DeFi
Bybit Learn
Bybit Learn
Intermediate
4 Th04 2022

Explained: C.R.E.A.M. Finance (CREAM)

Launched in 2020, C.R.E.A.M. Finance, a relatively new DeFi protocol, stands out from numerous offerings in the market. With one of the most extensive and diverse ranges of supported crypto assets in the industry, the protocol has been gaining popularity lately, and now boasts a substantial user base.

Through its unrivaled operations so far, C.R.E.A.M. Finance shows great potential to forever alter the lending-and-borrowing paradigm on the Ethereum blockchain. Here's everything you need to know before you invest in it.

What Is C.R.E.A.M. Finance?

A fork of Compound Finance (COMP), C.R.E.A.M. Finance serves as a multi-purpose DeFi protocol. It’s essentially a peer-to-peer cryptocurrency trading platform, with liquidity mining forming its basis.

The token used by C.R.E.A.M. Finance, CREAM, is an ERC20 standard token that gives its holders governance and economic powers. Participants can engage in network governance and claim a portion of the revenue from token switching on C.R.E.A.M.'s decentralized exchange (0.05% of the 0.25% charge). A total of 9 million tokens were scheduled to be available upon launch. The community, though, voted to lower the maximum cap, and 6 million tokens were burned as a result.

What Is C.R.E.A.M.?

C.R.E.A.M is an acronym for "crypto rules everything around me." The project's aim is to create a financial system that’s more accessible and inclusive than traditional banking. The C.R.E.A.M. protocol includes lending pools that allow you to get flash loans on your collateral USD to provide liquidity, and use them as security while acquiring other assets.

C.R.E.A.M. is an Ethereum-based peer-to-peer lending mechanism. Supplementary assets on C.R.E.A.M., like CRV and YFI, set it apart from Compound Finance.

CREAM is also the native token of C.R.E.A.M. Finance. It allows users to borrow, lend, stake assets, and help govern the network. It also gives its users a voice in voting whether to support or delist assets. 

What Is C.R.E.A.M. Used For? 

As an ERC20 token on Ethereum, C.R.E.A.M. has the ability to run Ethereum Virtual Machines through smart contracts while allowing users to create DAOs for its community. This results in better composability, or plugging various financial services into one another.

Since the C.R.E.A.M. ecosystem is built on the Ethereum blockchain, CREAM tokens can be saved in any Ethereum wallet. This ensures that anyone can receive mining rewards. Users can earn money by utilizing the platform’s features and services, such as Swap.

CREAM tokens can be staked for a period of up to four years to accrue rewards. An admin unlock feature isn’t available, and users receive their rewards at the end of their staking period.

As always, cryptocurrency users can make more money if they understand what they're doing — and how the markets change, depending on pool sizes and supply and demand ratios.

How C.R.E.A.M. Finance Works

Borrowing

Users must deposit crypto in USD on the C.R.E.A.M. Finance protocol as collateral to borrow a smaller amount of cryptocurrency in USD. You can borrow up to 60% of the USD value of the cryptocurrency you’ve deposited.

The benefit of borrowing cryptocurrency on C.R.E.A.M. Finance is twofold: first, no documentation needs to be provided beforehand; and second, there’s no time limit for repaying the loan.

Lending

C.R.E.A.M. Finance's lending feature is an exact replica of Compound Finance's. The only differentiating factor is that C.R.E.A.M. Finance supports more assets for lending and borrowing operations.

Liquidity Mining

The liquidity pools on C.R.E.A.M. Finance are identical to what Curve Finance delivers on its protocol. Users can stake cryptocurrency to earn nearly 200% yields which can be withdrawn at any time.

C.R.E.A.M. pools reward stakers with a part of the trading fees from C.R.E.A.M. Finance Swap, a decentralized exchange (DEX) on the protocol.

DEX-Like Services

C.R.E.A.M. Finance's developers describe the protocol's Swap feature as “a fork of Balancer with a Uniswap-like front end.” Swap imitates both protocols, relying on the ratio of two assets in a pool to determine price, rather than using an order book as a centralized exchange does.

DAO Governance

Developers have announced that C.R.E.A.M. Finance will be transitioning to a decentralized autonomous organization (DAO), giving complete governing power to the community's token holders.

Automated Market Maker (AMM) Protocols

C.R.E.A.M. Finance developers have come up with a unique version of an AMM, called CreamY, to enable high-liquidity swaps of crypto assets with equivalent value. Users get a cut of the trading fees on the platform each time they deposit liquidity.

Key Features

Let's look at some key features of C.R.E.A.M. Finance.

C.R.E.A.M. Finance Liquidity Mining

Liquidity mining is a supplementary and sophisticated means of profiting from the platform. Users can choose from various pools and earn stakes using their tokens.

Trading these tokens throughout the platform also returns a small transaction fee to the creator, offering incentives for participants to generate new entries. The main purpose of this mechanism is to ensure that traders have enough liquidity to swap between their holdings.

C.R.E.A.M. Finance Swap

The Swap feature was introduced soon after C.R.E.A.M. Finance was launched, transforming the platform into an AMM as a result of the upgrade.

C.R.E.A.M. Finance Swap allows users to swap commodities at rates determined by the current/ongoing size of asset pools, rather than a centralized rate card. This means that if other users lend, buy or borrow cryptocurrency from the pools, the valuation of one's holding token will vary. C.R.E.A.M. Finance Swap can be thought of as an investment whose value will fluctuate based on the pool size of the underlying asset.

C.R.E.A.M. Finance Cryptocurrency Wallets

C.R.E.A.M. Finance is an Ethereum-based platform, so it can interact with any Ethereum wallet. The platform is compatible with both Web 2.0 and Web 3.0 wallets, but the latter are preferable since they’re secure, noncustodial, and don’t require KYC (know your customer) or AML (anti-money laundering) processes.

