What is Orchai Liquid Staking

Orchai Liquid Staking is a liquid staking protocol built on Oraichain. It tokenizes staked ORAI and allows users to use it within Decentralized Finance dApps freely.

Why Liquid Staking

Oraichain is a Proof-of-Stake (POS) network that generates returns for users who delegate the ORAI token on validator nodes to secure the network. To do this, users are required to lock up the ORAI token for a predetermined time. This results in the lock up of capital, unable to be utilized within Decentralized Finance (DeFi).

Liquid Staking provides a solution for freeing up this locked up capital, creating greater capital efficiency within the Oraichain network. By tokenizing the staked ORAI into sORAI or scORAI, users will now be able to utilize the asset within Decentralized Finance dApps while earning passive returns from Oraichain staking itself.

The sORAI and scORAI assets provide developers and users with a wealth of strategies and options to build off of.

Reward

s[Token]/sc[Token] tokens accrue Token rewards, generated from delegation rewards of underlying ORAI delegations.

s[Token]

Holders can send a request to the s[Token] reward contract, which prompts the transfer of accrued rewards to their account.

sc[Token]

Rewards earned from staking will be automatically re-staked and accrue to the sc[Token] to earn compound rewards, thus increasing its value against Token.

For example, 1 sc[Token] can redeem 1 Token at the start. However, when staking rewards accumulate to sc[Token], it will steadily gain in value. If the Token staking APY is 30%, one year after genesis 1 sc[Token] is worth 1.3 Token.

Fee

The following direct fees are collected:

• Peg recovery fee: Only applies to s[Token] token. Slashing events decrease the s[Token] exchange rate, lowering the calculated value of a s[Token] token. The protocol applies a fee of 0.5%( configurable) to s[Token] mints and burns whenever the exchange rate is below 1, targeting a gradual recovery to a one-to-one peg.

• Maintenance fee: Only applies to sc[Token] token. This 2% fee is charged on the automatic compounding of rewards.

• Orchai operating costs fee. All accrued rewards are taxed at a configurable rate. The fee is set at 0% but can be increased later.

sAssets are liquid, tokenized representations of staked (bonded) assets PoS blockchain. They provide stakeholders with liquidity over their staked assets, allowing the locked value of staked assets to be used in financial applications.

In Orchai Liquid Staking, there are two types of sAssets:

• s[Token] (Staked Token)

• sc[Token] (Staked Compound Token)

With s[Token] and sc[Token], holders can earn block rewards while maintaining liquidity and fungibility.

The difference between the two tokens is how they manage the staking rewards:

• s[Token]'s rewards are sent continuously to a reward contract from which users can claim their rewards.

• sc[Token]'s rewards are compounded: Acquired rewards are re-staked, increasing the underlying amount of staked Token.

Concepts

Exchange Rate

There are exchange rates for s[Token] and sc[Token]. The exchange rate is the rate of conversion used when s[Token] (sc[Token]) is minted or redeemed. Defined as the amount of bonded Token per s[Token](sc[Token]) in existence, the value initially starts with 1, and decreases with slashing events.

Shared Slashing Risk

Usage

Minting

s[Token] (sc[Token]) tokens are minted by delegating Token via the Orchai Liquid Staking. The amount of s[Token] (sc[Token]) minted is dependent on the current s[Token] (sc[Token]) exchange rate. Minted s[Token] (sc[Token]) amounts will be greater than the s[Token] (sc[Token]) amount sent when the s[Token] (sc[Token]) exchange rate is below 1.

Redeeming

Any s[Token] (sc[Token]) holder can redeem their tokens for their underlying bonded Token. Redemption is a two-step process:

1. Requesting to unbond s[Token] (sc[Token]) .

2. Withdrawing undelegated Token.

Due to Oraichain's unbonding period, a complete redemption cycle requires at least 14 days to finish (16 days maximum) for sORAI and scORAI, at least 21 days to finish (24 days maximum) for scATOM

Price

The price of s[Token] (sc[Token]) depends on the s[Token] (sc[Token] exchange rate and the price of ORAI.

Since s[Token]exchange rate will always tend to be equal to 1, so the price of s[Token] will be the same as Token most of the time.

And because the reward obtained outweighs the slashing, the sc[Token] exchange rate will increase over time. The price of sc[Token] will continue to rise in comparison to the price of Token.

