Frequently Asked Questions

What is DeFi? 

DeFi, short for Decentralized Finance, leverages blockchain technology to provide services like lending, borrowing, and trading. This is achieved without the need for traditional intermediaries like banks or financial institutions, thereby creating a permissionless and transparent financial ecosystem. DeFi applications (dApps) use smart contracts to automate financial transactions, promoting greater access and efficiency.

Can you explain the difference between tokens and coins?

Coins are cryptocurrencies that have their own independent blockchain, where transactions of the coin occur and are stored. On the other hand, tokens are a type of cryptocurrency that do not have their own blockchain but reside on another blockchain. They are usually created for specific uses within a certain blockchain project and their existence and function are dependent on the underlying blockchain's infrastructure.

What is a blockchain bridge?

A blockchain bridge is a technology that allows for the transfer of tokens and other data from one blockchain to another. This interconnectivity is achieved by locking the original assets on one blockchain and issuing corresponding assets on the destination blockchain. When the assets are transferred back, the process is reversed, thus creating a bridge between two independent blockchains.

What is CryptoLink?

CryptoLink is a cross-chain interoperability protocol that enables seamless transfer of assets and data across different blockchain networks. Those who use CryptoLink can build cross-chain products, earn real yield, and instantly swap between blockchains.

How does CryptoLink conduct cross-chain transfers?

An example of what can be built with CryptoLink is a project called, AnyToAny, which uses a "burn-and-mint" method to enable cross-chain transfers. PAPER is the intermediary swap token and is burnt on the source chain and subsequently minted on the destination chain.

Does CryptoLink give rewards?

Yes! CryptoLink offers rewards for staking liquidity. A DeFi user must create a liquidity pair (LP) with PAPER-Native, where "Native" refers to the blockchain native gas coin on a given chain (ETH on Ethereum, MATIC on Polygon, AVAX on Avalanche). That LP must then be staked on the CryptoLink dApp for at least 1 week. The longer the stake, the greater the rewards! All rewards are given in wrapped blockchain native gas coins (WETH, WMATIC, WAVAX). Rewards are also given for proof-of-stake bridge validation. For more information, please see the documentation page.

How does the price of PAPER stay steady between chains?

Since PAPER can be instantly swapped between blockchains, arbitrage bots (or individuals) who notice a price discrepancy of PAPER between blockchains can buy PAPER on the cheaper chain and sell it on the more expensive chain. The act of doing this is called "Arbitrage". Community led arbitrage is a key feature of the CryptoLink ecosystem.

Does CryptoLink have a community? Where can I find it?

CryptoLink does have an active and supportive community. Please see the social links in the footer. You will most likely find the most active users on Discord and Twitter.

What are some ways to get involved in the ecosystem?

DeFi users can get involved in the community by staking PAPER-Native, becoming a bridge validator, building cross-chain products, or simply joining our discord and participating by chatting. We encourage you to first read the project documentation and spend time in the community before "apeing" into any project or protocol.