Come early next week, wLOKI will be issued on the Ethereum blockchain and become available for trading on Uniswap.
As you might’ve already heard — the Loki blockchain is diving headfirst into the DeFi space. To increase the DeFi community’s ability to access and gain exposure to Loki, we’re announcing support for a brand new way of using the LOKI cryptocurrency, called wLOKI.
We’re excited for Chainflip to bring DeFi directly to the Loki blockchain — but there is already a bustling DeFi industry built (mostly) on the Ethereum blockchain. In order for Loki to participate in this established ecosystem, it’s going to need a wrapped token.
wLOKI, or wrapped LOKI, is an ERC-20 compatible asset that’s fully backed by LOKI on the Loki blockchain. Initially, the wLOKI wrapping service will be provided by the existing Chainflip team as a part of the swapping service they are already developing, which is currently in the later stages of minimum viable product development.
As with previous arrangements with wrapped LOKI tokens, the Loki Foundation will oversee and regulate the circulating supply of the ERC-20 token on behalf of the community.
Although Chainflip aims to eliminate the need to use wrapped tokens for decentralised trading, wrapped assets are still useful for people who need to access services on chains that are not cross-chain compatible.
On top of this, the current king of the DeFi jungle is Uniswap. It’s free to list a token on Uniswap, and it offers a fantastic means of exchange for the wider community. Come early next week, wLOKI will be issued on the Ethereum blockchain and become available for trading on Uniswap.
We’re also offering an incentive to yield farmers who are able to bootstrap liquidity in the Uniswap wLOKI/ETH pool. If you already have exposure to both ETH and LOKI, this will be an opportunity to earn additional tokens — potentially as much as 15,000 LOKI a week. This reward will be received as wLOKI paid directly to the addresses of the pool liquidity providers.
Bringing Loki to Uniswap should make it much more appealing to yield farmers and DeFi enthusiasts who are yet to get involved in the Loki project. It’s a great step to boost the interest and activity in the Loki community in the lead-up to Chainflip’s release.
Starting next week, wLOKI will be available for 1:1 transfer with LOKI using a web-based bridge.
The future of wLOKI
Swaps for the wLOKI token will be supported manually through the bridge at wLoki.io until an equivalent wLOKI/LOKI cross chain liquidity pool is launched on Chainflip. Once wLOKI is integrated on this new DeFi tool, the token can be regulated by arbitraging the price in the pool and adjusting the supply as necessary. This can be automated such that the LOKI backing wLOKI is deposited into the LOKI vault, where it will be managed differently to other LOKI balances in the vaults. This will ensure the future of wLOKI is decentralised, automated, and easy to access.
We’re very confident about the future of cross-chain asset swapping, but it’s still important to connect Loki to existing DeFi infrastructure. By supporting the creation and maintenance of wLOKI, the Loki blockchain can be at the forefront of both the established ecosystem on Ethereum as well as the emergent cross-chain ecosystem.
Note: The Blockswap project was rebranded to Chainflip on 25/09/2020.