Token Contract Address

sORAI

Orai Scan URL

sORAI  = orai1w9ee6szd3fgatyz7v78rktekuqjntfeszh9azuz8drz9nl0yuzwqm26v23

scORAI

Orai Scan URL

scORAI = orai1065qe48g7aemju045aeyprflytemx7kecxkf5m7u5h5mphd0qlcs47pclp

scATOM

Orai Scan URL

scATOM = orai19q4qak2g3cj2xc2y3060t0quzn3gfhzx08rjlrdd3vqxhjtat0cq668phq

The Stake page enables users to easily interact with sORAI and scORAI. Through this page, users can stake ORAI to get sORAI/scORAI, unstake sORAI/scORAI to get ORAI, claim sORAI rewards and convert sORAI to scORAI and vice versa.

Convert

1. Navigate to the Stake page and click the [Convert] button.

1. Click the double arrow button to select the type of token you want to convert to.

1. Enter amount of token to convert.

4. Click the [Convert] button to confirm.

1. Convert complete

To prohibit borrowers from defaulting on their loans, Orchai liquidation contract liquidates all loans with a borrowing amount above the borrowing limit ($borrowCapacity$ is higher than 100%)

Orchai liquidation mechanism is Auction Liquidation, in which participants bid against each other to become a liquidator. Bids with matching liquidation discounts are pooled together in a liquidation pool to have the same execution priority. Pools with lower discounts are given a higher execution priority, thus being executed first during liquidation events. This system enables liquidators to buy Orchai collateral at the desired liquidation discount.

Conversions between whitelisted sAssets and USDT are facilitated using the Oraichain Oracle Price Feeds as the reference price feed.

When liquidating, bids are processed in ascending order of premium rate from the liquidation pools. The lowest premium bids are completed first, and this process is repeated until all of the requested liquidation amounts have been fully consumed. The collateral that is liquidated is credited to the liquidator, available for later withdrawal.

Liquidated collaterals are credited proportionately to each bidder's share of the bid amount as bids with the same premium slot are combined.

To safeguard borrowers, all liquidations are partial liquidations.

Loan positions with $borrowCapacity$ of 80% or below are recommended.

Because smart contracts are message-driven, liquidation can only occur when triggered by an external party. Keepers are given 0.1% of the liquidated value as an incentive to actively monitor harmful loans and trigger liquidations.

Before being liquidated, money in the liquidation pool is not used for anything, leading to unprofitable. To optimize liquidity and attract liquidators, part of the money in the liquidation pool is deposited back into the protocol to earn lending yield. This yield is being divided equally among all participants in the pool. So liquidators not only earn liquidation bonuses when liquidating but also earn lending yield when waiting for a chance to liquidate.

To prevent the situation in which the liquidator is unable to take funds from the liquidation pool because the borrower has borrowed all of the funds in the Orchai Money Market. Orchai liquidation mechanism only sent half of the funds, so liquidators can only earn about 50% to 60% lending yield compared to lenders.

Users can become lenders by depositing their preferred asset that is accepted by the protocol. Deposits can be withdrawn anytime unless every token in a market is borrowed.

Lending interest is distributed through the value appreciation of oToken, which is minted to lenders as a deposit receipt.

oToken

oToken balances represent a depositor's share in the market. The exchange rate with their underlying token, the oToken exchange rate, increases as deposits accrues interest, appreciating the value of oToken. With time, holders can redeem oToken with a greater number of underlying tokens, enabling depositors to collect interest simply by holding them.

The oToken exchange rate at time $t$ is defined as:

Where $totalDeposited(t)$ and $totalBorrowed(t)$ is the amount of money sent into the system and amount of money borrowed by the borrower at time $t$. A share of the protocol’s interests is allocated to a collector contract from the ecosystem treasury, saved to the parameter $reserves(t)$.

As the market’s total borrowing balance increases (as a function of borrower interest accruing), the exchange rate between oToken and the underlying asset increases.

The amount of oToken a user receives when depositing underlying asset is calculated using the $oTokenExchangeRate$ value using the formula below:

And amount of underlying asset user receives when oToken is calculated as below:

Lending Interest Rate

The equation above simply means that all income received through lending, after a small portion is subtracted to deposit into the system's reserve, will be split equally among lenders.

The lending interest rate $L(t)$ at time $t$ can be re-expressed by the following formula:

Where $U(t)$​ is utilization rate and $B(t)$​ is borrow rate at time $t$ and $r$ is reserve factor.

Orchai Money Market is an Anchor-inspired lending protocol that enables depositing and borrowing of stablecoins. Lenders have the ability to deposit their stablecoins to earn interest, while borrowers can borrow in an over-collateralized manner.

