❓FAQ
Frequently Asked Questions
Can you explain concisely how the profitability of the platform impacts the value of the SKW token, perhaps with a clear example?
A: Certainly. The platform's profitability positively influences the SKW token value in several ways:
Financial Stability: The platform's earnings cover operational costs, reducing the need of the Skew team to sell SKW tokens for funds.
Increased Demand: New users are mandated to buy and lock SKW tokens to use our services, creating a demand. Borrowers also purchase SKW tokens from the market to pay 2% loan fees.
Reserve Fund Growth: Accumulated fees, including those from swaps, enhance the reserve fund (locking SKW) thus bolstering protocol security.
Incentives for Retention: Users view SKW tokens as a service rather than a speculative asset. For example, to lend $10,000 in stable coin any user needs to lock $1,000 in SKW for six months as a minimum. For example, the return from a 20% APR on the lent amount, coupled with the 3% cashback on daily purchases using our non-custodial debit card encourages holding SKW tokens.
Long-term Holding and Upgrading: After recouping the initial cost, users are likely to keep their SKW tokens to continue enjoying benefits. Some may buy more SKW to access higher tiers.
Price Correlation with User Growth: As the user base expands more SKW is purchased and locked, leading to a rise in its price, mirroring the organic growth of the platform.
Development: In time, we will launch additional services to produce further value to our users that will require SKW to participate.
How can Skew offer higher APRs for lenders?
A: Skew can offer up to 20% returns that are sustainable through lending to qualified borrowers already paying high APR rates in this space. They may also set their APR higher if they choose.
Why is there a 6-month staking requirement for a 3-month loan term?
A: This requirement is in place not just for lending but also for accessing cash back rewards from our non-custodial crypto debit cards. It's advisable to maintain the SKW locked to preserve lending privileges and card benefits.
How are individual lenders protected against default?
A: In case of default, the Skew protocol will liquidate collateral and if needed, file and insurance claim, and use its reserve fund wallet to have the means to represent users and pursue legal action against any defaulting borrowers through our retained specialized Law Firm.
Why would borrowers agree to a high interest rate?
A: Accredited borrowers benefit from easy access to loans on Skew. Their strategy yields return higher than the borrowing rate, it's profitable for them.
What is the process for borrowers to qualify?
A: As typical in traditional finance, the qualification process includes Know Your Business (KYB) checks, a review of applicable licenses, asset requirements, past performance, applicable credit checks, and the setting of initial conservative borrowing limits.
How do qualified borrower loans work?
Loans to borrowers are established for a fixed duration of three months, during which lenders will receive weekly interest payments in the same type of token they deposited. Upon completion of the term, borrowers are required to fully settle their loans, to allow the protocol to process all users withdrawals. Then, they have the option to open a new loan under the same conditions, which includes a 2% opening fee, payable in SKW tokens and other 3 months fixed duration.
How does Skew generate revenue, and how does it impact SKW token value?
A: Skew generates revenue from card load fees, liquidity swap fees, and borrower loan opening fees. These revenues help cover operational costs without selling SKW tokens, thus maintaining their value. Increased usage of SKW tokens for services like loan fees also contributes to their demand and value.
How is the reserve fund managed, and what's its initial value?
A: The reserve fund will start with $4M, contributed from SKW/USDT and SKW/BNB liquidity pools. This fund will grow with SKW price increases and protocol fees. We have the potential to further manage potential risks with insurance protocols for additional coverage. (note: When protocol reaches a minimum 10M TVL, we intend to review insurance partnership proposals with the InsurAce protocol and Nexus Mutual.)
What legal measures are in place for borrower defaults?
A: Skew's strategy relies on legal counsel to develop thorough due diligence processes and legal contracts in place to protect lenders, common in traditional finance.
How does Skew showcase its compliance and registration in Switzerland?
A: Skew is registered under Swiss regulation as SRO, verifiable on the FINMA website. (license application in progress)
What risk management policies are in place for key personnel and protocol operation?
A: Contracts are between the company and users, reducing personal liability. In unforeseen circumstances like the owner's incapacity, protocols are in place to ensure operational continuity.
How is the private and public sale structured tax-wise?
A: The sale is structured as a utility token offering with discounts based on the token release schedule. Taxes are applicable as per standard regulations and jurisdictions.
Is the lending protocol treated as a loan for tax purposes?
A: The lending protocol operates under standard financial and tax regulations, with lenders/borrowers responsible for their tax liabilities.
How is the maximum borrowing limit determined?
A: The maximum borrow limit is set by the Skew team, based on thorough due diligence for each case. Idle funds are minimized as our sales manager actively engages partners for new loan opportunities.
Who is responsible for customer service for Skew's non-custodial debit cards?
A: Customer service for the Skew non-custodial debit cards is exclusively handled by the card service provider. Legally, Skew cannot directly manage customer service for these cards, despite them being branded in Skew's name. These card service providers are licensed to legally provide these services.
What is Skew's role in relation to the non-custodial debit cards?
