FLOKI Partners with Inverse Finance: You Can Now Stake Your FLOKI tokens and Borrow Against It (what this means plus an important note!)
FLOKI has partnered with major DeFi protocol Inverse Finance to bring DeFi to its hundreds of thousands of holders!
Inverse Finance is the future of DeFi and one of the hottest DeFi protocols out there, and this partnership will allow Floki Vikings to be able to stake their FLOKI tokens and borrow against it!
Through the FLOKI x Inverse Finance partnership, you will be able to:
- Stake FLOKI and earn Inverse Finance’s native token, INV.
- Use your FLOKI tokens as collateral on Inverse Finance’s platform and borrow DOLA (Inverse Finance’s own stablecoin pegged 1:1 to the dollar), BTC, ETH, and other available cryptocurrencies against your FLOKI token.
This partnership provides endless opportunities for FLOKI holders and would be highly valuable to FLOKI “diamond hands” holders who want to get more immediate value out of their tokens without having to sell it
Staking your FLOKI tokens with Inverse Finance
To stake your FLOKI tokens with Inverse Finance you can connect your wallet to the Inverse Finance Anchor protocol directly on the official Inverse Finance website.
Please note the official Inverse Finance website:
It is very important that you triple check the website to make sure it is the above (Inverse.Finance) so you don’t end up losing your FLOKI tokens — as scammers are out there looking to prey on unsavvy folks.
We will soon be putting out a video tutorial on how to use the Inverse Finance protocol for beginners.
Again, make sure you triple check the website so you don’t lose your tokens by connecting to the wrong website.
The INV x FLOKI integration is only available on the Ethereum network, so make sure you have the Ethereum network selected when connecting your wallet to Inverse Finance’s website.
If it is your first time depositing FLOKI to Anchor, you will need to ‘Approve’ the smart contract to spend the FLOKI from your wallet before you can make the deposit. This means there will be two transactions; the first is the approval transaction and the second is the transaction in which you make the actual FLOKI deposit.
More information on smart contract approvals can be found here.
Once your FLOKI tokens have been staked on the Inverse Finance website you’ll start earning INV tokens proportionate to your portion of staked tokens from the INV x FLOKI pool.
Borrowing stablecoin, BTC, ETH, and more against your FLOKI tokens
Another exciting aspect of the INV x FLOKI partnership is that it lets you borrow stablecoin, BTC, ETH, and other major cryptocurrencies while using your FLOKI token as a collateral.
What this means is you get the token you decide to borrow without having to “sell” your FLOKI tokens (unless you get liquidated — which is why you should pay careful attention to this section).
Inverse Finance has a default 50% collateral factor for FLOKI.
This means you can borrow stablecoin or other tokens worth up to 50% of the value of your FLOKI tokens you lock with Inverse Finance before you get liquidated.
In other words, if you stake $100 worth of FLOKI tokens you will be able to borrow up to a maximum of $50 in DOLA (Inverse Finance’s native stablecoin), BTC, ETH, and other supported currencies before you are liquidated.
This is a very generous offer from Inverse Finance and one they gave because they want the Vikings to have as much flexibility as is desired.
However, it is very important that you know what you’re doing when leveraging this feature.
Borrowing the full loan amount available (or 50% of the value of your staked FLOKI tokens) will get you instantly liquidated.
If you borrow half of the loan amount available (or 25% of the value of FLOKI tokens you supplied to Inverse Finance), if the price of FLOKI goes down by 50% you will get liquidated and the value of your FLOKI tokens equivalent to your loan amount plus a 13% liquidation fee will be taken by the liquidator.
This is why it is important to know what you are doing, and the risks, when deciding to borrow against your FLOKI tokens on Inverse Finance.
More importantly, and you want to pay attention to this, if you borrow ETH or BTC against your FLOKI tokens, for example, since both ETH and BTC are not stablecoins, the prevailing price of the ETH and BTC cryptocurrency will determine whether or not you get liquidated.
For example, if you stake $100 worth of FLOKI tokens and borrow $25 worth of ETH, if the value of the FLOKI tokens remains flat and the value of ETH doubles, you will still get liquidated. This is due to the increase in value of ETH against the value of the FLOKI token.
With this, it is very important to ensure proper risk management strategies before borrowing against your FLOKI tokens.
For example, if you take a loan of 10% of the borrow limit available in the Inverse Finance protocol, the value of FLOKI has to go down about 90% before you get liquidated — making this essentially less risky than borrowing a much higher percentage.
APY and APR
The annual percentage yield (APY) is the rate of return earned on an investment — with compounding interest while the Annual Percentage Rate (APR) is the cost you pay annually to borrow.
You can find live information about the APY (when you stake your FLOKI tokens) and the APR (when you borrow against your FLOKI tokens) directly on the Inverse Finance website.
Right from the very beginning we’ve been very clear about our goal to make FLOKI the utility memecoin.
In other words, our goal has always been to introduce a lot of different utility for the FLOKI token that makes it much stronger than any other memecoin out there.
Partnerships like this one with Inverse Finance helps us achieve just this.
Inverse Finance brings DeFi to FLOKI holders, a feature that is practically unavailable for the vast majority of memecoins — giving FLOKI and the Vikings a massive edge.
That said, this amazing new feature isn’t without its own risks.
If you borrow more than you should borrow against your FLOKI tokens and downward volatility for FLOKI becomes too high, you could get liquidated and lose ALL of your tokens.
This is why you should be smart and embrace proper risk management when using this new, amazing feature.
It’s also important to realize that Inverse Finance is a third party protocol.
While the FLOKI team has huge trust in Inverse Finance (it’s why we’re partnering with them!), you should also be aware of the risks of staking your tokens on a third party platform; you could lose your tokens if there are hacks and flash attacks. This is a risk that comes with all of DeFi so it isn’t limited to Inverse Finance.
While our lead dev and tech team once helped with Inverse Finance and is confident about the security of their protocol, we believe it is important to convey the risks that come with using DeFi protocols in general.
In conclusion, this is one partnership the whole FLOKI team is very excited about and we look forward to working together with Inverse Finance in the future to further enhance the lives and finances of our holders.
We’d also like to inform you that Inverse Finance has created a FAQ page specifically for the FLOKI x INV integration. Please make sure you read that as well!