Orchai Money Market is permissionless to use and allows DeFi users to:

Orchai’s main objectives are security, capital efficiency, and user experience. Hence, instead of being able to borrow any asset from a pooled set of assets, Orchai users will only be able to borrow one stablecoin, which is USDT. This is also known as a single borrowable asset

Loan To Value (LTV)

The maximum that can be borrowed on a particular asset.

Reserve Factor

The percentage of the borrower's interest accrues to Orchai protocol and can be withdrawn through governance.

Interest Rate Model

Orchai's interest rate model dynamically adjusts the interest rates of each asset market depending on the utilization rate. A high ratio would incur higher interest payments from borrowers, and consequently higher interest payments to suppliers, thereby encouraging suppliers to add more assets to the protocol and ensuring healthy levels of available liquidity.

Interest Rate Model is based on the following parameter:

Borrowing Interest Rate and Lending Interest Rate can be illustrated in the following chart:

Orchai Liquid Staking applies an artificial intelligence model to choose the best validators from the Oraichain ecosystem. This method utilizes a validator scoring algorithm to maximize user returns while maintaining that funds are delegated equally throughout the network validators. While selecting top network validators, the program focuses three important factors:

APR

The APR earned by delegating to validators on Oraichain depends on Commission Rate. We prioritize validators who charge a low commission, ensuring that a larger portion of staking rewards goes to users.

Security

When staking to validators on Oraichain, users run the risk of being slashed but if a validator they’re staking to is slashed or jailed. With this in mind, Orchai Liquid Staking considers the following metrics while selecting our validator set:

Historical Slashing Instances

Slashing results in the jailing of a validator, meaning the user needs to proactively unstake and restake to another validator. In this case alone, the user would lose a minimum of a week’s worth of rewards. This is why we select validators with the minimum number of slashing instances over the past year.

Uptime

This is a key metric to ensure that the validator doesn’t miss block production (also rewards). We use validator uptime figures from the past 6 months to determine the most consistent network validators.

Network Decentralization

Oraichain's network relies on decentralization for Proof Of Stake to work. The way Oraichain processes and approves transactions relies on stakes being spread across a wide range of validators. The more diverse and decentralized stakes are, the better for the health of the network overall. There is a risk inherent in everyone choosing the most popular validator to stake their coins with: if the majority of coins end up staked with a small number of validators it can lead to a network halt, where inbuilt protections on the integrity of transactions stop working. Instead, for the sake of the network, it makes sense to spread stakes out across a far greater number of validators to prevent the likelihood of a halt or intentional attack.

To enhance the chain's decentralization, Orchai Liquid Staking will distribute stakes to small validators. However, top-ranked validators will not be excluded. This is because some top-ranked validators do a lot for the ecosystem, and deserve delegations.

Tokens can be borrowed from the money market by creating a loan position with whitelisted sAssets as collateral. An account can only own a single loan position, though a user may create more loan positions with the use of multiple accounts.

sAssets collaterals are locked to open a loan position. Users are allowed to lock multiple sAsset types to a single position, diversifying collateral price exposure

Borrow Limit

Borrows can be made until the user's liability reaches their position's borrow limit. The borrow limit is yielded as the sum of locked collateral value, times the maximum LTV ratio of collateral:

One should observe that the borrow limit fluctuates with the oracle-reported sAsset price. Loan positions with a liability higher than their borrow limit are subject to liquidation, where their collaterals are converted to stablecoins to repay their liabilities.

To prevent liquidation, borrowers can lock additional collateral to their position and increase their borrow limit. Collaterals can also be unlocked and withdrawn from a loan position, as long as the borrower's liability does not exceed the position's borrow limit.

Borrowing Interest Rate

Tokens borrowed from a market all follow a unified, algorithmically determined borrow rate. The applied borrow rate constantly adjusts based on the market supply and demand, set to increase as a function of the utilization ratio.

Utilization Rate

Utilization Rate $(U)$ is an indicator of the availability of capital within the pool, at time $t$ is caculated as:

A high utilization rate indicates that a lot of borrowing has occurred, while a low ratio indicates the opposite.

The interest rate model manages liquidity risk in the protocol through user incentives to support liquidity:

• When capital is available: low-interest rates to encourage borrowing.

• When capital is scarce: high-interest rates to encourage repayments of debt and additional supplying

Interest Rate Model

Interest Rate Model tends to be a cost-effective way for the Pool to run itself. The parameters of the pool will aid in the adjustment of borrow and deposit rates to a balanced and reasonable point.

