sTokens:
When capital sources deposit funds, they receive sTokens, which represent their stake in the loan portfolios. These sTokens automatically align with the underlying asset, such as sETH or sUSD, depending on the deposit (e.g., sETH for ETH deposits). sTokens accrue interest automatically based on borrowing activity within the protocol and can be redeemed at any time for the underlying asset plus accrued interest.
Unlike protocols like Compound, where interest accrues only upon interaction with the protocol, Sivo DeFi compounds interest continuously. Additionally, capital sources in Sivo DeFi earn an arrangement fee for every loan funded, which is automatically added to their balance and accrues interest along with the principal deposited.
sTokens represent a capital source's stake in Sivo DeFi, allowing seamless integration with other decentralized applications within the broader DeFi ecosystem. This composability enables sTokens to be used beyond earning interest, facilitating the creation of more advanced financial products and offering greater versatility to capital sources.
sTokens are built on ERC standards, ensuring compatibility with the broader Ethereum ecosystem, including wallets, exchanges, and other decentralized applications.
Network Credit Tokens (NCT)
Network Credit Tokens (NCTs) are central to Sivo DeFi, issued by both the protocol and originators, serving as tokenized collateral and a mechanism for rewards and staking. The network’s governance token is SVO. Beyond their role as collateral, originators have the autonomy to decide how to utilize their NCTs.
Tokenized Collateral: SVO, along with originator NCTs, forms one of the four collateral layers supporting capital pools. Additional details on collateral are provided later in this paper.
Rewards: Stakeholders, including validators, capital sources, developers, and partners, are rewarded with SVO for their contributions to network security, transaction validation, capital provision, and infrastructure development and maintenance. Rewards are discussed later in this paper.
Staking: Validators stake SVO to participate in the consensus process, aligning their incentives with the network’s stability and security.
NCTs are built on ERC standards, ensuring compatibility with the broader Ethereum ecosystem, including wallets, exchanges, and other decentralized applications.
Governance Token (SVO)
SVO is the network's governance token and serves several key functions within the Sivo DeFi ecosystem, with its primary utility being tokenized collateral and supporting the security of the network:
Collateral: Acts as one of four tiers of collateral, with an equal amount of SVO locked alongside the originator’s NCTs.
Collateral Valuation: Aids in market-driven collateral valuation on decentralized exchanges (DEXs).
Rewards: SVO is used to reward validators and other active participants in the network for their contributions.
Capital: Both capital sources and originators receive SVO as a reward for their participation in the network.
Network Activities: SVO must be held for various network-based activities, such as staking by validators and capital inflow prioritization.
Endpoint Leasing: Developers integrating regional extensions, such as verification services and local payment methods or bank accounts, pay a monthly fee in SVO to lease these endpoints.
Payment of Fees: SVO is also used to pay for all network-related fees.