A: Skew's role in relation to the non-custodial debit cards is limited to branding and determining the tier and reward levels for the cardholders. It's important to note that Skew does not hold legal liability for card service-related issues. All cardholders will have access to detailed service agreements provided by the card service provider. Skew also retains the sole right to add or remove card service providers and brands to meet all compliance requirements, if any.
What is a SAFT agreement as part of the private sale?
A simple agreement for future tokens (SAFT) is a legal contract for compliance between the development company (Skew Labs) and the investors to properly execute and manage the private sale of the future token.
How will the public sale be conducted?
The public sale will be carried out through a specialized protocol that mandates Know Your Customer (KYC) procedures, similar to those offered by TokenSoft. TokenSoft is renowned for its focus on regulatory compliance in the realm of digital asset sales. By adopting this protocol model, we ensure compliance with all necessary standards for participants in the public sale, including identity verification and anti-money laundering (AML) checks. Moreover, this approach is in line with the rigorous requirements for potential listings on Tier 1 centralized exchanges in the future, should they be necessary. This strategic methodology ensures a secure and compliant transaction process for all involved in the public sale of tokens, aligning with our long-term goals for scalability and liquidity. (We reserve the right to select a different protocol partner for the public sale; all pertinent details will be communicated in due course).
Who is providing the services for the SKEW debit cards?
Currently, we are in discussions with two providers with the proper legal licenses, and will determine who will provide services for the SKEW debit cards in the near future. The selection and interview process is ongoing with our legal counsel, and we will make an official announcement once a decision has been reached. We are committed to selecting a provider that best meets the needs of our Skew customer base, ensuring satisfaction and compliance with the services provided. We also reserve the right to select and adjust our choice of provider as needed to maintain the high quality of service our customers expect.
If customers remove their SKW lock, do they automatically lose their cash-back tier level?
If the customer removes their locked SKW, they will lose their tier level. However, if the value of their SKW in dollars falls below the current tier level but the allocation is maintained, the tier level will not be lost.
What is the plan to deal with idle funds?
The likelihood of funds sitting idle within our platform is very low, given that there will be qualified companies seeking loans on a daily basis..
As earnings are paid weekly on the loans, does this imply a minimum 7-day lockup period for depositing customers? Additionally, where do the weekly earnings originate if borrowers are repaying their debt after 3 months?
Yes, the minimum lockup period is 7 days due to the smart contract enforcing a 7-day epoch. The funds for the weekly interest payments are derived directly from the loans. From the total amount that the qualified companies borrow, the smart contract will automatically deduct the necessary funds to cover the rewards for the 3 months, in addition to the 2% loan origination fee.
What will be the use of the $2 million raised from the public sale that will not go towards the SKW/USDT and SKW/BNB pools?
It will be allocated to lending, so with the 20% interest rate, we will generate $400,000 to cover the platform's costs without the need to sell SKW.
Is it mandatory to own SKW tokens to lend funds on the platform? And if so, are tokens required to be locked for 6 months across all tiers?
SKW is the utility token of the platform. Owning SKW is not strictly necessary, but without locking any SKW on the platform, you will be placed in tier 0. In this tier, the maximum lending amount is $100, and there will be 0% cashback on the debit card.
While SKW tokens are locked, do they generate any kind of revenue?
The locked SKW tokens do not generate any rewards, as they are merely utility tokens, not securities.
Does adding more tokens to the locked amount update the tier level and restart the 6-month lock period?
Yes, when users upgrade their tier level, the 6-month lock period is reset.
Can customers spend their loan interest with Skew debit cards? Also, is interest automatically compounded and reloaned?
Customers will be able to claim their loan interest weekly and then transfer it to their debit card or compound it by lending it again. Autocompounding will not be directly offered by us, as users must decide how to manage their profits in compliance with FINMA regulations.
Are customers from anywhere in the world able to apply for the Skew non-custodial debit card?
Currently, we cannot provide debit cards to customers in the USA, Singapore, China, Japan, and Australia.
How can customers top up their Skew debit cards?
Customers need to connect their crypto wallet to our dApps, navigate to the dashboard on our platform, and click 'load card' to sign the transaction after entering the required information. Our smart contract will then transfer the customers' crypto assets to our CEX corporate account, where we will exchange them for fiat to load the cards. This process is instantaneous for our customers, as we maintain a fiat buffer with the card provider to load the card while transactions are processed between private wallets and our CEX wallet.
How do you generate revenue to pay those who lock USDT?
Skew will provide a list of qualified borrowers to our customers, allowing them to decide to whom they wish to lend their money. Qualified companies may offer higher interest rates to attract more liquidity.
What if someone replicates your model? How is this intellectual property unique to Skew?
The market is quite new, and there is room for multiple platforms, despite some existing competition. However, we will be the only project offering loans to qualified companies at competitive interest rates, coupled with non-custodial debit cards. This combination will significantly expand our user base and enhance our platform's liquidity."
What is the meaning of non-custodial debit card?
Non-custodial debit cards ensure that your funds always stay on your private wallet, not on any Web3 or crypto wallet, you only move it into the card when you need to load it ahead of its use.
These FAQs aim to address common queries and concerns regarding Skew's operations, legal compliance, financial management, and risk mitigation strategies.
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