If Utilization Rate approaches 100%, there will be a scarcity of tokens in the Pool. The borrower will be unable to borrow at this time, and the lender will be unable to withdraw funds from the Pool. To avoid this, the interest rate curve is split into two parts around an Optimal Utilization Rate$(U_{optimal})$. Before $U_{optimal}$ the slope is small, after it begins rising sharply.

Specifically, the borrow interest rate $B(t)$ is defined by:

• If $U(t) < U_{optimal}$ then $B(t) = B_0 + \frac{U(t)}{U_{optimal}}B_{slope1}$

• if $U(t) > U_{optimal}$ then $B(t) = B_0 + B_{slope1} + \frac{U(t) - U_{optimal}}{1-U_{optimal}}B_{slope2}$

The interest rates have a kink in them: they sharply change at a certain point. A variety of protocols use interest rates like this, including Aave and Compound. As users mint, redeem, borrow, repay, or liquidate tokens, the interest rate changes with the utilization rate $U_t$. As a result, it's also known as a variable interest rate.

Borrowing capacity

Borrowing capacity of a loan position is a ratio that indicates the user loan position's liquidation riskiness, which is calculated as the following formula:

To improves user's collateral safety and borrow position, user can:

• Repay a portion or the full amount of the borrowed amount

• Provide more collateral

Bid

1. Select sAssets to bid.

2. Choose the desired Premium to bid.

3. Input the amount of USDT to bid.

4. Click on [Place My Bid].

5. Bid complete.

6. Your bid will be shown at My Bids.

Cancel Bid

1. Click on [Cancel].

2. Input the amount of USDT to be retract and click on [Withdraw].

3. Cancle bid complete.

Claim lending yield

1. Click on [Claim].

2. Claim complete.

Withdraw sAsset

1. Click on [Withdraw].

2. Withdraw complete.

The Borrow Page can be used to borrow tokens from Orchai. The protocol requires users to provide sORAI/scORAI as collateral before making a loan.

Borrows can be made until the loan's borrowing usage reaches the borrowing limit, calculated based on their prices, and deposit amount. Loans with a borrowing usage higher than the borrowing limit can be liquidated. Thus it is important for borrowers to closely maintain their borrowing usage as changes in collateral prices may occur.

The Borrow page displays:

• Collateral Value: Total value of all collaterals provided by the user.

• Borrowed Value: Total value of USDT borrowed by the user.

• Available Borrow: Total value of USDT that the user can borrow.

• Borrowing Capacity: Ratio value that signals the user loan position's liquidation riskiness. Calculated by dividing the user's borrowed value by their borrow limit. (Borrow Limit = Borrowed Value + Available Borrow)

• Borrow APR: Borrow annual percentage rate (APR) on borrows from both Interest APR and Distribution APR. (Borrow APR = Distribution APR - Interest APR)

  • Interest APR: Current APR of borrow interest.

  • Distribution APR: Current APR of ORCHAI distribution to borrowers.

When the Borrow APR is positive, ORCHAI rewards distributed to borrowers are greater than the interest to be paid for the loan

Providing collateral

1. Clicking [Provide] to use sORAI/scORAI as collateral.

2. Enter the amount of sORAI to provide. Click the [Provide] button to confirm.

Borrowing USDT

1. Click [Borrow].

2. Enter the amount of USDT to borrow. Click the [Borrow] button to confirm.

3. Borrow complete

Repaying borrowed USDT

1. Click [Repay].

2. Enter the amount of USDT to repay. Click the [Repay] button to confirm.

Withdrawing sORAI collateral

1. Click [Withdraw].

2. Enter the amount of collateral to withdraw. Click the [Withdraw] button to confirm.

Participate in Liquidation

1. Clicking [Participate in Liquidation] to be a liquidator.

The My Page provides an overview of lending and borrowing.

This page allows users to claim rewards from sORAI, collateral sORAI, and ORCHAI distribution rewards.

The My Page displays the following data:

• Lend Balance: Total value lent by the user, including accrued lending interest.

• Borrow Balance: Total value borrowed by the user, including accrued borrowing interest.

• Net APY: The Net APY shows the APY over all assets lent and borrowed by the user.

