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PEARL - Wrapping sCLAM

What is PEARL?

Users can choose to wrap their sCLAM, which converts it to a standardized ERC20 token. Instead of your token amount increasing, the value of PEARL itself increases. This allows you to gain the rewards you would normally gain from staking, without having an increasing amount of tokens in your portfolio.
Users can also unwrap their PEARL tokens to receive sCLAM at any time.
sCLAM increases in amount over time, while PEARL increases in price.

Why is this relevant?

Taxes

  • In many countries, there is a clear distinction between Income Tax and Capital Gains Tax. Income Tax applies to regular income, usually received for work done or investments.
  • Capital Gains Tax applies to money gained from (for example) the sale of an asset like a house or investment.
  • In many cases, Capital Gains Tax is lower than Income Tax, and so it would be diligent to make it as clear as possible to the taxation authorities of your country/jurisdiction that the income you receive from OtterClam is a Capital Gain rather than an Income.

Collateral or (9,9)

  • Enables PEARL to be used on other protocols like as a collateral asset for lending platforms.
  • There will be a document explaining the process, but in short, you can collateralize your PEARL to borrow stable coins which you can again stake on Otterclam or on any other protocol, as your Clams remain staked, they continue to get rebase rewards.
This is not financial advice and collateralizing involves liquidation risks

Cross-Chain

  • The rebase system only works on a single chain. When cross-chain, we need a token with a balance that doesn't increase over time. This is where PEARL shines as a cross-chain asset. You can keep your CLAM staked while utilizing your PEARL on another chain.

How does it work?

Users can wrap their sCLAM tokens on our app.
The PEARL token price is calculated as follows:
CLAM Price ∗ Index
  • The index, which you can monitor on the Stake page or the dashboard, equals how many CLAMS per one CLAM you would have if you were staking from the beginning when the project launched.
  • So when you wrap your CLAM, it looks at the index and records it. When you unwrap it, it looks at the index again and decides how many rebase rewards you have accumulated from the first index up to then. That is why when you wrap, you automatically receive rebase rewards without ever going to the staking page.