Announcing North Pole
We are happy to announce the North Pole! Here is an article to explain its utility.
Currently, a lot of assets, such as staked assets from various OHM forks, can’t be used. North Pole is here to allow you to use these assets.
We will create partnerships with launched or prelaunch projects, willing to give their tokens cold power.
You will be able to use these assets as collateral to mint $POLE, the official stablecoin of the North Pole
Since $POLE is backed by staked tokens, the value of your collateral should always increase (maybe not in USD value, but always in tokens).
So what is $POLE you may ask? $POLE is a USD pegged stable coin. As with most stablecoins, it will be traded on markets with other stablecoins such as USDT, DAI, and USDC.
How does North Pole work ?
Here is how you can benefit from North Pole
- Deposit your collaterals on North Pole.
- You get assigned a debt allocation (you, the borrower).
- You get $POLE tokens in your wallet.
- You take your $POLE wherever you like
How to get back your collateral ?
To regain your collateral, you will need to repay your debt plus your interest incurred to be allowed to withdraw your collateral.
The $POLE token
The $POLE token is a USD pegged stable coin that is backed by staked assets. $POLE tokens are minted by the multisig holders on Avalanche, and only after being collateralized are they injected into the circulation.
How much $POLE can I get?
The amount of $POLE depends on two factors for each collateral you decide to deposit. One is the Loan to Value ratio (LTV), and the other is the initial maximum $POLE allocation to that collateral.
Everything clear? Let’s run through a quick scenario.
Michael Snow is a rich crypto snowman who owns 100,000 DAI, and he is a fan of Ice DAO. He has decided to deposit them into the staking pool, so he can earn high returns.
Michael snow now owns $GLA tokens which have a current value of $100,000 and are increasing in value. Michael Snow gets bored and wants to use this money to buy himself an ice home.
How can he do this?
Michael Snow deposits the $100,000 worth of $GLA into North Pole, he then chooses how much risk he wants to take on. As he doesn’t want to take much risk, he mints 10% of his collateral. He then clicks borrow and the Snowman sends him 10,000 $POLE.
(He will be paying an interest rate of 0.8% because of his collateral choice).
He then goes and asks his ice home builder what stablecoin he prefers.
The builder says USDT, so Michael Snow swaps his $POLE for USDT. So he now has more or less 10,000 USDT.
He pays 5,000 $POLE for his ice home and uses the remaining $5,000 to buy ice furniture. Remember his $GLA is increasing in value while he is seated in his ice home.
The cold $NORTH token
$NORTH is the North Pole coldest token with a maximum supply of 273,150,000 million (The absolute zero). It will be live on the Avalanche network.
The distribution of the $NORTH tokens is as follows:
- 73% (199,399,500 NORTH): Global Farming Incentives
- 20% (54,630,000 NORTH): Team allocation (4 Year Vesting Schedule)
- 7% (19,120,500 NORTH): Initial DEX Offering
What does the $NORTH token do?
The main function of the $NORTH token is to stake it in North Pole to obtain sNORTH tokens, which have benefits.
- They grant holders a claim on fees generated by the protocol.
The protocol fees, at launch, derive solely from interest on borrowed $POLE. As debt is paid in $POLE, fees are collected. They are distributed as follows:
- 75% are used to purchase $POLE tokens that go to sNORTH token holders.
- 20% is allocated to the governance treasury that will be used to incentive $POLE liquidity pools.
- 5% is redirected to a multisig treasury that will be used when market conditions require intervention.
Risks of Using North Pole
Risk 1
With all lending and borrowing protocols, there is a chance of liquidation. Liquidation occurs when the value of collateral drops to a predetermined point. Your collateral isn’t enough to cover your debt. This predetermined point is shown once you open your debt position on North Pole. That’s why we will add a maximum borrowing percentage for each different tokens listed on North Pole.
If your position is liquidatable, a third party can choose to pay off your debt in exchange for your collateral plus a liquidation fee. If there happens to be any collateral left, users can withdraw it.
Remember that each collateral has an independent market on North Pole! This is a powerful feature because users can select which assets they are comfortable taking on more risk with, and which they are not.
Risk 2
North Pole uses smart contracts and thus like with any other DeFi project there are chances of smart contract bugs and exploits.
TLDR
- Interest-bearing tokens are the collateral
- Each collateral has independent debt
- $POLE is USD
- $NORTH is staked for $sNORTH
- $sNORTH is for fee-sharing
- North Pole is the coldest lending protocol
