Today I’m going to tell you about a fairly new project with a lot of potential. I don’t know if you’ve already heard about the Cross-Chain Capital (CCC) crypto project. In this article I’m going to explain in more detail how it works and why some people refer to it as Defi 3.0.
Presentation of the CCC project
So let’s start by laying the foundations, CCC is a fork of the MCC (Multi-Chain Capital) project. To understand what a fork is, you can see it as a division of an existing project where on one side the original project continues and on the other side, some operating parameters are modified.
In the example that interests us, the MCC project is included in the Ethereum blockchain, a fork of this project has been made to create the CCC project on the Avalanche blockchain.
First of all, you have to know that I was strongly interested in the MCC project for a long time but the problem was precisely related to the Ethereum blockchain. At the time I wanted to invest 100 USD to “test the waters” but it would have cost me 300 USD in transaction fees. Which of course I found incensed. So I waited for a fork of this project on another blockchain and that’s how I discovered CCC.
Well, we got lost, let’s get back to the serious stuff.
The CCC concept
The general idea is that each CCC token represents a part of the benefits of the Cross Chain Capital project itself. On the principle CCC is similar to the difference that the transaction costs are much lower than those of MCC on the Ethereum blockchain.
You can see CCC as a decentralized mutual fund that will use its available liquidity to invest in other protocols in order to generate income. But that’s not all, besides that, each token holder will receive additional CCC with each purchase of CCC from other people. The CCC protocol will therefore generate two types of income:
- The reflections: Which are roughly the distribution of the 10% of taxes to the purchase shared between all the holders of tokens
- The gains made by the protocol thanks to the accumulated cash which will increase the value of the token
We are going to go more in detail to better understand immediately.
CCC’s passive income
As I said, thanks to CCC you will earn passive income. To understand a little better how these incomes work, I will take the graphs published on their Medium and describe it.
Revenues from CCC purchases
A person wants to buy CCC using AVAX (Token of the Avalanche blockchain we mentioned earlier). On the amount he should receive, a tax of 10% will be levied. The person will therefore only receive 90% of the CCC tokens that he should have received. The 10% levied on this amount will be redistributed among all CCC token holders.
Example: Let’s say there are 3 CCC holders in total. A 4th person wants to buy CCC tokens for a value of 100 EUR which at the time of the transaction is equivalent to 10 EUR per token. (These are of course fictitious numbers to make it easier to understand). Well, the buyer will pay 100 EUR but will only receive 9 CCC Tokens. The 10th token he should have received will be taken as a “tax” by the system and redistributed between the 3 original CCC holders. They will each receive 0.33 CCC which will amount to about 3.33 EUR each, all passively.
In this example, it may not seem like much, but just imagine the potential if many purchases are made every day. Moreover, all cases are automatically managed by smart contracts.
Moreover, thanks to these reflections, you can take full advantage of the passive income, because the reflections received will increase your capital on the basis of which the next reflections will be calculated.
Revenues from CCC sales
Let’s now take the opposite situation, where one of the CCC token holders wants to sell all or part of his tokens to recover AVAX. In this case, a tax of 10% will also be levied and he will receive only 90% of the AVAX he should have received. The difference here is that this tax will not go directly to other holders but in the treasury of the protocol. This cash flow will be used to make “buybacks” (= buy back of CCC tokens) or invest in other protocols generating high returns.
To develop a little more what happens with this cash accumulated by the protocol, I will again take a picture of their Medium.
This cash flow, fed by sales taxes, will be invested. And for this there are two possibilities:
- Buyback CCC tokens : these tokens will then belong to the protocol, they will no longer be sold by holders and will therefore no longer have a negative impact on the price. These CCC will be put back in the LP (=Liquidity Pool). We can consider this LP as a forced token holder who will not sell. This allows to ensure a better stability of the token and an increase of its price.
- Invest in other cryptocurrency protocols: In this way, this free cash flow will come to generate income. This new income can be used to buy back CCC tokens or to continue investing in other protocols. In any case, we understand that all this will allow the project to grow by taking full advantage of the compound interest. When we talk about investing in other protocols, we could talk for example about the Wonderland project (TIME) presented in the image below. This one allows to generate interests currently at 75.818,6% per year (5/12/2021)! Moreover, since CCC will act as a decentralized mutual fund, it will be able to take advantage of a larger amount to invest and therefore invest more than we could individually and spread between different protocols to reduce the risks.
A very important point to understand is that even if everyone stopped buying/selling CCC tokens, the treasury will continue to increase in value on its own and will allow to continue buying tokens. So, even if you stop all transactions at once, the token will continue to increase in value and generate passive income for the token holders by increasing the value of the token
A deflationary token
A problem has recently been identified on the CMC project and all projects derived from it. Indeed, the protocol is coded to be inflationary. Thus, during operation, the protocol generates a surplus of tokens. But as you probably know, it is this kind of problem that creates inflation. By creating more and more token, it reduces the value of the token (law of supply and demand). To quantify the problem, the developers have sent us a summary table comparing the problem on other projects.
The developers of the CCC project decided to take action on this issue. Indeed, this problem was detrimental to the project. So they set up a vote explaining the problem and the solutions and the community decided what to do. To solve the problem it was necessary to make a migration of the token on a second version (CCC V2). All this was done in a very fluid and correct way with real support of the developers which confirms me even more on the quality of this project.
Now, a burn address has been created and is considered as a token holder. Thus, this address also receives the reflections. The tokens which this address receives are well excluded from the circulation which makes the number of available tokens globally decreasing continuously. This ensures that the token will become more and more valuable over time (because there will be less and less available).
Conclusion on the Cross Chain Capital (CCC) project
Again, this article should not be considered as investment advice. It is simply a description of this project that I think is absolutely brilliant. The goal was to introduce the project and why it is considered by many to be the next generation of DEFI.
We have experienced some difficulties since the migration. Platforms like CoinMarketCap and CoinGecko were not showing the second version of the contract which was causing a lot of problems. The latter has solved it and we are still waiting for CoinMarketCap to fix it, which should happen soon.
Finally, I would like to mention the transparency of the team that continuously communicates with the community to share the situation and progress. Moreover, they do not hesitate to answer our questions to ensure a good understanding of the whole.
I am confident in this project, the proof is that it has dropped a lot in price because of the problems mentioned (CoinMarketCap & CoinGecko) but I continue to buy CCC.
And you, have you ever bought CCC? What do you think about it? Don’t hesitate to give your opinion in the comments!
A nouveau, il ne faut pas considérer cet article comme un conseil en investissement. Il s’agit simplement de décrire ce projet que je trouve tout à fait génial. L’objectif était de présenter le projet et ce pourquoi il est considéré par beaucoup comme la nouvelle génération de DEFI.
Nous avons connu certaines difficultés depuis la migration. Les plateformes comme CoinMarketCap et CoinGecko n’indiquaient pas la seconde version du contrat ce qui causait énormément de problèmes. Ce dernier l’a résolu et nous attendons toujours la correction de CoinMarketCap ce qui ne devrait plus tarder.
Finalement, je tiens à mentionner la transparence de l’équipe qui communique continuellement avec la communauté pour faire part de la situation et des avancées. De plus, ils n’hésitent pas à répondre à nos questions pour assurer une bonne compréhension de l’ensemble.
Je suis confiant dans ce projet, la preuve en est que ce dernier a beaucoup chuté en prix à cause des problèmes évoqués (CoinMarketCap & CoinGecko) mais je continue d’en acheter.
Et toi, as-tu déjà acheté des CCC? Qu’en penses-tu? N’hésite pas à donner ton avis en commentaire !