Evercro: A Reflection Token with Automated Liquidity Acquisition

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Evercro aims to solve the problems of prior cryptocurrencies including mining rewards, farming rewards, and liquidity provisioning. Mining equipment can be both costly and harmful to the environment, but mining remains of interest due to the opportunities afforded by it. As an easy alternative to mining rewards, we propose allowing users to participate in a smart contract token reflection to produce tokens inside their own wallet. Another challenge remains to facilitate and maintain liquidity on decentralized exchanges. By nature, decentralized exchanges require liquidity for user participation, thus the responsibility is on the developers to provide it. Historically, developers created incentives aimed at users to provide liquidity which can be outweighed by risk due to the subjectivity of impermanent loss. As a solution, we propose utilizing a smart contract function to automatically capture liquidity to be used on the decentralized exchanges and held in custody independent from user possession. Additionally, a smart contract that provides the capability to burn tokens can promote scarcity by reducing the total supply. Together, the combination of these tokenomics may afford far superior benefits for the community within the decentralized venue. Allowing these functions to be amplified and dependent on volume provides an ideal incentive to expedite adoption and foster new use cases.

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Introduction

Decentralized finance is made possible by using decentralized exchanges in collaboration with liquidity pool smartcontracts. For any token on the smart chain to have an availability to be swapped on a decentralized exchange, it must have an available liquidity pool of tokens for swapping. The challenge remains on how to properly incentivize users to keep such liquidity pools maintained. Recognizing this, developers have attempted to satisfy these conditions by using various tokenomic structures with incentives for the user to supply liquidity into the pools. An automatic liquidity acquisition can be featured as an alternative solution compared against the traditional “farming reward” structure.

An automatic liquidity acquisition function where usersare offered rewards (via reflection) in lieu of traditional farming rewards. These reflections would act to distribute tokens proportional to volume, and could thus provide a more reasonable incentive for holding.

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Automated Liquidity Acquisition

We understand that liquidity is crucial in any trading environment. By definition, decentralized liquidity is simply the accessibility of tokens operated and controlled by a smart contract, hosted by a decentralized exchange.

Historically, marketmakers have been used to provide a service for buyers and sellers on traditional order book exchanges for a better user experience. The main function of these market maker services was to fill buy and sell orders promptly and reduce overall market volatility caused by large orders. However, traditional order books have long been outdated by newer technology, and have been replaced by liquidity pools in a decentralized venue. Just as market makers are compensated for providing a service in the order book environment, proper incentives for adding liquidity are a key factor in any decentralize denvironment. Problems arise when the liquidity pool provider loses the incentive to add tokens into the pool, which occurs after the token pair is subjected to impermanent loss resulting from arbitrage.

As a solution, Liquidity can be taken as a function of the smart contract using market activity from all purchases and sales. A portion of these trades will be captured by the smart contract

For this to happen, 20% fee is taken and 50% of the fee is sent to the Liquidity pairing, and the remaining 50% is distributed to the wallet holders.

Large liquidity pools act to decrease the volatility of the token. Therefore, as the token matures, the auto-liquidity can beattributed toward an ever growing market stability capable of absorbing large market activity

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Token Reflection

Traditional mining is both costly and inconvenient for the user. Frictionless, static reflection rewards accrue by simply holding your tokens, and features an innovative hold-farming reward structure that stands out from conventionalpool-farming rewards. The idea behind this function is to eliminate token dependencies that have created problems in the past.

Earlier models of decentralized finance tokens such as pool farming are costly and rely on user action to manually compound rewards. As a solution, we propose the utilisation of a compounding reward structure that requires no additional fees in a smart contract function, also known as token reflections. To achieve this, reflection must happen without cost or impact to the user. Considering the static rate of reflection set at 10%, the volume of market activity will directly impact the quantity of token reflection based upon the percentage of tokens held by the user relative to the overall supply.

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Depreciating Supply

In a decentralized smart chain environment, contract functions can be utilized to achieve token scarcity. To do this,we propose also distributing rewards to the burn address, which is publicly verifiable for all participants to see. We can thentrack the depreciating supply in real-time for added transparency. In our effort to establish a baseline token burn rate, we findthat these values are dependent on three important factors: reflection rate, token quantity, and market volume. The rate ofreflection rewards is proportional to the total supply in each holder’s wallet address. It is important to note that there are twoparticular variables which will affect our calculations: the increasing scarcity of tokens and the quantity of tokens absorbedinto the burn address. It can be reasonably understood that these features will have synergistic effects that can stabilize theburn rate into the future.

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