Anastasiia Karachentseva

STEP is DeFi Step Finance's own control panel token on the Solana platform. Step Finance currently tracks most coins and LPs in the Serum ecosystem and also uses Serum AMMs for swaps.

STEP Token.

The team launched the STEP token on April 24, 2021, as Step Finance's own service token on the Solana platform.

"The STEP token will underpin the Step.finance platform's valuation mechanics, and the team has spent a lot of time building optimal mechanics with swaps, automated strategies, yield farms, rate pools, bridges and data visualization, all involving some STEP," the announcement reads.

The STEP token will reportedly be purely service-oriented at first, with management functions not yet a priority.

"Over time, however, we see Step moving toward a more traditional DAO as the tools evolve on Solana to better manage this transition," the team reports.

Step Finance's mission

"Part of our vision as experienced DeFi users for Step is best-in-class portfolio performance, automated investment vaults, aggregation across multiple exchange pools and easier access to and from many yield farms. Step will be a central place to manage your portfolio on Solana," the developers write.

By far the biggest problem is that most Solana projects are separate from each other. It's impossible to know your token and LP balances, current position sizes, etc. without actually visiting each website individually, logging in and understanding what's really going on with your portfolio. And Step is designed to solve that problem.

"Step will be an important part of the Solana ecosystem, and so it's critical for the team to ensure that there are multiple value accrual mechanisms for the Step platform," the developers said in a statement.

What is Step Finance?

Step Finance is a portfolio visualization platform that brings together all the LPs, tokens, farms and positions that a user may have linked to their wallet and displays them in an easy-to-use dashboard with various useful metrics and visualizations. Step aims to be a page that DeFi users will open all day, with all the features and information they need to make informed decisions.

Step will also allow users to interact directly with their favorite protocols from the dashboard, which can include farms, pools, swaps and automated strategies. Many of these additional services will be provided for a fee, which will be collected and used to repurchase and distribute tokens to STEP token holders. Let's take a closer look at the functionality of the Step Finance platform.

The basic functionality of Step Finance

Step must connect to and query the corresponding programs (smart contracts) built on Solana in order to be able to get the information needed to display to the user and execute transactions. The main Step features that are being implemented or planned are:

Wallet balances. Dashboard view of all tokens you have linked to an individual address, with options to combine multiple wallet addresses into one view and display value over time, expressed in selected base currencies.

LP Token View. Get information related to the current LP tokens you store in AMM Solana and visualize pool performance over time against base currency/hiking, commission income, non-permanent losses, yields and APY.

Yield and Staking. Step will provide a table of current crop opportunities on Solana with a simple one-click login to any farm. Log in, log out, and request crop farm awards on this page. This page also handles the placement of individual assets on Solana validator nodes.

Positions on DEX. The basic AMM from which all DEX on Solana uses or branches out is Serum. This is a complete DEX order book where users can buy and sell any supported token. Step will display current wallet balances, open orders, outstanding balances, and any other information related to users' positions in Serum.

Investment Strategies. Step was founded in February 2021 at the Solana Defi Hackathon as an automated strategy platform. This page will cover automated strategies such as DCA, EMA, RSI and others that users can use with the potential in the future to allow users to create their own customized strategies.

Wallet Balances. View all tokens you've linked to an individual address in the dashboard, with options to combine multiple wallet addresses into one view and display value over time, expressed in the selected base currencies.

LP Token View. Get information related to the current LP tokens you store in AMM Solana and visualize pool performance over time against base currency/hiking, commission income, non-permanent losses, yields and APY.

Yield and Staking. Step will provide a table of current crop opportunities on Solana with a simple one-click login to any farm. Log in, log out, and request crop farm awards on this page. This page also handles the placement of individual assets on Solana validator nodes.

Positions on DEX. The basic AMM from which all DEX on Solana uses or branches out is Serum. This is a complete DEX order book where users can buy and sell any supported token. Step will display current wallet balances, open orders, outstanding balances, and any other information related to users' positions in Serum.

Investment Strategies. Step was founded in February 2021 at the Solana Defi Hackathon as an automated strategy platform. This page will cover automated strategies such as DCA, EMA, RSI and others that users can use with the potential in the future to allow users to create their own customized strategies.

Swap Aggregation. All programs in Solana can be lumped together, and therefore liquidity can be shared between different pools and AMM programs. So it's important to be able to ensure that users get the best possible deal on their swaps, and Step, as a DeFi aggregator, is well positioned to offer swap aggregation from Step.

Step Finance Design

Design is critical to making Step the front page of the Solana ecosystem. The Step team strives to make Step.finance the page that everyone in the Solana ecosystem uses every day. Step will be something that will encompass all other projects in the Step dashboard, providing an easy to use "wallet view" for all the coins, LPs, farms and positions that a user could associate with their wallet.

Design Principles:

The dashboard should be immediately visible at a high level for the NET user account

The user should be able to request information to view the main values associated with their wallet.

First, the interaction should be natural and reflect how people already interact with DeFi.

STEP Tokenomics.

The STEP token provides a clear alignment of incentives between users, token holders, and the team so that Step can continue to grow sustainably and productively for the benefit of all DeFi users. Therefore, it is critical that the STEP token has strong fundamental value accrual structures that increase in value over time.

Overview:

Token Type: SPL (Solana Native).

Maximum supply of 1000000000

Issue term: 2 years

Weekly Issue Reduction: -4%

Airdrop percentage: 1%

Founder's share: 20%

Founder's blocking: blocked for more than 2 years with an increment of 25% every 6 months.

