What is Penguin Finance?

What is Penguin Finance?

What is Penguin Finance?

…and how do you make money on it?

Dapps & Protocols

·

10 min

What is Penguin Finance?

…and how do you make money on it?

Dapps & Protocols

·

10 min

What is Penguin Finance?

…and how do you make money on it?

Dapps & Protocols

·

10 min

What is Penguin Finance?

…and how do you make money on it?

Dapps & Protocols

·

10 min

What is Penguin Finance?

Are you tired of the fees on Ethereum? Do you feel like DeFi opportunities are slipping through your hands? Then it's time to come over to the Avalanche network and yield farm with Penguin Finance. Here, fees are a thing of the past. With Penguin Finance, you can boost the liquidity of Avalanche projects and farm those sweet, sweet yields.

To explain Penguin Finance protocol, it’s important to mention that its general mechanisms apply to every other dapp. Penguin Finance is made out of a collection of smart contracts governed by the community.

Smart contracts are automated pieces of code that mediate the interaction between a user and the dapp. Whenever you interact with Penguin Finance, crypto tokens always remain in your possession. In order to access the protocol, users have to manually approve the smart contracts. You can think of it as a bot that performs the action you agree with based on a strict set of rules. This is an important difference compared to traditional finance, where the money is placed with a third party.

With smart contracts, there is no risk of a person running away with users’ money, or ever worse, locking up the money for any reason. Furthermore, anyone can access Penguin Finance regardless of their geography, political views, or religion — Penguin Finance doesn’t require KYC.

Transparency and decentralization are powerful tools to enable a thriving DeFi ecosystem. With the traditional limitations out of the way, an important question arises: “How does Penguin Finance become self-sustaining?”


Penguin Finance mainly derives its value from yield farming. In exchange for the service provided, Penguin Finance receives a small fee that goes into maintaining the protocol. Upon consulting with the community, core developers are usually in charge of implementing the protocol upgrades. This ensures Penguin Finance stays safe from hacks and the protocol adapts to the market conditions.

As the number of transactions increase, the fees quickly add up. A portion of these fees goes into the protocol treasury, which pays for the developers, audits, and future products.

The Penguin Finance treasury is secured by a multisig that is being held by the core team and key members of the Penguin Finance DAO. The development team made no mention of transitioning to on-chain governance. For now, the core team stays anonymous to the public – only Ava Labs know their identity to ensure the integrity of the protocol. 


The open nature of DeFi encourages protocols to cooperate and innovate. Penguin Finance is one of the many DeFi protocols that bloomed on Avalanche. However, the code can be vulnerable to hacks and exploits. As easy as it is for developers to review each others’ code, hackers can just as easily spot a vulnerability and take advantage of it. 

The code is publicly available to verify. Those who are tech savvy can audit the code for themselves and see precisely what the smart contracts do. Less technical users can indirectly assess the safety of Penguin Finance protocol based on audits and reports issued by technical community members. 

As of 2022, Penguin Finance has never been hacked. Any vulnerabilities have been patched and disclosed to the public. On top of that, Penguin Finance runs bug bounties to encourage white-hat hackers to keep the protocol safe. 

How does Penguin Finance work?

Penguin Finance works by farming rewards on behalf of the user – Penguin Finance is not a DEX. The protocol maximizes users' yield by finding the best farming opportunities within the Avalanche ecosystem. For DeFi projects, Penguin Finance opens their native token to a wider audience via boosted rewards.

Penguin Finance Igloos

Yield farms on Penguin Finance are called Igloos. These farms allow users to earn PEFI and DEX rewards simultaneously by staking your Liquidity Provider (LP) tokens. Many popular token pairs are available on the platform to choose from, such as AVAX-PEFI and AVAX-ETH. 


Under the hood, Igloos run as layer-2 yield farms on Avalanche. This means the protocol leverages Avalanche's speed to move funds fast between different liquidity pools to maximize your profit. With near zero fees, the difference goes in users' pocket.

Penguin Finance Launchpad

Penguin has developed a launchpad that gives new projects access to their loyal community of Penguins. This gives new projects added exposure and a chance to kickstart their own community.

Unlike traditional launchpads, Penguin requires no KYC. With your identity protected, Penguin goes one step further to ensure the token distribution happens fairly. As a result, the small fish are advantaged instead of the whales.  

The Penguin Launchpad relies on its native token as the method of participation. Users stake their PEFI tokens and unlock iPEFI. Depending on the amount of iPEFI held, Penguin will determine how many tokens one user can buy for the respective project.


An allocation represents a share of all tokens to be distributed. The number of tokens you can acquire will depend on the number of allocation points (AP) users have. For example: if there are 100 total allocations and you have 5 allocations, you’ll be able to acquire up to 5% of all tokens distributed through the Launchpad.

Club Penguin

Penguin Finance has developed what they call the stake-ception. In other words, it's a single-asset iPEFI staking protocol where users can stake their iPEFI in different contracts to earn tokens from their favorite projects native to Avalanche. 

Each project that partnered for the Club Penguin is assigned an Iceberg, which represents a smart contract that users stake their iPEFI in to earn free tokens. Since Icebergs melt, they will each have a limited staking time. This will vary from 7-14 days depending on each Iceberg.


