Hector Finance is focused on creating a financial structure that consists of a variety of use cases. They will initially leverage the Fantom Opera Chain.
The General Manager of Altcoin Buzz, Anindya (Ani) Baidya, anchored the Hector Finance AMA session on our Telegram channel with Prometheus, the co-founder and strategy lead of Hector Finance.
Below is a recap of the AMA session with Prometheus to understand what they are up to. Besides, the AMA is in three segments: introduction, deep dive, and community questions and answers.
Segment 1: Introduction to Hector Finance
Q – To start with, tell us about your company. How was the concept of Hector Finance created?
Hector Finance is creating a suite of financial products and services based (at first) on the Fantom Opera Chain. We’re the 2nd most held token on the entire network and consistently rank in the top 3 for social engagement. The concept came about as the result of a few things:
- We love the Fantom chain, we think it’s got amazing fundamentals and represents an untapped market set for huge growth (and we’ve started to see that growth in the last few months).
- We want to create something which brings real value to people and gives them control over their finances + opportunities.
Q – Tell us a bit about your team. Where is the team based out of?
We’re mostly Europeans but we’ve got a couple of people in Asia and Australia. I think we’ve got a good mix geographically but also in terms of experience and skills. Between us, we speak something like six languages so we’re able to get access to many markets in many countries without necessarily needing to use English.
Segment 2: Deep Dive
More Information About the Project
Q – So what is Hector Finance? What is its value proposition?
I’ll split it into a few bullet points:
- We’re developing multiple use cases this year (three of which are either here already or are set to come this month), all of which are going to bring large amounts of value to the Hector Ecosystem. This includes a lending and borrowing network, stablecoin, NFT offering, Decentralised gaming offering, and a couple of other things.
- We have a treasury of about $100m and a yearly budget of around $7.2m, so if any team has the resources needed to achieve those goals then it’s certainly us.
Q – You have a suite of applications “3,3 staking, Hector Lending and Borrowing, Hector Wrap, Hector Bond, etc. These products are already implemented. Tell us more about these.
We have a couple of main use cases in our focus right now:
- Hector Bank, which was released a few weeks ago, is a decentralized lending and borrowing network where users can lend out their tokens and borrow other tokens if they wish. This means that users always have somewhere to go for their lending and borrowing needs. Hector Bank has a TVL of about $5m so far, and we’ll be expanding it further over time to make sure it adapts and grows as is required.
- Users can stake, wrap, and bond tokens within the Hector Finance ecosystem to gain rewards like APY, discounted tokens, and taxation benefits (not financial advice, always check with an expert).
All of these things have allowed us to develop a treasury of $100m which we are now using to support the use cases we have in development.
More Insight on The Products
Q – Let’s talk more about Hector Bond. It is quite popular. What is Hector Bond and how does it work?
Bonding was the main way in which we grew in the early days of the project – essentially bonding allows you to get discounted HEC tokens from the protocol by directly giving it your stablecoin tokens. This means that the protocol can grow its reserves and users can get more tokens for their money. This was especially helpful in our launch stage and has worked well.
Right now, bonding is a less beneficial strategy for users since bond prices are determined by a mathematical basis which keeps them at a certain level, but as the use cases are deployed and the project grows more, bonding will likely come back strong as ever.
Q – Right now you have staking that is giving 200+% APY. You have been talking about the concept of Hyperstaking (4,4). What is this?
Hyperstaking is something we innovated after launch. Traditionally, bonding would vest unstaked tokens to the user over time, which could then be claimed and staked. We made more bonding more attractive to users by creating hyperstaking – the concept of pre-staking bonds before they are claimed.
Users can purchase so-called 4,4 bonds which are staked and receive compounding rewards before they are even claimed. This is one of the main factors in the growth of our treasury.
Q – Let’s come to your token. $HEC is the “World’s first deflationary rebase token”, what does that mean in layman’s terms?
Rebase tokens are essentially tokens that can be self-staked to earn compounding rewards. These rewards are given out by “rebasing” the supply of tokens – minting more. The issue that this has over time is that it creates inflation in the token supply which can be damaging to token prices over time.