Treasury: 12,219%

Investors and Pre-Sale: 11.780%

Unlock schedule: 2 year vesting period. 50% available after 1 year, 50% available after 2 years.

Community and ecosystem: 55% (LPs and trade execs)

Principles:

STEP token value accrual is key

Two-year emission schedule with a weekly reduction of 4%. Those who take early risk are rewarded, and new supply coming into circulation shrinks over time and helps create long-term value given static or growing buy-back demand. Reflects the similar tokenomics of other yield aggregators (Harvest, Pickle, Yearn, etc.).

No new issues enter STEP's own rate pool. This detracts from the supply of productive TVL buildup activity.

"Transaction Executors" are users who perform transactions on the Step platform for which a fee is charged. The team promises to "incentivize this in the future."

A percentage of the issue for community rewards is split weekly between LPs and Exchange Executors. The percentage may change over time. The current split at launch is 60% for Trade Executors 40% for LP Stakers

Treasury needs to be sustainable and have enough money to pay for the best talent.

80% of Step commissions go to STEP and 20% go to Treasury.

Stacking and repurchase: /

Step.finance will have a single asset pool for the STEP token.

This pool does not receive issuance. It only receives from the revenue generated from step.finance's operation.

Step will charge a fee on step.finance, with 80% of the fee going to stakers and 20% to the treasury.

STEP has also incentivized liquidity pools that will receive new infusions. At launch it will be STEP/USDC and possibly RAY/STEP.

Adding value.

It is important to the success of the project that STEP actually generates revenue and adds value to the token. Therefore, there are several mechanisms for adding value to the token itself that will further generate positive interest and incentives in the positive feedback loop. Below is a list of the value accrual mechanisms that the team intends to implement on the Step platform:

Transaction fees: the simplest and easiest way to accrue value is through STEP, which charges fees for certain interactions on the STEP platform (swaps, yield farms, automated strategies, bridges, etc.). Most of this commission income goes to STEP token participants (80%), with the remaining 20% going to the treasury.

Redemption and distribution: the main mechanism of STEP value accrual is the redemption of STEP tokens from the revenues generated by transaction fees in the protocol, which are then distributed to participants. This provides its own APY for placing STEP tokens and aligns the incentives of the token holders and the team with the success of the STEP platform. It is awarded in proportion to the liquidity of the LP shares in that pool.

Reduced issuance from supply: supporting issuance should be reduced over time without any major cliffhangers (as is evident with SWRV, which reduced issuance by 90%, causing their TVL to drop from $700 million to $3 million and causing people to leave the project). The optimal scenario is a gradual reduction in issuance over time at a given rate. For STEP, this reduction would be 4% weekly of the community and ecosystem reserve. With steady or increasing demand and falling issuance levels, there comes a tipping point where redemptions exceed new issuances, creating net positive buying pressure on the STEP token.

Aggregation: the bulk of the Step Finance platform is an aggregator for various user actions, such as AMM swaps and yield farms. Step will implement a swap router on Solana to improve liquidity and pricing in AMM swap pools, and will also offer a number of tools for crop farmers, such as single asset entry/exit to LPs, automated yield pooling and farm storage with managed yields. Fees collected for these services will be refunded to STEP members.

Blockchain: encouraging users to withdraw coins from the market is one way to reduce potential seller pressure and ensure that there is net positive buyer pressure when demand is unchanged or growing. STEP intends to implement various LP pools with lock-in, in which tokens will be locked in for a certain period of time and can share a higher issuance rate or stacking income compared to stacking pools that allow for immediate withdrawal.

Automated trading strategies: Step started out as a platform for automated strategies, and we have always strived to create this functionality. Solana has a variety of automated vaults and trading strategy contracts that STEP will offer users in the Step dashboard. Step will charge a fee to enter and exit these vaults and possibly, for some strategies, a performance fee as well. These fees will be assessed to STEP participants.

Access Rate: there are a number of investment indicators, analytics, and portfolio analytics that Step plans to make available to users who bid on STEP. The access rate is a better model than subscriptions or paid plans and adds additional value to STEP token holders.

Fiat-Defi Integration: Step intends to implement "arm's length" widgets that can handle fiat on/off ramps in Solana through Step. This brings more money into the Step ecosystem, allows for productive use in Step strategies and exchanges, and ensures that Step remains the center of access into and out of the Solana ecosystem. Once we're ready to develop, Step will get a fiat partner for this.

Referrals: referral programs are a growing mechanism for adding value in the cryptocurrency world, and DeFi projects like 1INCH are using it effectively. One user can refer others through a web link and receive a portion of the commission. Step intends to implement this system for swaps and possibly other automated strategies.

Cross-chain integration: multi-chain capability is a core principle of STEP finance, several bridges are being developed on Solana, we will support them all and will probably charge a small fee for each tx. Adding more blockchains is the way to more TVLs, users, revenue streams for STEP.

Project Management

Step.finance has a core team of 3 people who will initially set the direction of the project. Initially there will be no management functions, but the team is open to exploring further involvement of token holders in the decision making process once the STEP token is created.

At the beginning of the project life cycle, it is important for the founding team to control the direction and development of the project. Only after a phase in the life of the project is reached where direct day-to-day input from the founders is not necessary for the continued development of STEP can the creation of a DAO on governance be considered.

Conclusion

Step emphasizes that this is the initial token mechanics for the STEP token, which can be changed at any time.