Claim collateral sORAI reward

1. Clicking [Claim] to claim sORAI as collateral reward.

2. Claim complete

Staking

1. Input the desired amount of ORAI to be staked.

2. Click on [Stake].

3. Stake complete.

Unstaking

1. Input the desired amount of sORAI to be unstake.

2. Click on [Unstake].

3. Request unstake complete.

4. Your request will be shown in Unstake requests.

5. ORAI will be claimable after 14-16 days and will be shown in Withdrawable. Click on [Withdraw] to receive ORAI.

Claiming accrued sORAI rewards

To claim ORAI accrued by sORAI on Orchai protocol:

1. Click on [Claim].

Staking

1. Input the desired amount of ORAI to be staked.

2. Click on [Stake].

3. Stake complete.

Unstaking

1. Input the desired amount of scORAI to be unstake.

2. Click on [Unstake].

3. Request unstake complete.

4. Your request will be shown in Unstake requests.

5. ORAI will be claimable after 14-16 days and will be shown in Withdrawable. Click on [Withdraw] to receive ORAI.

Decentralized Finance (DeFi) has been a rapidly growing sector within the cryptocurrency and blockchain industry over the past few years. Up to now, DeFi ecosystem has developed and evolved with diversified service layers including lending and borrowing, trading, and asset management. Therefore, DeFi users usually interact with more and more protocols to obtain their investing goals. According to our survey, people use at least three protocols on average for their DeFi transactions.

However, navigating between protocols poses 2 big problems for users:

• Time-consuming

• Overloaded management

Several user-friendly applications have recently emerged to solve these problems. They provide drag-and-drop interfaces, pre-built templates, and other tools that make it easier for users to create custom transactions, cutting down complicated and repetitive steps.

Currently, this new trend however still has some limitations. Firstly, the chains it supports are limited. Secondly, it is easy for users to create many custom transactions, however, it is hard for them to compare and assess which set of transactions will work best for their investing strategy.

Our solution (the low-code DeFi management powered by AI)

Orchai launched the low-code DeFi management to bridge the gap in the market and solve the pain points of DeFi users.

The low-code trend in DeFi refers to the growing trend of using software development platforms that allow users to create applications with drag-and-drop interfaces, pre-built templates, and other tools.

Orchai applies the low-code to DeFi management, allowing DeFi users to devise their own customizable transactions with 2 key features:

• Cross-chain: The platform provides users with an all-in-one solution for interacting with multiple dapps on different chains, featuring a drag-and-drop UI that makes it easy and intuitive to create customizable transactions.

• AI application: The AI algorithms are applied to provide users with personalized recommendations for investment strategies and automate specific actions based on market fluctuations or users' profiles on DeFi protocols.

Moreover, Orchai also provides a comprehensive solution for users with protocols that help users optimize asset flow and low-code DeFi management features that help devise the most efficient investing strategy.

Orchai is a Decentralized Finance (DeFi) platform, built on Oraichain. The Orchai ecosystem consists of 2 big sections:

1. Low-code DeFi management features

2. Asset-flow optimizing protocols

Orchai aims to become a DeFi Orchestrator powered by AI. That means Orchai will become a DeFi hub platform, providing a set of multiple protocols and features, which assist users not only in optimizing the asset flow but also in improving the management & investing strategy.

Our focus is on developing features for low-code DeFi management that will be seamlessly integrated in the near future, enabling users to optimize their investment strategies with ease and efficiency.

The roadmap of Orchai

Orchai's roadmap consists of three main phases, with the ultimate goal of becoming a DeFi orchestrator powered by AI.

• Phase 1: The first phase involves the development and launch of Orchai's protocols, Orchai Lending, and Orchai Liquid Staking, which provide users with decentralized lending and staking options while maintaining liquidity.

• Phase 2: In the second phase of development, Orchai is focusing on creating its main protocol, the DeFi Orchestrator, which leverages AI to provide users with valuable insights and suggestions for managing their DeFi operations. With the DeFi Orchestrator, users will be able to access and manage multiple DeFi protocols from a single interface, streamlining the management process. Orchai plans to initially integrate low-code DeFi management on Oraichain, with plans to expand to other chains in the future.

• Phase 3: In the third phase of development, Orchai plans to expand its offerings to support DApps on the Cosmos chain as its first target, followed by EVM-based blockchains. This expansion will enable users to leverage a wider range of DeFi protocols and take advantage of additional opportunities in the rapidly growing DeFi space.

The low-code DeFi management features are easy-to-use and customizable features that help users manage and transact with different protocols and on different chains.

Orchai is currently developing many features for low-code DeFi management. Initially, Orchai will launch the first 3 features in 2023 as follows:

Combinator

The combinator feature enables users to execute multiple actions in a single transaction, either by creating custom recipes or using pre-made templates.

Orchai designed this feature to help users manage their portfolios more efficiently and to suggest optimal recipes based on their investment objectives and market conditions

What are the benefits of using Combinator?

• Helps users save time by reducing the need to switch between different DApps.

