Last Updated on May 4, 2023 by Olga
Bonk is the first Solana dog coin for the people, with over 250 on-chain integrations built for BONK by the community. But what exactly is BONK and how does it work? In this blog post, we’ll explore all the ins and outs of this exciting cryptocurrency, as well as weigh up its pros and cons to help you decide if it’s worth investing in. So let’s dive right into the world of BONK!
What is BONK cryptocurrency?
BONK launched via airdrop in late 2022. The 100 trillion tokens were split up as follows:
- 5% to the team. These tokens were later burned.
- 5% to marketing
- 5% to initial liquidity
- 15% to BonkDAO
- 20% to early contributors
- 20% to 40 Solana NFT collections
- 15% to early OpenBook traders
- 10% to Solana artists and collectors
- 5% to Solana developers
About 50% of the tokens from the airdrop were distributed to the Solana community.
In contrast to other coins and tokens that modify the Bitcoin blockchain or use the Ethereum standard, Bonk Coin is based on Solana. The fully user-managed, open source blockchain from Solana is particularly suitable for decentralized financial applications, so-called DeFi. As a result, decentralized crypto exchanges, known as DEXs, are also based on Solana. Community tokens, such as Bonk Coin, grant their holders participation in blockchain-based projects.
After the launch of Bonk Coin, some projects on Solana have already begun integrating Bonk Coin into payment methods or staking for Non-Fungible Tokens.
What Makes BONK Unique?
The Bonk coin (BONK) is a community-led project that uses the Solana blockchain. Additionally, the “doge” Bonk coin on Solana aims to boost the Solana ecosystem by providing users with various utilities. The community hopes to revive the blockchain and reinvigorate Solana through this new dog-themed coin. The community has already built more than 250 onchain integrations for BONK.
It was not created through mining, but rather through an airdrop that started at Christmas 2022. It also lives through memes based on the Shiba Inu dog breed. Providing pictures and short, often humorous comments of cute dogs already gave the first dog coin DOGE a life much longer than expected.
Bonk is one of the most distributed tokens on Solana, with over 392k unique holders.
It has remained the most traded token on Solana after Solana itself and USDC for most days since the start of the year.
What are the benefits of taking out a BONK loan?
With crypto loans, you can access funds without selling, increase liquidity, maximize capital utilization, and diversify your portfolio more effectively. In addition, crypto loans tend to have lower interest rates than traditional loans, so borrowers are able to get funds for much less. Finally, these loans provide additional peace of mind since crypto collateral is stored securely in a cold storage wallet.
Here are some cases where you can use BONK as a collateral and get profit:
- Profit from volatility – CoinRabbit loans remain fixed no matter the exchange rate of the collateral currency. An example will help to explain this concept. Suppose you received a loan with 90% Loan-to-value-ratio against 10000000000 BONK when it was valued at $0.000001100 (approx. $11,000). You were then provided with 90% of your collateral; in this case $9,900. To receive your BONK collateral back, you must repay that exact amount – regardless if BONK rises to $0.000002200 or higher. Technically speaking, when repaying the loan at that point, you’d be getting back a total of $22,000 instead of the original $11,000! Crypto loans allow users to leverage their assets and potentially gain profit simultaneously – making them incredibly advantageous.
- Make a huge purchase and continue holding – The crypto loan allows you to enjoy the value of the invested fiat money while inflation permanently decreases it. Today the same amount values more than tomorrow. Therefore, when you take out a crypto loan against BONK, you keep all your BONK assets but gain extra funds to spend today, as we all know that tomorrow your wishes will be more expensive. 😉
- Tax optimization – Some countries require you to pay up to 40% on your crypto investment profits. There is no direct profit in a loan transaction. So you can take a loan and maximize your tax efficiency without worrying about taxes.
- Technique for managing risks – Rather than holding BONK tokens and risking the unpredictable fluctuations of the crypto markets, crypto investors now have the opportunity to utilize their investments as collateral for a BONK loan. They can access funds while their assets remain secure, allowing them to manage their risks. In this way, they can benefit from the lower interest rates of crypto loans while protecting themselves from potential losses from market volatility at the same time.
Is there a way to work with BONK volatility to avoid liquidation?
BONK crypto volatility can result in liquidation. When you use your BONK to take a loan, it is important to monitor the status of your loan. CoinRabbit offers an instant alert system, which uses SMS and e-mail to inform users when there is a potential liquidation.
You can always add more collateral to adjust the Liquidation price of your loan. Loan collateral at CoinRabbit isn’t frozen; therefore, liquidation prices are adjusted immediately by adding more collateral or repaying your loan.
Aside from that, you can decrease the LTV at any time while the loan is open by adding more collateral. For example, CoinRabbit’s minimum loan LTV is 50%. CoinRabbit allows you to increase collateral immediately after opening a loan, so the LTV will decrease at a rate that suits you.
How to get a BONK loan in 4 steps
The application process for a BONK crypto loan has been significantly simplified thanks to crypto loan platforms like CoinRabbit.
- Choose BONK crypto as your preferred collateral on the homepage, under the Loan calculator section.
- By entering the amount of BONK crypto you want to deposit as collateral, the Calculator will show you the Loan Amounts you will receive, and click “Get Loan.”
- We will ask you to confirm the details, enter your stablecoin address, and verify your email address after clicking “Get Loan”
- Next, send BONK to the displayed address. After we receive your collateral, the loan will be sent to you immediately.
Conclusion
BONK crypto loans with CoinRabbit – is a great tool for crypto investors and holders: you can use a crypto loan to optimize your taxes, make a huge purchase, reinvest in new cryptocurrencies and many more while continuing holding your digital assets.
It’s important to remember that all operations with crypto are highly risky. When you get a loan with any crypto lending platform – don’t forget to check the status of your crypto loan periodically and add collateral if it’s needed to avoid liquidation of the loan.