Our solution to this is to create the use cases described above and in our roadmap. Part of the revenues from these use cases will be used to buy back and burn tokens from the market. This means that the tokens sold at the market from rebases can be soaked up and removed from circulation, leading to a token that can rebase, as well as, deflate. We are the first project ever to do this.
Q – Will your burn be greater than inflation always so that the token becomes deflationary?
When project revenues are high enough to burn more tokens than are minted from rebases, we are deflationary.
The main aim is to be deflationary over a pronounced period, so there may be days where we mint more, but we aim in general to burn more over time. So far we’ve been deflationary for about 2 weeks and we aim to keep that up for the months and years to come.
Q – Let’s discuss the new kid in the block. You will be launching “TOR: The Stablecoin of Hector Finance” tomorrow. Why launch a stablecoin?
Stablecoins present a unique opportunity to leverage our treasury in a way that can benefit people in a very low-risk way. To put it shortly:
- TOR is a stablecoin that you can put into a farm for 60% (yes, 60%) APR. This makes it one of the highest rewarding stablecoins in the space.
Now here’s the cool thing – minting TOR burns HEC. When TOR is minted, the DAI or USDC you use to do so is used to buy and burn HEC tokens. This means that the better the demand for TOR, the more HEC is burned. This puts us in a unique position in that we have a large enough treasury to support an enormous TVL for the TOR farm which means we can burn huge amounts of HEC tokens.
Hectorians!$TOR is still in Beta but already showing so much energy!
TVL: 1,575,000 $
Everyone can join this farming pool also depositing USDC/DAI here 👇 https://t.co/fmIH5C0uar
The LP you create can then be staked into our farming page:https://t.co/yRRRALdULb
— Hector Finance (4,4) (@HectorDAO_HEC) February 2, 2022
As HEC tokens are burned, the supply decreases, which can increase the price. As price increases, we can sell more bonds, allowing us to increase TOR rewards, leading to more TOR demand and hence an even higher HEC price.
Q – When is the 60% APY pool launching? And how do we get hold of TOR?
We’ve finished our beta test for TOR, which yielded extremely positive results. TOR has locked up more than $3m despite being a closed beta of around 1000 users, so when things go public tomorrow things should be very exciting.
TOR goes live to all users tomorrow, and you’ll be able to track the exact launch time by keeping an eye on our announcements channels.
You’ll be able to get some TOR by visiting our dashboard and entering the Farm section.
$TOR LP Farm Update
TVL: 3,800,228 $
Great rewards for our stable farmers!
Don't forget you can join this pool also without owning TOR, but just creating an LP with USDC and DAI! 👇 https://t.co/fmIH5C0uar
— Hector Finance (4,4) (@HectorDAO_HEC) February 10, 2022
Q – What can we expect from Hector Finance in the coming 2 Quarters?
A lot. The use cases we’ve already deployed will develop as projects in their own right, but we also have some huge announcements coming through the pipeline including more major use cases and products, some more partnerships, and some more treasury investments to bring in even more inflows.
Besides that, we’re also in the process of setting up some validator nodes to support the Fantom network, as well as, to create more revenue streams in the form of transaction fees.
Segment 3: Community Questions and Answers
For this segment, the five best questions shared $500 worth of $HEC. Here are some of the questions:
Q.Twitter – In Q1 2022 you mentioned Hector NFT. Can you explain about Hector NFT? Can creators participate in your NFT?
Our upcoming NFT collection will serve an important role in the DeFi game we’re making. Users will be able to mint those NFTs of varying rarities and use them in-game. Holders of the NFTs will also receive rewards in the form of reflected fees too.
Q.Twitter – Why does your Roadmap list have “Rebranding HECTOR”?
We changed our name from Hector DAO to Hector Finance to more accurately reflect our aims (users can still vote on initiatives as they could before!). The main aim of the rebrand is more to create a unique and recognizable artistic style for the project.
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