Hoo Research | Coin Wave Production — Swivel Finance

2 min readDec 29, 2021

A decentralized protocol for fixed-rate loan and tokenized yields — Swivel Finance.

Project introduction:

1. Fixed loan and prospective earnings pack the generation protocol. Then, earnings will be automatically granted according to the protocol of the settlement date.

2. After users deposit borrowing, the protocol will generate ZcTokens(initial deposits) and nTokens(prospective earnings).

3. Loaners can sell their nTokens at Swivel exchange to lock fixed premium and gain fixed earnings immediately.

4. Loaners and traders can purchase nTokens at Swivel exchange to increase their opening for future earnings. Interests can be redeemed at any time.

Fixed loan rate

Alice deposits 1000USDC.

Alice accepts Bob’s order. Swivel protocol divides 1000USDC into 1000zcUSDC and 1000nUSDC.

Alice sells 1000nUSDC to Bob at the price of 50USDC.

Alice still holds 1000 zcUSDC. On settlement date, Alice can convert 1000zcUSDC into USDC at the ratio of 1:1.

zcUSDC and nUSDC distributed by the protocol can be freely traded at Swivel exchange. Users can withdraw capital at any time.

Liquidity incentive

Swivel is the first protocol based on the order book. The baseline of liquidity incentive is established in token distribution and protocol design.

Under the background of AMM, liquidity incentive is straightforward. Users that provide gathering liquidity on the constant x*y=k curve can award in proportion according to liquidity provided.

The traditional AMA mechanism incentive has a great risk so that market traders face huge risks. Swivel can adjust quotation for market traders(liquidity providers) according to the order book protocol and enhance capital circulation efficiency.

Investment institution