is a combination of the Impact & Exploitability. We use the Severity of a report to place the report into the appropriate tier.

Decisions on the eligibility and size of the reward are guided by the points below, but are, in the end, determined at the sole discretion of the CORE team.

SEVERITY TIER:

  • Critical: up to $50,000
  • High: up to $25,000
  • Medium: up to $10,000
  • Low: up to $2,000

Every bounty is allocated points which accumulate over the course of the program. Based on total points, participants may be recognized in our Leaderboard.

Other considerations:

In addition to our Severity tier, we also consider other variables when evaluating the eligibility and size of a bounty.

  • Quality of Description: well-written and clearly structured reports receive higher rewards
  • Reproducibility: Please describe your claim in as much detail as possible. The easier it is for us to reproduce and verify the claim, the higher the reward
  • Suggestion of Fix: We pay higher rewards to submissions with clear descriptions of how to fix the issue.

Submission process:

  • Responsible disclosure can be made by emailing dev@cvault.finance
  • Try to include as many details as possible about the vulnerability, potential impact, steps for reproducing it as well as possible fixes
  • Please allow 2 days for us to respond before sending another email.

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