You can think of it as a golden ticked that gives you a limited time to gain even more rewards. The best part about Club Penguin is that you are not exposed to impermanent loss – you don't even have to pay any withdrawal fees. Projects who choose to run their Iceberg do it to incentivize their communities, which is the equivalent of an airdrop with extra steps.

Emperor Royale

Recently, Penguin Finance has come up with the idea of a fun game to play while your yields are growing. The Penguin Emperor is an iPEFI-exclusive king of the hill style betting dApp where users can show their might by placing themselves on the throne for all other penguins to see.


Each round lasts 36, and at the end of the round, the top 5 Penguins with the most time on the throne will split a jackpot prize! The biggest jackpot has been $178K. 

How to make money on Penguin Finance?

The main methods of making money on Penguin Finance is by farming and staking. One thing you will find out after opening the app is that Penguin Finance has established Avalanche tokens mixed with a ton of new tokens.

Penguin Finance Liquidity Provision

Farming liquidity on Penguin Finance is an easy way to earn passive income from your already exisitng LP position.

In order to farm on Penguin Finance, you already need to have LP tokens. LP tokens are received after providing liquidity on one of Avalanche's many DeFi protocol. Once you are done, Penguin Finance will help you add more profit on top of the LP tokens.


Here's how you farm on Penguin Finance:

  1. Open the Penguin Finance app

  2. Navigate to the "Earn" tab at the top of the screen and click on "Farm"

  3. Select the LP farm of your choice and click "Deposit"

  4. Input the number of LP tokens you choose to deposit

  5. Approve the transaction

  6. Profit

You can withdraw your LP tokens and the accrued rewards from the pool at anytime. The rewards come in the form of PEFI token and DEX rewards. 

Penguin Finance Staking

With your newly earned PEFI, you can go to the Stake tab and lock them to earn even more PEFI tokens. The mechanism is straightforward and it represents an additional method to earn using Penguin Finance. 


Here's how you stake PEFI:

  1. Open the Penguin Finance app

  2. Navigate to the "Earn" tab at the top of the screen and click on "Stake"

  3. Input the number of PEFI tokens you choose to deposit

  4. Approve the transaction

  5. Profit

After depositing PEFI, you will be credited with iPEFI tokens representing your staked tokens. You can withdraw the staked PEFI at any time along with the accumulated PEFI rewards.

Price Prediction for Penguin Finance — Can it hit $1000?

Buying and hodling PEFI — the native token of Penguin Finance — is one way of potentially making money on Penguin Finance.

By looking at its current price, it’s natural to think about the chance of PEFI hitting $1000 per token. This can happen sooner, or way in the future, and is determined by a couple of ever changing factors.

Let’s examine the potential growth of the PEFI token by analyzing its tokenomics. PEFI’s current market cap sits comfortably at ${MARKET_CAP}. With {CIRCULATING_SUPPLY} PEFI tokens being in circulation today, that means a price of {PRICE} per PEFI.

How did we come to that calculation? It’s quite easy, the price of a PEFI token is equal to its current market cap divided by the number of tokens in circulation. Dividing ${MARKET_CAP} by {CIRCULATING_SUPPLY} gives us a result of {PRICE} for each PEFI coin. 

By changing the order in the simple formula above we can use it to calculate other things as well. This helps us a lot because we can deduce the market cap of PEFI at different token prices. Then, we can use the result to compare it to the current state of the network and see what would be required for PEFI to hit that price.

At a price of $1000 per token, that means the current market cap of PEFI would equal ${{CIRCULATING_SUPPLY} * 1000}. Remember that we arrived at this number by multiplying the amount of circulating tokens by $1000.

Now let’s shift our attention to the fully diluted market cap.

Some blockchains may have their tokenomics built in a way that only a small percentage of tokens are circulating at the beginning. This can be misleading because we don’t have the full picture and only take into account the current number of coins released in the market.

The fully diluted market cap represents the total value of a coin if all tokens were in circulation. PEFI’s whole supply of tokens is {MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} PEFI which means that no more coins above that number will ever be created.

These tokens are not created at the discretion of a specific entity. They are created automatically by the network to reward different actors that keep it secure.

How does this impact the price of PEFI? Taking into account the current price of a PEFI token, that would result in a fully diluted market cap of ${MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY * PRICE}. PEFI coins that have been burned are not taken into consideration because they have been permanently removed from circulation.

Whether it seems gigantic or not, the number we came to above only takes into account the current price of a PEFI token. Doing the same calculation but with a price of $1000 gives us a result of ${{MAX_SUPPLY - TOTAL_SUPPLY + CIRCULATING_SUPPLY} * 1000} for the PEFI protocol fully diluted market cap.

These are all crucial details to know when calculating if PEFI can reach the price of $1000 per token. If the diluted market capitalization is way too high, the token has little room left to grow. Blockchains in general have no cap on the value they can reach, whether that number seems possible it’s totally up to you.

The future of PEFI depends solely on its growth as a network used by tens and hundreds of millions of users.

If you’re looking to add some PEFI to your portfolio, the most trusted places to get some are Binance and Coinbase.


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