Individuals can utilize the appropriate wallets which are operational in their region, depending on location. Users should do thorough research before settling on a wallet suited for long-term storage.

ERC20 tokens, which serve as the foundation of C.R.E.A.M., can be saved in any Ethereum wallet.

Staking C.R.E.A.M.

C.R.E.A.M. Finance allows users to stake C.R.E.A.M. tokens. The projected APY varies, depending on how long you're willing to bet your tokens. During this time, cryptocurrency tokens are locked, and stakers cannot trade or vote with them.

While staking cryptocurrencies may seem like a great way to make passive income, it’s definitely not risk-free. For instance, C.R.E.A.M. investors could lose money if the market value of C.R.E.A.M. Finance were to drop beyond the interest accrued. For instance, if the valuation of the C.R.E.A.M. token were to drop by 50% each year, a 30% APY wouldn’t be enough to compensate for the losses.

Borrowing and Lending

Lending and borrowing are two major activities frequently utilized by traders of all experience levels on any digital asset exchange service. Due to its structure on the Ethereum blockchain, C.R.E.A.M. Finance can be regarded as an virtual computer, allowing members to earn money on assets loaned out to borrowers.

The C.R.E.A.M. Finance app also has a simple layout that clearly displays the assets supplied and borrowed, thus simplifying the process of lending and borrowing crypto assets.

Users can look at real-time rates for the large array of authorized assets by visiting the supply or the borrowing market. Borrowers must also keep in mind that if the exchange rate of their security falls beneath their relative amount borrowed, it will be liquidated.

C.R.E.A.M. Tokenomics

C.R.E.A.M.’s tokenomics are reasonably straightforward —  the CREAM token can be used to lend, borrow, invest, and administer the network by voting on investments to support or remove.

Here's how CREAM tokens are distributed:

10% (900,000) will go to the core C.R.E.A.M. Finance team and advisers, with 75% vesting over four years and a six-month cliff. Seed investors will use 10% with a one-year cliff and four-year vesting. Moreover, around 1.8 million (20%) CREAM will be used to reward liquidity providers or for liquidity backstop. The remaining tokens — about 5.4 million, which is 60% — are to be used for governance.

Source: CoinMarketCap

As of this writing, the price of a CREAM token is $53.12, with a trading volume of close to $9 million in the last 24 hours. C.R.E.A.M. Finance has a live market cap of about $33 million, a circulating supply of more than 600 thousand tokens and a total supply of almost 3 million CREAM coins.

C.R.E.A.M. Price History

C.R.E.A.M. Finance was developed in late 2020 with a distinct range of attributes and functionalities, using the best practices of previous protocols and systems and addressing their limitations. Thanks to its growing liquidity pools, C.R.E.A.M. Finance has now become a protocol capable of revolutionizing the decentralized financial system.

According to CoinMarketCap, the CREAM token's price increased by about 300 percent, from about $70 on August 29 to $280 on September 10, during the first peak in September 2020. The introduction of the C.R.E.A.M. Swap and the publication of a newer beta version of liquidity mining drove its price up. Afterwards, C.R.E.A.M.’s value dipped 10% from its ATH due to coordinated selling.

The CREAM token price reached an all-time high in February 2021, marking its second peak. Its cost increased over 300 percent, from $70 on January 12 to $310 on February 4. While an announcement of its Asset Cap sparked the price surge, the introduction of SushiSwap and Uniswap liquidity pool tokens as security for lending and borrowing on C.R.E.A.M. propelled its price even higher. Following reports of a subsequent hacking attack that led to the loss of $37.5 million, C.R.E.A.M.’s price dropped to less than 35% of its peak.

Is C.R.E.A.M. Finance a Good Investment?

Since its inception, C.R.E.A.M. Finance has maintained an impressive track record and steady growth. With certain collaborations and innovations, C.R.E.A.M. has the potential to expand its user base and scope for adoption.

The current price of C.R.E.A.M. is $57.05. According to price predictions on TNL, the price of C.R.E.A.M. may hit $71.81 within a year, $216.06 in five years, and $1,294.15 in the next decade.

Today, C.R.E.A.M. Finance is a multi-utility platform from which anyone can profit. Apart from its ecosystem and use cases, the project's growth also depends on external factors such as public interest, international/local regulations and the changing crypto environment. If you’re thinking of investing in C.R.E.A.M. Finance, please do your own research (DYOR) and monitor the project's performance before making your decision.

Buying C.R.E.A.M.

To begin trading or buying C.R.E.A.M. with Bybit, follow the steps below:

  1. Log in to Bybit with your verified account. If you don't have an account yet, create one by following this guide. After that, visit the Fiat Gateway.
  2. Select your preferred currency from the dropdown list. Then, enter the amount you wish to spend or the quantity of CREAM tokens you want to buy.
  3. Choose your preferred payment option. Bybit accepts all major payment options, including Visa/Mastercard credit and debit cards, electronic funds transfer, and cash deposits.
  4. Wait for your transaction to be completed. Your funds will arrive in your account shortly.
  5. Next, select the trading pair you want to trade in the Market zone. Enter the specific trading pair in the search box — in this case, C.R.E.A.M./USDT.
  6. Select Limit Order or Trigger Order per your requirements. Input the quantity, or use the % slider to decide how much to buy. 
  7. Fill in your desired trigger price, amount price or order.
  8. To complete the order, click on Buy.
Trade CREAM on Bybit now!

Closing Thoughts

C.R.E.A.M. Finance is a critical component of the DeFi ecosystem, providing new use cases and techniques for getting a higher yield from each protocol's "product." Overall, C.R.E.A.M. Finance has done a superb job of unifying its services and making them available on a lending platform that's accessible to the masses.