• Enable efficient portfolio management.

• Provide AI-powered recommendations for optimal strategy.

Auto Trader

Auto Trader is a feature that enables users to automate their investment strategies based on market fluctuations or their profile at DeFi protocols.

The target of this feature is to help users to take advantage of market opportunities and avoid losses due to market volatility.

What are the benefits of using Auto Trader?

• Allow users to take advantage of market opportunities and prevents losses due to market volatility

• Automatically provide more collateral to prevent liquidation.

Alert Hub

Alert Hub is a feature that provides real-time updates on market prices and personalized notifications about users' investment portfolios. The target of this feature is to keep users informed and help them make informed decisions about their investments

What are the benefits of using Alert Hub?

• Keep users informed of significant price changes and alert them when they are close to being liquidated,

• Enable users to make informed decisions about their investments even if they're not actively monitoring the market.

The asset-flow optimizing protocols are ones that help users optimize their asset flow via liquid staking and lending market. There are currently 2 protocols which are Orchai Liquid Staking and Orchai Money Market.

Oraichain is a Proof-of-Stake (PoS) network that incentivizes returns for users who assign the ORAI token on validator nodes to assure the network.

Orchai Liquid Staking is built on Oraichain with the purpose of tokenizing the staked ORAI and allowing users to freely utilize it in Decentralized Finance dApps.

In Orchai Liquid Staking, the unique feature is users have the right to choose their preferred liquid staking strategy.

sAssets are tokenized representations of staked assets in a PoS blockchain. Like the basic staked asset, sAsset grants the holder block rewards. On the other hand, sAsset is different from the staked asset because of being both transferable and fungible at the same time. Therefore, users can transact with sAssets as easily as they do with the underlying PoS asset. In Orchai Liquid Staking, there are two types of sAssets: sORAI and scORAI.

sORAI

In Orchai, staked ORAI in the Orchai protocol will be called sORAI. After users stake ORAI in the Orchai protocol, Orchai Liquid Staking will give them back sORAI as the tokenized version of ORAI with equal value and functions. By implementing this mechanism, Orchai will ensure the benefit of users in receiving staking rewards and maintaining the utilization of the sAssets in Decentralized Finance dApps. The rewards from this option can be withdrawn at any time.

scORAI

Orchai also implements automatic compounding of staked ORAI at a fixed frequency. With this mechanism, users can enjoy the benefits of no manual input. Therefore, they can receive the compound rewards (from staking ORAI and from staking the rewards) with less effort and gas fees spent on staking the rewards.

The difference between sORAI's and scORAI's mechanism is that in scORAI mechanism, the rewards earned from staking will be automatically re-staked to earn compound rewards. The rewards in this mechanism can only be withdrawn by unstaking scORAI, which takes a minimum of 14 days to process.

The Implementations of Liquid Staking Tokens (sORAI and scORAI)

After receiving sORAI or scORAI, users can freely use them for different purposes. This can open the door to multiple opportunities, such as providing liquidity to DEXs, doing leverage staking or taking out a loan from a lending protocol such as Orchai Money Market.

Integrate with DEXs

As you might have already known, DEXs have many liquidity pools where users can swap CW-20 tokens. sORAI and scORAI are also CW-20 tokens, which means that they can be deposited into DEXs with the purpose of providing liquidity for pools. Hence, users can earn LP rewards generated from swapping fees on DEX.

Integrate with Lending Protocols

sORAI and scORAI can be utilized in lending protocols to provide liquidity to lending pools to earn interest or be utilized as collateral to borrow.

Leverage Staking

Users can stake ORAI and get sORAI or scORAI, then use them to borrow some other supported tokens and exchange them to ORAI, and stake them in the Orchai protocol again to have more sORAI and scORAI to continue the cycle. By doing this, users can receive higher staking returns but also a considerable amount of liquidation risk.

Besides the main advantages above, with sORAI and scORAI, users can enjoy many other utilities in Orchai protocol and others.

Orchai leverages AI technology to provide users with valuable insights and suggestions for managing their DeFi operations, which is achieved through its main protocol, the DeFi Orchestrator. The AI algorithms analyze market conditions and user behavior to provide personalized recommendations for investment strategies, suggest the most effective and optimal strategy based on users' investment objectives, and automate specific actions based on market fluctuations or users' profiles on DeFi protocols.

Orchai's AI models are trained on a diverse range of data sources, including historical market data, user behavior data, and external data sources. These models analyze the data to identify patterns and trends in the market, and use this information to provide valuable insights and suggestions regarding future market movements

The AI models are constantly learning and improving, as they receive feedback from user behavior and market performance. This allows Orchai to provide increasingly accurate and effective recommendations to its users over time.

