Introduction
Chilitomb Finance is a multi-token protocol aiming to be the backbone of a rapidly growing ecosystem to bring liquidity and new use cases to the Fantom Network.
Welcome to Chilitomb Finance! If this is your first visit, we ask that you spend some time reading this documentation before using the protocol. This documentation aims to walk you through every step of how to start using Chilitomb Finance to earn steady, high yields that can only be achieved through the power of DeFi, but with the security and stability of exposure to FTM. Let's get started!
Origins
Chilitomb Finance is based upon the work of the brilliant tomb.finance project on the Fantom network. It was a great opportunity to introduce the general public to an incredibly stable and robust DeFi protocol like tomb.finance, with a few interesting twists. At the time of Tomb's conception, it was difficult to believe that nothing comparable could exist on any other networks. We arrived at this point because Fantom Chain (FTM), a network with quick transaction times, low gas costs, and a sizable user base, seemed to be the ideal choice. Without the efforts of the tomb.finance team, this project would undoubtedly not be possible. We want to express our gratitude to them especially because their project was completely open source and developed exceptionally well. Without their efforts, we would not be where we are today.
What's the point?
Ultimately, the purpose of the Chilitomb Finance protocol is to provide the means for its underlying CHILI asset to maintain a value that is algorithmically pegged to the value of TOMB.
So, what good is that? We will explore this idea further throughout this documentation, but for now without getting too technical, this opens up a world of possibilities for existing, long-time FTM holders, people already familiar with DeFi, as well as new users just coming into the space.
FTM transactions are incredibly slow at times, especially during high volume. There are not nearly as many attractive yield earning opportunities in DeFi for people to put their precious FTM to work for them. CHILI, through the Chilitomb Finance protocol, can solve many of these problems and more, generating immense value for our users in the process.
CHILI is the native token of the Chilitomb Finance protocol. The built-in stability mechanisms within the protocol aim to maintain CHILI's peg to 1 TOMB.
Chilitomb Finance protocol tokens
Chilitomb Finance multi-token protocol currently consists of the following three tokens, and each plays a critical role in how the protocol works to maintain peg:
Chilitomb Tokens ($CHILI) - The CHILLI token is designed for use as a medium of exchange, and is intended to have many other use cases as the Chilitomb Finance ecosystem grows. CHILI is algorithmically pegged to 1 TOMB.
Chilitomb Shares ($CSHARE) - CSHARE can be staked in the Boardroom to earn a portion of minted CHILI as rewards to those CHILI holders for investing in the health and stability of the protocol.
Chilitomb Bonds ($CBOND) - CBOND’s main job is to help incentivize and reward users for helping to regain peg during times of supply contraction below peg.
How does it all work?
The Chili Finance protocol works through a synergistic design of unique tokens and mechanisms that create an automatic, self-reinforcing system to help maintain the peg. Each of these tokens and mechanisms will be explained in further detail within this documentation, but for now let's have a look at a brief overview of how it all works:
When CHILI price is over the peg, new CHILIs are minted by the protocol to inflate the supply in an attempt to drive the price down towards the peg. These new CHILIs are allocated to CSHARE holders in the Boardroom, as a reward for their investment and trust in the protocol. This in turn increases the demand for and the value of CSHARE.
When CHILI price is at the peg, no new CHILIs will be minted, keeping the supply fixed during this time. Since there will be no new supply coming in, the peg will be maintained indefinitely at this point unless there is a shift in demand. More buying pressure during this time will push the price back up above the CHILI
When CHILI price drops below the peg, the protocol will begin to mint CBONDs (up to a maximum debt limit). Experienced investors will have the ability to exchange their CHILI for these CBONDs, which they can then redeem for CHILI at a premium above peg in the future. This removes CHILI from the total supply, applying upward pressure on the price towards the peg. Besides this, investors who believe in the protocol's ability to maintain peg can just buy CHILI to essentially purchase TOMB at a discount to the market. Both of these incentives are intended to keep upward pressure on CHILI's price when under the peg so that the peg can be regained over time.
There are so many different ways you can utilize the mechanisms of the Chilliton Finance protocol to earn yield. Pick a strategy that is right for you, based upon your own knowledge and experience. Even the most simple and basic of strategies can earn great returns, but feel free to experiment with more complex strategies as you learn how the protocol works!
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