Whitepaper
Tomo.Finance | TAI Generating System

Introduction

Being inspired by DAI Stablecoin of MakerDAO, Corefy Fintech has developed a Stablecoin System which is TAI on TomoChain. This system allows users to generate TAI using this system by leveraging TomoChain (TOMO) as collateral through unique smart contracts known as Collateralized Debt Position (CDP).

About TomoChain

TomoChain exists as a scalable blockchain-powered via the advanced Proof-of-Stake Voting consensus and is used commercially by global companies. It has a mission to accelerate the worldwide adoption of blockchain technology utilizing empowering today’s applications with technology masking the friction of blockchain while retaining its underlying benefits.

Overview of the TAI Stablecoin System

Popular digital assets such as Bitcoin (BTC) and Ether (ETH) are too volatile to be used as everyday currency. The value of a bitcoin often experiences large fluctuations, rising or falling by as much as 25% in a single day and occasionally rising over 300% in a month.
The TAI Stablecoin is a collateral-backed cryptocurrency whose value is stable relative to the US Dollar. We believe that stable digital assets like TAI are essential to realizing the full potential of blockchain technology. Unlike other Stablecoins, TAI is completely decentralized.
Users can obtain TAI by buying it from brokers or exchanges, and TAI holders can utilize a special mechanic known as the TAI Savings Rate to earn a steady, low-risk return on their holdings.
TomoFinance is a smart contract platform on TomoChain that backs and stabilizes the value of TAI through a dynamic system of Collateralized Debt Positions (CDPs), autonomous feedback mechanisms, and appropriately incentivized external actors.
TomoFinance enables anyone to leverage their TOMO assets to generate TAI on the TomoFinance Platform. Once generated, TAI can be used in the same manner as any other cryptocurrency: it can be freely sent to others, used as payments for goods and services, or held as long-term savings. Importantly, the generation of TAI also creates the components needed for a robust decentralized lending platform.

Collateralized Debt Position Smart Contracts

Anyone who has collateral assets can leverage them to generate TAI on the TomoFinance through TomoChain’s unique smart contracts known as Collateralized Debt Positions. A Collateral Asset is a digital asset that the decentralized TomoFinance Governance process has input into the system.
CDPs hold collateral assets deposited by a user and permit this user to generate Dai, but generating Dai also accrues debt. This debt effectively locks the deposited collateral assets inside the CDP until it is later covered by paying back an equivalent amount of TAI, at which point the owner can again withdraw their collateral. Active CDPs are always collateralized in excess, meaning that the value of the collateral is higher than the value of the debt.

The CDP interaction process

Step 1: Create and Collateralize a CDP

A user creates a CDP via TomoFinance by funding it with a specific amount of TOMO. Currently, the amount of deposit is set at a minimum of 200 TOMO. Once funded, a CDP is considered collateralized. 70% of TOMO then goes through the CDP Contract and Voter Contract and enters Masternode in a Voting process.

Step 2: Generate TAI from the CDP

The CDP owner initiates a transaction and then confirms it in her unhosted cryptocurrency wallet. The CDP Contract then interacts with TAI Contract to generate a specific amount of TAI in exchange for keeping her collateral locked in the CDP.

Step 3: Pay Down the Debt and the Interest

To retrieve a portion or all of the collateral, a CDP owner must pay down or completely pay back the TAI she generated, plus the Interest that continuously accrues on the TAI outstanding. The Interest can only be paid in TAI.

Step 4: Withdraw Collateral

With the TAI returned and the Interest paid, the CDP owner can withdraw all of her collateral back to her wallet. The CDP owner should make a withdrawal request to CDP. After 48 hours, she can withdraw TOMO from the CDP. Only after the previous withdrawal is successful, users would be able to request a new one.

Collateralization Ratio

A Collateralization Ratio lies between the collateral assets and the borrowed TAI, in percentage.
  • Collateralization Ratio > 150%: The collateral assets are safe
  • Collateralization Ratio > 110%: The collateral assets are at risk
  • Collateralization Ratio = 110%: Liquidation occurs

Liquidation Ratio

A Collateralization Ratio at the point of Liquidation is called Liquidation Ratio (%). In TomoFinance, the Liquidation Ratio is set at 110%.

Liquidation of Risky CDP

To ensure there is always enough collateral in the TomoFinance to cover the value of all outstanding debt (the amount of outstanding TAI), any CDP deemed to be too risky will be liquidated. The TomoFinance platform makes the determination after comparing the Liquidation Ratio to the current collateral-to-debt ratio (Collateralization Ratio) of a CDP.

Liquidation Process

The Liquidation happens when the Collateralization Ratio drops to 110%.
There are three phases of the Liquidation Process:

Request to Voter Contract

When the value of collateral assets cannot cover the generated TAI, Liquidation will occur. The TomoFinance system will make a Request to the Voter Contract. This Request will trigger the Unvoted process on the TomoChain’s Masternode to claim back the mortgaged TOMO.

TOMO is sent back to CDP and then exchanged for TAI

TOMO will be sent back after 48 hours from the Request, as the Rule of the TomoChain’s Masternode. TOMO then will subsequently be exchanged for TAI.

Burn TAI

Afterward, the amount of TAI that is equivalent to liquidated collateral will be burned. It will balance the amount of TAI on the market, which keeps its price stable.

Price Stability Mechanisms

Target Price

The TAI Target Price is used to determine the value of collateral assets TAI holders receive in the case of an Emergency Shutdown. The Target Price for TAI is 1 USD, translating to a 1:1 USD soft peg.

