An Introduction to Tranquil Finance (TRANQ)

Tranquil Finance is an algorithmic money market protocol operating on the Harmony ONE blockchain. It allows users to supply and borrow assets while receiving or paying interest in a completely permissionless and decentralized manner. Inspired by the Compound protocol on Ethereum, Tranquil Finance benefits from Harmony’s fast and affordable transactions, democratizing access to DeFi lending and borrowing.

How Tranquil Finance Works

Tranquil Finance operates as a decentralized bank where users can deposit assets to earn interest or use deposited assets as collateral to borrow funds. Similar to platforms like Aave, Venus, and BenQi, Tranquil Finance has brought this financial model to the Harmony blockchain, aiming to be a foundational piece of Harmony’s DeFi ecosystem.

Components of Tranquil Finance

• Supply and Borrow Markets: Users can deposit assets such as BTC, ETH, and USDT to earn interest or borrow against their collateral. All loans are over-collateralized to ensure solvency, and interest rates are determined based on market demand.
• Smart Contracts: The protocol primarily uses three types of smart contracts:
  • tqToken Contracts: These represent the depositors’ assets and accrue interest over time. Examples include tqONE, tqETH, and tqUSDC.
  • Comptroller Contract: This smart contract approves or denies borrow requests by assessing the borrower's collateral and borrowing power.
  • Price Oracle Contract: Essential for fetching market prices of assets to compute and validate borrowing limits.

Use Cases in DeFi

Tranquil Finance allows users to engage in various financial activities, including:

• Leveraged Long Positions: Borrowing assets like USDC to purchase other cryptocurrencies like ONE.
• Short Positions: Borrowing and selling assets like ONE, with the intention of buying back at a lower price.
• Collateralized Loans for Expenses: Borrowing against assets like BTC to cover living expenses without selling the original assets.

Vision and Roadmap

Tranquil Finance aspires to become a leading lending and borrowing platform within the Harmony ecosystem. The protocol aims to support not only standard assets like BTC and USDT but also tokens unique to Harmony. Their long-term vision includes enabling users to perform advanced financial strategies such as leveraged trading, options, and perpetual swaps, creating a unified and versatile DeFi platform.

Tokenomics of TRANQ

The native token of Tranquil Finance is $TRANQ, executed as an HRC20 token with a total supply of 1,000,000,000. By staking $TRANQ, holders can earn 75% of the fees generated by the protocol.

Token Distribution

A total of 1 billion $TRANQ tokens are distributed as follows:

• Incentives: 50% for rewarding users participating in borrowing, lending, and providing liquidity.
• Treasury: 28% reserved for strategic partnerships, staff, and services.
• Team: 10% allocated to the team with a one-year linear vesting period.
• Seed Funding: 5% for early investors with a one-year vesting period.
• Public Sale: 5% offered during the initial public sale through xTRANQ.
• Bootstrap Liquidity: 2% designated for DEX liquidity.

Governance and Community Involvement

Tranquil Finance is committed to progressive decentralization, incorporating DAO governance to democratize decision-making and protocol ownership. The community can participate in governance by staking $TRANQ, which grants them voting power on protocol changes and proposals.

Price Oracle and Security

Price Oracles are crucial for providing accurate USD prices for deposited assets. The robustness of the Price Oracle design is vital to prevent manipulations like flash loan attacks. The Comptroller contract relies on the oracle to approve or reject borrow requests based on current asset prices. Tranquil Finance has worked to address vulnerabilities observed in other protocols, such as CREAM and Aave, by enhancing oracle security.

Conclusion

Tranquil Finance represents an important development for the Harmony blockchain, offering a decentralized and efficient money market protocol. With ambitious goals and a clear roadmap, Tranquil Finance has the potential to significantly enrich the Harmony DeFi ecosystem, providing users with various financial opportunities and capabilities.

Tranquil Finance Price Analysis

As of December 25 2024 Tranquil Finance has a marketcap of $5.2K. This is {{percentagefromath}} from its all time high of $1.39. In terms of its tokenomics, there's a total supply of 1B with 7.6% currently outstanding. Keep in mind Tranquil Finance has a fully diluted value of $68K which many investors might interpret as overvalued.

Of course, don’t trust price predictions alone, always check the Coinrotator token screener to follow the trending market.