What is Tectonic crypto lending protocol & its TONIC token?

Highlights

• A large number of players exist in the crypto lending sector that promise “passive income”
• Tectonic has a pretty similar model, and is claimed to have “algorithmically determined” rates
• TONIC is not among the high cap cryptocurrencies, and the price has shown volatility

Active management of crypto assets versus passive income by using decentralized finance (DeFi) seems to be one of the top debates in cryptocurrencies today.

After Bitcoin’s sharp rally over the past few years, though phases of sharp drops cannot be ignored, a lot of enthusiasts rushed to avail the services of cryptocurrency exchanges like Coinbase. Here, the regular buying and selling of crypto assets might lead to capital gains, but this may require active management. By contrast, the DeFi sector has gained traction over the past one year, with passive income by depositing crypto assets becoming an alternative to active management of funds.

In this light, several protocols have emerged including Anchor and Maker. Today, let’s know about the Tectonic cryptocurrency project.

Crypto lending and borrowing

What the Tectonic project claims to do is enable deposits by crypto holders, which can be tapped by borrowers. In this arrangement, the project says, the depositor can earn interest, while the borrower can use assets to engage in short-to-long term activities including staking.

Also read: MANA, SAND & AXS: Top 3 metaverse tokens by market cap

Tectonic describes itself as a “money market” and “liquidity” platform, which has its own interest rate mechanism. Borrowers must provide collateral to access cryptos deposited on Tectonic. The platform, in its whitepaper, states that all deposits are pooled and managed by smart contracts, with the option for the depositor to withdraw at will. Borrowing can be done for up to 75 per cent of the value of the collateral.

Tectonic crypto

As Tectonic claims decentralized underpinnings, the TONIC token lies at the heart of this. The project claims distribution of the TONIC token through ways like vesting, airdrops, and incentives. TONIC can be staked to earn yield rewards, with an option to “unstake” the deposit at a later date.

Also read: What is Anchor Protocol DeFi crypto & its ANC token?

Tectonic crypto price

In the cryptocurrency universe, where more than 18,000 assets are tracked by CoinMarketCap, Tectonic has yet to become a big player. As of writing, the TONIC token was trading at nearly US$0.0000009, according to CoinMarketCap.

A surge was evident in the trading volume and price of Tectonic crypto. In early February, a sharp rise in the token took the price to nearly US$0.0000018, but the momentum could not sustain.

Tectonic’s price prediction is not possible due to the volatility that it has manifested so far in 2022, and also because of the wild fluctuations noticed in the wider crypto market this year.

Data provided by CoinMarketCap.com

Also read: Suncor (SU) & TC Energy (TRP): 2 TSX stocks to watch as oil prices rise

Bottom line

Tectonic is yet-another DeFi lending protocol, which has a native token for governance. How Tectonic competes in the possibly already crowded sector would become clear in the coming months.

The protocol seeks depositors by promising interest income without having to actively manage the crypto holding. The TONIC token has remained volatile and its price prediction is very hard to make.

Risk Disclosure: Trading in cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory, or political events. The laws that apply to crypto products (and how a particular crypto product is regulated) may change. Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading in the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed. Kalkine Media cannot and does not represent or guarantee that any of the information/data available here is accurate, reliable, current, complete or appropriate for your needs. Kalkine Media will not accept liability for any loss or damage as a result of your trading or your reliance on the information shared on this website.