It is a crypto that provided some excitement when it came onto the market at the end of 2021, but what is tectonic (TONIC)?
Let’s see what we can find out, and also take a look at some of the tectonic price predictions that were doing the rounds as of 5 January 2023.
Tectonic Explained
Decentralised finance (DeFi) protocol Tectonic launched its mainnet on 23 December 2021. The protocol aims to provide cross-chain decentralised money market services, offering users the ability to earn passive income on their funds or borrow money against their assets instantly.
Savers’ deposits provide the liquidity for lending to borrowers at variable interest rates. Tectonic’s smart contract algorithm, based on computer programs which automatically execute once certain conditions are met, determines interest rates based on supply and demand for assets. Depositors can generate passive yield, or interest, with no lock-up period to withdraw earnings.
“Residing along the crusts of two crypto supercontinents, Tectonic will be a cross-chain money market at the heart of Cosmos and Ethereum, empowering users to earn passive yields on their Cosmos and Ethereum-based assets, and to get access to instant crypto-backed loans,” noted the Tectonic blog.
“While DeFi money markets on Ethereum have managed to achieve massive traction, the network has been constantly constrained by high levels of congestion which results in extremely high network fees and slow transaction speeds. The democratisation of finance requires a network that can handle high scale at low cost. Cronos’ average gas fee is estimated to be less than $0.10 for simple transactions, while the network itself can handle more than thousands of transactions per block.”
It added: “Interoperability will be at the core of Tectonic. Apart from having Ethereum (ETH)-based assets on Tectonic, Cronos, being IBC-enabled, will allow us to facilitate the lending and borrowing of any Cosmos (ATOM)-based assets. This enables us to fulfil our vision of being the cross-chain money market between EVM chains and the Cosmos ecosystem.”
Tectonic is on the Cronos blockchain, and aims to facilitate lending and borrowing across different blockchains. Cronos uses inter-blockchain communication (IBC) to help the Ethereum and Cosmos blockchains work together.
TONIC is the protocol’s native cryptocurrency token. It’s used for participating in governance and staking in the Community Insurance Pool to earn rewards in exchange for helping make Tectonic secure.
Tectonic was created by Particle B, a blockchain-based incubator founded by former Crypto.com CTO Gary Or.
It is important to note that, because TONIC is based on the Cronos blockchain it is, technically speaking, a token, rather than a coin. You might see references to such things as ‘the TONIC coin’ or a ‘Tectonic coin price prediction’, but these are not strictly correct.
TONIC Token Release Schedule
The token was distributed as follows:
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23% to the development team (vesting over four years, daily release);
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0.1% for airdrop;
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13% for an ecosystem reserve for sponsoring partner development projects, funding community initiatives and paying advisers (only used as needed);
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13% for network security and maintenance such as auditing, protocol operations, infrastructure upgrade, liquidity reserve (fully unlocked at launch);
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50.9% for community incentives for participating in liquidity mining/staking rewards, including third-party protocols such as yield farming and mining on decentralised exchanges (DEXs).
Tectonic Introduces Staking
One of the biggest pieces of Tectonic news came on 11 March 2022, when token staking went live. This enabled holders to deposit their tokens into the staking module in return for yield, including a share of the revenue generated from the fees that borrowers pay for their loans.
Staking is a separate feature from the TONIC money market. TONIC holders that were included in a wallet snapshot in January were eligible for an airdrop of tokens that they could also add to the staking pool.
For more detailed analysis and future predictions, you can visit Capital.com.