For Orchai Liquid staking

AI can be applied to select the best validators within the Oraichain. This strategy uses a validator scoring mechanism to find the highest yield for our users while ensuring that funds are delegated across the top network validators, by base on two major aspects: APR and Security.

For Orchai Money Market

a. Asset Evaluation and Management By evaluating and managing the digital assets in Orchai, all statistics about holders, transactions, total supply, etc., will be calculated. Based on these analyses, AI models will evaluate and adjust the parameters, including LTV, Liquidation Threshold, etc.

b. Interest Rate Management In the Interest Rate Management process, the industry macro analysis, assets flow analysis, and DEFI services, lending will be operated. With those analyses, the interest rate parameters in Orchai will be calculated to contribute to the stability of the protocol and benefit the users.

c. Risk Management Risk management is to balance Capital Efficiency and Risk to the protocol. The protocol increases Capital Efficiency to a maximum, considering that the amount of risk in the system doesn’t increase significantly. This will ensure that the risk is still in control.

d. Deflation Mechanism The mechanisms of the Orchai incentives program and staking program will be applied in the Orchai ecosystem. Therefore, Orchai and Oraichain’s assets flow analysis will help evaluate and build the Deflation Mechanism, and Oraichain’s analysis of Inflation/Deflation will bring sustainability to users.

e. Credit Score Evaluation Though an effective tool in lending, credit score has never been used in existing decentralized lending platforms. As a pioneer, the Orchai protocol uses AI to evaluate credit scores for users and their digital assets. With this, the system can reduce the lending risks by defining a credit-score threshold for borrowers participating; and stimulate borrowing by specifying a high Loan to Value ratio for borrowers with high credit scores.

Orchai.io is a low-code DeFi platform that provides an ecosystem of different protocols and features powered by AI, which aims at the 2 ultimate goals:

• Improving the management & investing strategy: with 3 low-code DeFi features of Alert Hub, Combinator & Auto Trader;

• Optimize asset flow: with the 2 protocols Liquid Staking & Money Market.

OCH is the utility token of the Orchai low-code DeFi platform that is based on Oraichain’s CW20 standard.

OCH Listing

• Price: $0.4 / OCH.

• Exchanges: Oraidex & Uniswap.

• Date: 2PM UTC, February 22, 2024.

OCH Utilities

Orchai token is used with 4 main objectives:

1️⃣ Co-Harvest: Taking after OraiDEX model, Co-Harvest is an innovative auction mechanism that allows participants to bid with OCH tokens for discounted stablecoins.

2️⃣ Reward: Token holders can earn rewards from using our products & services. xOCH is the reward token of Orchai: 1 xOCH = 1 OCH, and can be converted at a 1:1 ratio.

3️⃣ Payment: OCH can be used to pay fees for using products and services of Orchai (including 2 protocols and 3 low-code DeFi features).

4️⃣ DAO Governance: Orchai's operations will be decided by voting by OCH holders, and governance members will share in the profits from our features and protocols.

OCH Allocation

Total Supply is capped at 20,000,000 OCH tokens with an initial market cap of $200,000.

The distribution of OCH will be in line with a long-term vision and sustainability for Orchai project. The entire Orchai team has discussed carefully to launch this tokenomics with confidence in our future and capabilities. We also care deeply about the community, which everyone knows is the main core for further development. For those reasons, Orchai has decided that OCH will be distributed to 3 components as follows:

• Ecosystem: 60.0%

• Development: 35.0%

• Community Pool: 5.0%.

OCH Circulating Supply

Orchai tokenomics aims at a trusty commitment and sustainability as well as supporting for the long-term vision of Orchai low-code DeFi Platform. The token will be released gradually over time within 5 years, following a vesting period schedule designed to avoid supply shocks and secure the token value.

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Orchai is a DeFi hub platform that contains an ecosystem of different protocols and features powered by AI, which aims at the 2 ultimate goals:

1. Improving the management & investing strategy

2. Optimize asset flow

At the present, we are providing 2 protocols "Liquid Staking" & "Money Market" to help users optimize asset flow and three features for low-code DeFi management are on the way to be launched.

Our team will continue to strategically deploy new features that match the community's interest, and meet the demand of users. We listen to users and the community to grow and aim at the ultimate goal of sustainable development and success as well as bring true value to the community.

The smart contracts of the Orchai protocol have undergone a comprehensive audit by Trufy.

