Disclaimer: This post is still in draft mode. Also, the dev plan with this idea might’ve been changed during the time these concepts were released. These writings are meant to be a rehash of public material updated to the latest public updates. This info might change in the future.
Link to 101 CORE Fundamentals:
ERC-95: A New CORE Standard
Last updated: Dec 2 2022
The ERC-20 token standard is considered to be a static token that relies on external price oracles that can be sources of malicious attacks and exploits. That is why CORE ERC-95 instead is a smarter token standard that relies on complex networking effects to secure its ecosystem and continuously increase the security within the system.
The CORE Ecosystem does not rely on off-chain price oracles but instead relies on its ability to collect volume information via the Fee of Transfer. The FoT is much more than a redistribution of funds: it is volume precisely recorded in every transaction (on-chain). This in effect makes faking this information incredibly expensive and CORE achieves this level of security without the use or need of any external oracle source.
Another mechanic securing the entire system is the ever-rising price floor which is created due to CORE fundamentals such as permanently locked liquidity, capped supply, and FoT. If the locked liquidity inside the ecosystem increases so does the floor price which also increases the difficulty and price to exploit the system. Every transaction in CORE incurs a fee which slowly and gradually raises the amount of locked liquidity inside its whole ecosystem.
While the CORE token has a limited cap supply of 10k, it has the possibility to mint new kinds of tokens inside the ecosystem which are CORE Liquidity Tokens (LP Tokens). These LP tokens contain the synthetic asset equivalent which converts assets into wrapped CORE assets, for example, wBTC into coreBTC. These wrapped assets are then deposited into liquidity pools along with core-wrapped CORE (cCORE). Synthetic/wrapped assets in CORE can also be wrapped into percentages (25%ETH / 50%BTC/25%DAI for example) which can further increase arbitrage possibilities.
Trading synthetic assets in the CORE ecosystem forces arbitrage from the LP-Token pairs going to the CORE token. This makes CORE act as a price oracle by reporting and keeping track of volume statistics directly on-chain without the use of a price oracle. This information can be used to assess risk between pairs which in turn influences vault yield strategies’ performance and accuracy.
Every time an asset is wrapped with ERC95 a Prime is created which can track volume and collect rich data on price movements. This can be used to create “greeks” for setting up automated options markets that are too expensive to manipulate. The ERC95 standard takes advantage of the movement of other coins by mirroring their price movements and allowing the ecosystem to benefit from the volatility and volume created by the networking effects.
References:
ERC95: A New Standard: ERC95: A New Standard. Growing CORE’s Ecosystem by Innovation | by 0xdec4f | CORE Vault | Medium
CORE Floor Price and Lending: CORE: Floor Price and Lending. With coreDEX: Lending releasing later… | by 0xdec4f | CORE Vault | Medium
CORE: The Gateway to Limitless Growth: CORE: The Gateway to Limitless Growth | by 0xdec4f | CORE Vault | Medium
FAQ
Where does coreDAO fall in the ERC-95 complex? What about Delta and rLP?
This is a hard question to answer because of the limited information we have about coreDEX and what the next updates for core mean for its ecosystem but this should give you an idea.
Version 1 CORE LPs were converted into coreDAO and this allowed the FoT to be rerouted to a single token rather than separately by each individual pool. Back in V1 during the LGEs, the CORE’s fee of transfer was routed into three separate pools and this was inefficient. The creation of coreDAO allowed developers to stream all FoT into a single token creating a robust governance token that has many benefits besides voting power. Furthermore this makes it easier to make products for coreDAO such as cLEND.
Delta & rLP were made to empower a platform that has weekly options. Delta in this case represents the option based on its two week vesting schedule and rLP represents the liquidity to power the options. It is speculated that these two tokens will play a big role in the Primes created by ERC-95.
CORE Router
Warning: The CORE Router was released for the first version of CORE. Currently it is under active development and it is not recommended to interact with the Router contracts. Stay up to date with dev changes by following the official twitter & medium accounts.
The CORE Router is a set of contracts that allow you to connect your liquidity into the internet of the CORE Ecosystem. There are four intended functions of the router: zapper, swapper, wrapper, & flash arbitrage.
The zapper converts your ETH into LP tokens which was mainly used for the first version of CORE but worth mentioning because it also prevented being front run by liquidity bots. The swap system was never released but intended to be easy swaps between different tokens. The wrapper allows you to wrap to and from ERC-95, so wBTC into cBTC. This function was used to migrate V1 CORE LPs into coreDAO vouchers. The flash arbitrage suite deserves its own section and is the most complex out of all the router functions.
CORE Flash Arbitrage Suite
The CORE Flash Arbitrage suite is composed of two important principles: arbitrage & flash swaps.
Arbitrage refers to the low risk opportunity to profit from price discrepancies of assets in different markets. If one asset is traded in two or more markets anyone can profit if assets are traded at different prices. Furthermore, this process can be automated with trading systems that rely on algortihms that can spot these price discrepancy before the market can react.
Flash swaps allows users to take out a loan from any liquidity pool without any cost with the condition that it is returned at the end of the transaction. If you are unable to meet these conditions the flash swap transaction will be canceled.
The CORE Flash Arbitrage suite combines flash swaps with the low risk opportunity of arbitrage to increase its own liquidity and APY.
Specifically the Flash Arbitrage Suite consists of 3 contracts: Arbitrage Executor, Arbitrage Controller, and the Core Buyer Contract.
- The Arbitrage Executor (arb.exe for short) is a closed source contract that calculates scenarios and executes trades.
- The Arbitrage Controller (arb.ctrl for short) interacts with the arb.exe by calling it, adding strategies and split profits between the Caller and the CORE Buyer Contract.
- The Core Buyer Contract (buyer.ctrl) turns the arbitrage profits into CORE and transfers them directly to farmers.
The arb.exe does not hold any tokens but only swaps them in the most optimal gas efficient way.
The arb.ctrl can bypass the Fee of Transfer of CORE in case of the unlikely scenario that the arbitrage strategy requires it and has two different fee distribution depending on whether or not the FoT is active or not.
Strategies that are outside of the CORE Ecosystem can be used and this in fact these strategies have a higher reward for callers. These contracts are open and available for any to add complex strategies using CORE liquidity to arbitrage opportunities.
The contracts are made to keep specific CORE pools at a designated APY or to add liquidity to CORE and burn the corresponding LP tokens. Due to CORE’s unique ecosystem the Flash Arbitrage Suit directly contribute to the Total Value Permanently Locked (TVPL).
References:
Introducing CORE Router v1.0: Introducing CORE Router v1.0. simplified user experience | by 0xdec4f | Medium
Spotlight: Flash Arbitrage: Spotlight: Flash Arbitrage. Flash Arbitrage is build to bring a… | by 0xdec4f | CORE Vault | Medium