Question 1

What is Strike (STRK)?

Accepted Answer

Strike is a decentralised finance (DeFi) protocol that operates on the Ethereum blockchain, providing a platform for users to lend, borrow, and earn interest on their cryptocurrency assets. Users can supply supported cryptocurrencies to liquidity pools and, in return, receive sTokens, which represent their stake and accrue interest. These sTokens can also be used as collateral to borrow other cryptocurrencies. The protocol uses smart contracts to automate transactions, ensuring transparency and eliminating the need for intermediaries.

Question 2

What is Strike (STRK) used for?

Accepted Answer

The STRK token serves as both a governance and utility token within the Strike protocol, with key functions including:

- **Governance**:  
   - STRK holders can propose and vote on protocol changes, such as adjustments to interest rate models, the addition of new supported assets, and updates to platform rules.

- **Incentives**:  
   - Users who supply or borrow assets on the platform are rewarded with STRK tokens, encouraging participation and increasing liquidity in the ecosystem.

- **Community-driven Development**:  
   - By integrating governance and incentives, STRK ensures that the protocol’s development and operations are actively shaped by its community of token holders.

Question 3

How does Strike work?

Accepted Answer

Strike operates through a series of smart contracts known as sTokens (e.g., sETH, sUSDC), which represent users' deposits in the protocol. When users supply assets, they receive corresponding sTokens that accrue interest over time. These sTokens can also be used as collateral to borrow other assets. The protocol's risk management is handled by the Comptroller, which determines collateral requirements and monitors the health of users' positions to prevent under-collateralisation.

Question 4

How are interest rates determined in Strike?

Accepted Answer

Interest rates in Strike are algorithmically determined based on the supply and demand dynamics of each asset within the protocol. As more users supply or borrow a particular asset, the interest rates adjust accordingly to maintain market equilibrium. This mechanism ensures that the protocol remains efficient and responsive to market conditions.