Tokemak is a liquidity aggregator designed to give users the ability to provide liquidity and earn protocol incentives for staking various crypto assets. Users actively vote where to deploy liquidity in order to maximize yield for all depositors.
Tokemak wants to serve as the Amazon Web Services (AWS) for Web3 by ushering in a broadband moment for liquidity or value flow in DeFi. Current solutions to solve this liquidity issue are either to engage a centralized market maker or incentivizing users through yield farming. However, these methods can be costly and highly inefficient. Tokemak was designed with this fundamental problem in mind. It is designed to be used primarily by liquidity providers (LPs), DAOs, new DeFi projects, and exchanges. Each asset on Tokemak has its own "token reactor" that accepts a particular asset to be deployed as liquidity across DeFi. TOKE is the native utility token that is used to direct the liquidity for each token reactor. LPs on Tokemak receive impermanent loss protection, with the cost offset by trading fees earned and ultimately backstopped by TOKE holders. Liquidity directors (LDs) utilize TOKE to control liquidity across Tokemak. LDs stake their TOKE in a given reactor and use that stake as voting power to direct liquidity to an exchange of their choosing. Voting power from TOKE is directly proportional to the amount of TOKE staked and the amount of assets in that specific reactor.
Tokemak earns all trading fees earned from its liquidity provision to various exchanges in return for bearing the risk of impermanent loss. These fees are then retained in the Tokemak treasury as Protocol Controlled Value (PCV). Over time, Tokemak intends to accumulate enough trading fees such that it will be able to direct liquidity independently, without the need for LPs. This point of self sufficiency is referred to as the "singularity". At this point, value accrual for TOKE is driven by the amount of liquidity that each TOKE controls.
You can provide single-sided liquidity on Tokemak to earn protocol rewards (paid in TOKE). You can also stake TOKE to earn a proportional share of all token reactor yields (paid in TOKE).