In addition to this, Orchai ran bug bounty programs to further enhance the security of the protocol.

The Lend page provides a lending interface to earn a yield on lending USDT. It allows users to deposit and withdraw USDT, and track their current deposit value and current deposit annualized percentage rate (APR), and amount of interest earned.

The Lend page displays the following data:

• Total Balance:

  • In wallet: Total amount of USDT in the user wallet.

  • In protocol: Total amount of USDT lent by users, including accrued lending interest.

• Lend APY: The annualized rate of current interest on lending.

Depositing USDT

1. Navigate to the Lend page and click the [Deposit] button.

2. Enter the amount of USDT to deposit and click the [Deposit] button to confirm.

Withdrawing USDT

1. Click the [Withdraw] button.

2. Enter the withdraw amount and click the [Withdraw] button to confirm.

Orchai Money Market is an Anchor-inspired lending protocol that enables depositing and borrowing of stablecoins. Lenders have the ability to deposit their stablecoins to earn interest, and borrowers can provide their sAssets as collateral to borrow stablecoins.

Orchai’s main objectives are security, capital efficiency, and user experience. Hence, instead of being able to borrow any asset from a pooled set of assets, Orchai users will only be able to borrow one stablecoin, which is USDT. This is also known as a single borrowable asset.

However, with this mechanism, users will not receive interest on collateral anymore. In contrast, you can borrow more with less risk of liquidation or lower liquidation penalties while spending fewer gas fees. Moreover, since the collaterals in Orchai are sAssets, borrowers can still receive the staking rewards as additional interest. In the beginning, the Orchai Money Market will allow borrowers to collateralize sORAI and scORAI to borrow USDT. Moreover, in the future more tokens will be supported, such as sATOM, sOSMO, etc.

Lending Mechanism

Borrowing from the Orchai Money Market is as straightforward as locking up collateral in exchange for a loan. The main parameter of a debt position is its borrowing capacity: the maximum amount of debt an account can accrue. An account’s borrowing capacity is determined by the amount and quality of locked-up collateral. Orchai defines a loan-to-value ratio (LTV) for each type of collateral, which indicates the fraction of a collateral asset’s value that contributes to a debt position’s borrowing capacity. LTV ratios range from 0 to 1 and are a function of an asset’s volatility and liquidity. Stable, liquid assets will have high LTV ratios, while volatile illiquid assets will have low LTV ratios. Orchai Money Market sums the value of all collateral assets multiplied by their LTV ratios to determine an account’s total borrowing capacity.

Orchai uses an algorithmic interest rate algorithm to determine lender and borrower rates based on borrowing demand and supply.

Utilization rate at time t is the ratio of the total amount borrowed to the total amount deposited, that is:

Based on the utilization rate, the algorithm calculates the availability of capital within the pool.

The interest rate model manages liquidity risk in the protocol through user incentives to support liquidity:

• When capital is available: set low-interest rates to encourage borrowing.

• When capital is scarce: set high-interest rates to encourage repayments of debt and additional supplying

This algorithm can be formulated generally as follows:

Where 𝑓 is an increasing function and has a value between 0 and 1.

Liquidation Mechanism

Orchai protocol implements a liquidation mechanism to protect all funds from under-collateralization. As far as all debts are sufficiently collateralized, the protocol remains in good status.

The liquidation contract ensures that all lenders are safe by incentivizing liquidators who observe and liquidate loans with a borrowing amount above the allowed borrowing limit. These incentives are called “liquidation discount”. Unlike other lending protocols, with a fixed liquidation discount, our liquidation mechanism is Auction Liquidation, in which participants bid against each other by putting money in pools known as liquidation pools. Each pool has a different liquidation discount. Pools with lower discounts are given a higher execution priority, thus being executed first during liquidation events.

This way provides higher robustness and solvency guarantees compared to a traditional “keeper” system with a fixed liquidation discount. Keeper systems rely on arbitrageurs to finance liquidations on a discretionary basis, which can result in a liquidity crunch at times of high market volatility. On the contrary, pooled liquidation is fully collateralized and enforces a lengthy withdrawal period. Liquidation demand is, therefore, predictable and stable in the face of temporary shocks.

However, before being liquidated, money in the liquidation pool is not used for anything, leading to unprofitable. To optimize liquidity and attract liquidators, part of the money in the liquidation pool is deposited back into the protocol to earn lending yield. This yield is being divided equally among all participants in the pool. So liquidators not only earn liquidation discounts when liquidating but also earn lending yield when waiting for a chance to liquidate.