Introduction

The DeFi space has seen the birth of numerous projects and platforms that promise the best yield farming opportunities. One such platform is Cream Finance, with its unique lending and borrowing platform that offers its users the best services from different protocols, such as Compound Finance and Balancer.

What Is Cream Finance?

Source: official website

Short for “Crypto Rules Everything Around Me,” Cream Finance is a multi-purpose lending and exchange protocol based on both Compound FInance and Balancer Labs. Built on the Ethereum network, the platform provides lending and exchange services to all users by applying features from successful projects and improving on them to create a better platform.

The platform gathers source codes from projects such as Compound Finance, Balancer, Curve Finance, Uniswap, and Blackholeswap, tweaking and improving them to push the boundaries of De-Fi protocols. With these sets of source codes, users can lend assets and use the capital as collateral to acquire other assets.

History of Cream Finance

Cream Finance was first launched on the Ethereum network on August 3, 2020. It is headed by CEO Jeffrey Huang, a crypto expert and developer who is also the founder of Mithril (MITH) crypto. The platform was released along with a mining pool called YOLO Alpha as a tribute to the owner of Yearn FInance.

The second version of the protocol was launched on the Binance Smart Chain on September 11, 2020. In June 2021, the platform announced that it would also be launched on the Polygon network and Arbitrum to ensure lower gas fees and quicker user transactions.

How Does Cream Finance Work?

Source: coinbureau

Cream Finance offers two major functions to its users: lending and borrowing. These functions have been adapted from other protocols and improved upon to better suit the platform’s users.

To borrow assets, users first have to deposit a certain amount of their preferred token as collateral. The amount of assets deposited has to surpass the amount they wish to borrow. Once that is done, they can begin borrowing from the platform. However, the platform can liquidate the deposited asset if the USD value of the asset drops below a certain point.

To ensure their assets are not liquidated, borrowers need to ensure their holdings do not fall below the set point. To ensure that, the platform advises asset holders to only borrow at most 80% of their total wallet value. Lastly, the platform also allows users to borrow assets outside the token they deposited by lending their assets into different lending pools.

Lenders who supply tokens into lending pools are rewarded with interest rates based on the supply and demand for that asset. This interest rate also determines the amount the borrowers will owe on the borrowed funds, ensuring that they do not borrow excessively.

Features of Creamy Finance

Aside from its lending and borrowing services, Cream Finance also renders other services to users and incorporates several other features from its parent protocols. Some of these features include:

Cream Finance Liquidity Mining

The Cream Finance app is home to the Cream Swap, a Decentralized Exchange (DEX) protocol forked from Balancer (BAL). It is an Automated Market Maker (AMM) that allows autonomous token swaps without the need for centralized authorities.

The platform creates liquidity by allowing users to exchange tokens, including those dropped as collateral. By doing so, the platform is able to increase the liquidity of assets while staying fully decentralized.

While forked from the Balancer (BAL) platform, the Cream finance protocol differentiates itself by charging a trading fee of 0.25%. This is lower than other protocols, which offer 0.30% to users.

Staking

Source: Official Website

Platform users can stake CREAM tokens and are rewarded based on the number of years they choose to stake them. This is different from the collateral deposits, as users cannot access the tokens locked and can not use them to trade or vote within the platform.

Users can use this feature to earn passive income. However, staking assets carries a risk of loss. In this case, users will incur a loss if the market value of CREAM falls.

Cream’s Markets

The CREAM market is available on multiple blockchain networks, offering users more usability, accessibility, and efficient transaction execution. The supported networks include the BNB chain, Arbitrum, Base, Polygon, and Ethereum. The Ethereum network includes specialized pools: C.R.E.A.M pool and Meme Pool for different asset types, ensuring flexible transactions for users.

CreamY Automated Market Maker

Creamy is an AMM designed to facilitate liquidity swaps between crypto assets of equal value. Users can swap stablecoins for other stablecoins and wrapped tokens for other wrapped tokens.

Governance

The Cream platform is a Decentralized Autonomous Organization, which gives token holders total power over the platform’s operations. Through the CREAM token, they can suggest and submit proposals and vote on them.

To submit a proposal, token holders need to start a conversation on the community forum either by submitting a detailed plan or by bringing up an idea. After that, the idea needs to be discussed with the community for 24 hours before moving to the voting stage.

To begin voting, a clear and concise proposal should first be written, after which a snapshot of the proposal along with the forum topic link should be submitted. To list a proposal in a snapshot, the proposer must hold 1,500 CREAM tokens and post the voting link on the forum topic to ensure other token holders are able to see it and vote.

To be valid and recognized, a proposal needs to receive at least 15000 CREAM votes, it needs to obey all the rules, and it must have been thoroughly discussed with the community.

What is CREAM Token?

CREAM is the native ERC-20 token built on the Ethereum blockchain. Platform users are rewarded with CREAM for interacting with the platform, either by borrowing, lending, or providing liquidity. The token also grants users governance over Cream Finance, allowing them to vote on important decisions and proposals on the platform.

CREAM token holders are able to take part in governing the platform, proposing policies, voting on decisions, making policy adjustments, and influencing the development of the platform. This allows users to take active roles in the management of the platform by voting on proposals that ensure the platform’s progress.

Token holders can also decide to trade or stake their CREAM tokens. By staking their CREAM token, they earn added benefits and opportunities that increase the value of the token and raise its demands. Lastly, the token is also used to reward users for lending or providing liquidity on Cream Finance. This serves as a form of incentive to users to encourage them to participate in the platform.

Tokenomics

The CREAM token was not launched with an ICO for the project; rather, all tokens were pre-mined and had a fixed supply of 9 million CREAM tokens. This number was dropped in September 2020, after 6 million CREAM tokens were burnt, dropping the total supply to 3 million CREAM tokens.

Currently, the CREAM token has a total supply of 2,924,546 and a circulating supply of 2,328,425 and is distributed in the following ways:

• Treasury: 61.5% of total supply
• Team and Advisors: 23.1% of total supply
• Compound Finance: 7.7% of total supply
• Seed Round: 7.7% of total supply

Conclusion

The Cream Finance platform is designed to foster growth and maximize users’ earnings on their assets. Whether experiencing constant change and growth or providing users with effective lending and borrowing services, Cream Finance is always looking for the best option for its users, attracting more investments and developing the DeFi ecosystem.

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