What is Convergence? By now you’ve probably heard of Ethereum. Ethereum was the first platform to truly bring out decentralized trading, lending and yield earning to anyone with a valid internet connection. All this was done while including key features like transparency, interoperability and immutability with the blockchain. In just the last summer, blockchain technology and decentralized finance has exploded creating multiple digital asset types including Security Tokens (STs), Utility Tokens (UTs), and also Non-Fungible Tokens (NFTs). As of right now, many of the tokens still remain in their own systems. Furthermore all of these tokens require support from their own platforms to run smoothly.
The tokenization market might see growth at a CAGR of 22.1% by 2023. The DeFi market, itself, has already reached a 68.75 billion market cap at the time of writing. Everything sounds quite impressive and smooth right? Well that’s not exactly the case. There’s quite a few issues that still remain. So let’s first talk about it in the Issuer’s perspective. In the case of Issuers, they face challenges such as:
- Non-scalable Distribution
- Assets Cannot be Sold More expensively / Even at Discount
All these challenges hinders the potential within the ecosystem. So now let’s talk a little more from the Investor’s perspective. The investor faces challenges which includes:
- Lack of Liquidity
- Too much Emphasis on Ownership
- Lack of Composability
Apart from the challenges faced by Issuers and Investors, the DeFi protocols also face issues like lack of real world exposure and missing off-chain connection with asset issuers. So all these various challenges in the ecosystem makes it difficult for users to interchange assets freely.
In order to solve this issue, we introduce to you, the Convergence Protocol. The Convergence Protocol is a one of a kind of a platform that will allow assets to be interchangeable within the DeFi space. All this will be done by connecting Wrapped Security Tokens (WSTs) with UTs on an interface that will be intuitive, adoptive, and composable with various other DeFi protocols.
The Convergence Protocol consists of a token wrapping module, Convergence AMM infrastructure, Convergence Pools, and the ConvergenceDAO.
Token Wrapping Module
The Token Wrapping Module is the secret weapon and the proprietary mechanism of the Convergence Protocol. You can think of BTC <> WBTC. Then this is the token wrapping layer for creating WSTs with various features mentioned above. So the WSTs will be injected into Convergence AMM.
Convergence AMM Infrastructure
Built on the Ethereum platform, The Convergence AMM is EVM-compatible with other chains including BSC, Moonbeam, and more. The Convergence AMM will allow trading WSTs 24/7 and real asset price discovery. The infrastructure will find the best possible order routing from aggregated liquidity sources to give traders the best prices. In addition, it will completely eliminate the complexity that comes with AMMs and allow everyone to have easy access to trade and provide liquidity amongst the pools.
Having talked about the AMM structure, we have to now talk about the Convergence Pools. The Convergence Pools will provide asset owners the easy flexibility to manage and create their own market making strategies. Through creating their own pools, the asset owners can perform initial WST offerings along with providing liquidity for further trading for DeFi users. Moreover this feature will allow everyone to easily provide and trade among the pools.
One of the biggest questions that many users are concerned with nowadays is transparency and the ability to participate in governance. So with ConvergenceDAO, it will provide transparency and decentralization to the Convergence Protocol. In addition the CONV token holders will have governance abilities which includes voting on various protocols.
So let's talk more about the Wrapped Security Tokens…
So what exactly does WST achieve? There’s a few important features that users should know about WST. These features include:
WSTs will be traded across the Convergence ecosystem which includes the Convergence AMM and other liquidity venues.
Tied-in Economic Exposure
The team at Convergence designed a proprietary token wrapping module that will ensure both on-chain and off-chain perspectives. Then the module will transfer economic benefits to WST holders.
WSTs are not just limited to trading and liquidity reasons. Through working with various types of DeFi protocols, WSTs will flow around the DeFi supply chain with various utilities. Furthermore, this will also include stablecoins supported by WSTs and lending & borrowing protocols with WSTs as a collateral.
Wait...is there a native token (CONV) available?
Convergence has its own native token known as CONV. The token will include several features including:
In terms of governance, the CONV token and the holders can form a self-governed community which will reflect the needs of the members. So the holders of the tokens can also vote on governance matters including new assets, listing on the exchanges, or any other liquidity thresholds that need to be maintained.
Split of Transaction Fee
So the liquidity providers can receive a split of the transaction fee which will come in the form of CONV tokens.
Additionally the holders of the CONV token can have exclusive access to new initial WST offerings and pre-sale events!
Check out more about Convergence Protocol!
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