When stablecoins were established in 2015, they served to bring stability to the investment portfolios. However, their main disadvantage was that the backed currencies they used were fiat like the USD. This generated many ups and downs in their price, and to be dependent on an off-chain currency.
So, logarithmic stablecoins came into the mainstream. These kinds of stablecoins are backed by one or a group of solid decentralized cryptocurrencies. Therefore, in this article, you will discover why TOR stablecoin is the best option to hold.
What is TOR?
TOR (Tyche Owned Reserve) is a logarithmic stablecoin whose name is inspired by Tyche, the greek goodness of fortune. This stablecoin was developed by having UST as a model to follow. However, Hector Finance made an optimized version of UST by adding a security layer to make it always pegged to $1.
The goal of TOR is to increase deflationary pressure and to be used as a collateral crypto asset.
How does TOR work?
The TOR stablecoin accomplishes the ERC-20 standard and the protocol can mint it when users burn HEC tokens. This happens by using a decentralized oracle price built by Hector Finance.
Therefore, TOR uses an “expansion and contraction” mechanism that always ensure that TORs’ price is stable. So, to guarantee that TOR is always $1, this algorithmic stablecoin works with two sources:
- Other algorithmic stablecoins and the HEC/stable liquidity pool (LP)
On the other hand, HEC, the native token of Hector Finance, is backing TOR which makes the price of HEC increase and TORs demand too by modulating its supply.
2. Hector Finance Treasury.
In case the price of HEC decreases more than expected, the treasury of Hector Finance will stabilize the value of HEC by buybacks and burns.
Hector Finance Latest Developments
According to the roadmap, Hector Finance will launch “Hector Pay”, a payment system where users can buy things with their DeFi balance. Also, users will be able to make cross-chain transactions using the mobile app with very low fees backed by the Fantom Opera Chain.
Moreover, it’s important to mention that Hector Finance will enable yield farming. This feature will appear in the TOR/stablecoin liquidity pools in Curve that will have a minimum of 20% APY.
$TOR LP Farming surpassed 3,5M$ TVL 😍
Our investors are earning 60% APR on stable farm! 🔥
You can join it also with USDC or DAI! 👇https://t.co/FTa8bXb79E
— Hector Finance (4,4) (@HectorDAO_HEC) February 9, 2022
Note: the “farm” feature is in its beta version. Therefore, you need to get into the whitelist to be able to mint some TOR with DAi or USDC. Also, the maximum mint amount for every user is $50,000.
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