Emergency Lock

Emergency Lock is a process that can be used as a last resort to directly enforce the Target Price to holders of TAI and CDPs and protect TomoFinance against attacks to its infrastructure. Emergency Lock stops and gracefully settles the TomoFinance while ensuring that all users, both TAI holders, and CDP users, receive the net value of assets they are entitled to. Effectively, it allows TAI holders to Payback TAI and to receive the TOMO you deposit previously
Examples of serious emergencies are long-term market irrationality, hacking, or security breaches. The Emergency Lock mechanic will also be used to facilitate system upgrades.

TFI Token Governance

TFI is a TRC-21 token that will be rewarded to users whenever they Payback TAI, partly or entirely. By staking TFI, users will hold a share of TomoFinance's reward from TomoChain's Masternode.
In addition to payment of the Stability Fee on active CDPs, the TFI token plays an important role in the governance of the TomoFinance Platform.
The TFI token—the governance token of the TomoFinance Protocol—allows those who hold it to vote on changes to the TomoFinance Protocol in form of Proposals. Note that anyone, not only TFI holders, can submit Proposals for a TFI voter. Users can withdraw TFI for voting at anytime prior to the approval of Proposals.

How to calculate TAI, TFI interest rates

For example, if a user deposits 200 TOMO to generate 100T AI with the interest rate of 1 TAI/ 1 block, his total debt will be 101 TAI. In case the user paybacks 50 TAI, his debt will remain 51TAI including initial TAI and interest.
Simply, when the TFI is sent to the user immediately at that time, the contract will be divided. In detail, as soon as the user payback 50 TAI, 49 TAI will be burned and the 1 TAI remaining will be sent to the address owner. Then, the interest rate will be counted on the 51 TAI debt.
The TFI a user receives will be calculated by 50% of the current interest rate. When a user payback even partially, TFI will be directly sent to his account.
Interest rate is calculated on each block, so TFI will be also calculated and displayed on blocks.
In case a user wishes to generate more TAI, TFI with the current interest rate will also be sent to the user's account.

Total initial supply of TFI

The total initial supply of TFI will be 25.000.000. The initially assumed price will be 0.095343USDT.
This amount will be divided into 4 parts following:
24%: Shareholders will hold
26%: CEO and the board of directors will hold, but this amount will be locked in 3 years.
42.5%: This amount will be for Mining (used for accelerate TFI corresponding to 50% interest rate)
7.5%: Used for Airdrop Campaign; equals 1.875.000 TFI (TFI=0.1$)
TFI will not be burned.

Key External Actors

In addition to its smart contract infrastructure, the TomoFinance Platform relies on certain external actors to maintain operations. Keepers are external actors who take advantage of the economic incentives presented by the TomoFinance platform. Oracles and Global Settlers are external actors with special permissions in the system assigned to them by TFI voters.

Keepers

A keeper is an independent (usually automated) actor that is incentivized by profit opportunities to contribute to decentralized systems. In the context of the TAI Stablecoin System, keepers participate in the Debt Auctions and Collateral Auctions when CDPs are liquidated.
Keepers also trade TAI around the Target Price. Keepers sell TAI when the market price is higher than the Target Price and buy TAI when the market price is below the Target Price to profit from the expected long-term convergence towards the Target Price.

Examples

The TAI Stablecoin System can be used by anyone without any restrictions or sign-up process.

Example​ ​1

Harry needs a loan, so he decides to generate 200 TAI. He locks an amount of TOMO worth significantly more than 200 TAI into a CDP and uses it to generate 200 TAI. The 200 TAI is instantly sent directly to his TomoFinance account. Assuming that the Stability Fee is 10% per year, Harry will need 220 Dai to cover the CDP if he decides to retrieve his TOMO one year later.
One of the primary use cases of CDPs is margin trading by CDP users.

Example​ ​2

Harry wishes to go margin long on the TOMO/TAI pair, so he generates 100 USD worth of TAI by posting 150 USD worth of TOMO to a CDP. He then buys another 100 USD worth of TOMO with his newly generated TAI, giving him a net 1.66x TOMO/USD exposure. He’s free to do whatever he wants with the 100 USD worth of TOMO he obtained by selling the TAI. The original TOMO collateral (150 USD worth) remains locked in the CDP until the debt plus the Stability Fee is covered.

Conclusion

The TAI Stablecoin System was designed to solve the crucial problem of stable exchange of value in the TOMO ecosystem and the wider blockchain economy. We believe that the mechanism through which TAI is created, transacted, and retired, along with the direct Risk Management role of TFI holders, will allow for self-interested Keepers to maintain the price stability of TAI over time in an efficient manner. The founders of the TomoFinance community have established a prudent governance roadmap that is appropriate for the needs of agile development in the short term, but also coherent with the ideals of decentralization over time. The development roadmap is aggressive and focused on the widespread adoption of TAI responsibly.

Glossary of Terms

Collateralized​ ​Debt​ ​Position​ ​(CDP):​ A smart contract whose users receive an asset (TAI), which effectively operates as a debt instrument with an interest rate. The CDP user has posted collateral above the value of the loan to guarantee their debt position.

TAI

The cryptocurrency with price stability that is the asset of exchange in the TAI Stablecoin System. It is a standard TOMO token adhering to the TRC-21 standard.

Keepers

Keepers help maintain TFI market rationality and price stability.

TFI

The TRC-21 token used by TFI voters for voting and gain rewards after Payback TAI

TFI ​Voters

TFI holders who actively manage the risk of the TAI Stablecoin System by voting on Proposal.

Company Profile

Company Name

Corefy Fintech Co., Ltd.

Certificate

224823

Incorporated

19/11/2020

Address

House of Francis, Room 303, Ile Du Port, Mahe, Seychelles.
Last modified 7mo ago