Tectonic Finance — Frequently Asked Questions
Everything you need to know about Tectonic Finance, the cross-chain money market on Cronos. Can't find your answer? Join our community on Telegram or Discord.
Getting Started
What is Tectonic Finance and how does it work?
Tectonic Finance is a non-custodial, cross-chain money market protocol built on the Cronos blockchain. It enables users to supply crypto assets to earn passive yield based on dynamic APY rates, and to borrow assets instantly by posting supported collateral. The protocol is governed by the TONIC token, allowing the community to steer protocol decisions. Tectonic Finance supports a wide range of assets including USDC, USDT, WBTC, WETH, CRO, LCRO, VVS, ATOM, ADA, XRP, LTC, TONIC, and more — with additional assets added through governance.
How do I connect my wallet to Tectonic Finance?
To connect your wallet to Tectonic Finance, you need a compatible Web3 wallet such as MetaMask or Crypto.com DeFi Wallet. Make sure your wallet is configured for the Cronos network (Chain ID: 25). Click the "Connect Wallet" button in the top navigation, select your wallet provider, and approve the connection request. Once connected, you can supply assets, borrow, and manage your positions directly from the Tectonic Finance interface.
What networks does Tectonic Finance support?
Tectonic Finance is primarily deployed on the Cronos blockchain, developed by Crypto.com. Cronos is an EVM-compatible chain that enables fast and low-cost transactions. As a cross-chain money market, Tectonic Finance is designed to expand its multi-chain capabilities over time, supporting assets bridged from Ethereum and other networks through wrapped token standards.
Lending & Borrowing
How does supplying assets on Tectonic Finance work?
When you supply assets to Tectonic Finance, they are pooled into a shared liquidity pool. In return, you receive tTokens (e.g., tUSDC, tCRO) representing your share of the pool plus accrued interest. Interest accrues every block based on the current supply APY, which is determined algorithmically by the utilization rate of the market. You can withdraw your supplied assets at any time, as long as there is sufficient liquidity in the pool. Additionally, you may earn bonus TONIC token rewards on top of the base supply APY.
How does borrowing on Tectonic Finance work?
To borrow on Tectonic Finance, you must first supply assets as collateral and enable them as collateral in your dashboard. Your borrow limit is determined by the collateral factor of each supplied asset. You can then borrow up to your borrow limit in any supported asset. Borrow interest accrues per block at the current borrow APY. It is critical to monitor your borrow health factor — if your collateral value drops too close to your borrow value, your position may be liquidated. TONIC rewards can offset borrow APY, making the effective net borrow cost significantly lower on some markets.
What are the risks of using Tectonic Finance?
Like all DeFi protocols, Tectonic Finance carries certain risks users should be aware of. These include: (1) Smart contract risk — despite security audits, no protocol is completely immune to vulnerabilities. (2) Liquidation risk — if the value of your collateral falls below your borrow threshold, your position may be partially liquidated. (3) Market risk — rapid price movements in collateral assets can affect your health factor. (4) Interest rate risk — variable interest rates can change significantly based on market conditions. Always borrow responsibly and maintain a healthy buffer above your borrow limit when using Tectonic Finance.
What happens during liquidation on Tectonic Finance?
When your borrow balance exceeds your borrowing capacity on Tectonic Finance (i.e., your health factor drops below 1), your position becomes eligible for liquidation. A liquidator can repay up to 50% of your outstanding borrow and receive your collateral in return at a discounted price (the liquidation incentive). This process is permissionless and can be triggered by anyone. To avoid liquidation on Tectonic Finance, maintain a significant buffer between your borrow balance and your borrow limit, and monitor your position regularly, especially during periods of high market volatility.
TONIC Token & Rewards
What is TONIC and what role does it play in Tectonic Finance?
TONIC is the native governance and utility token of Tectonic Finance. It serves multiple purposes within the ecosystem: (1) Governance — TONIC holders can participate in protocol governance votes to shape the future of Tectonic Finance. (2) Rewards — TONIC is distributed as additional incentive rewards to suppliers and borrowers across all markets on Tectonic Finance. (3) Staking — TONIC can be staked to receive xTONIC, which unlocks boosted APY on the Tectonic Finance platform. (4) Vaults — xTONIC can be locked in time-based vaults to multiply reward boosts, with longer lock periods providing higher multipliers.
How do TONIC reward boosts work on Tectonic Finance?
The Tectonic Finance reward boost system allows users to multiply their TONIC rewards by locking xTONIC in vaults. The more xTONIC you lock, and the longer the lock duration, the higher your boost multiplier. This means active Tectonic Finance participants who lock xTONIC can earn significantly higher effective APYs compared to non-boosted positions. The boost applies to both supply and borrow reward APYs. To maximize returns on Tectonic Finance, consider staking TONIC → receiving xTONIC → locking xTONIC in a vault for your preferred duration.
How is the Net APY calculated on Tectonic Finance?
The Net APY shown on Tectonic Finance markets represents the combined effect of the base interest rate and TONIC reward incentives. For supply, the Net Supply APY = Base Supply APY + TONIC Reward APY. For borrowing, the Net Borrow APY = Base Borrow APY − TONIC Reward APY. In some cases on Tectonic Finance, the TONIC rewards on borrow can exceed the base borrow cost, resulting in a negative effective borrow rate — meaning you are effectively being paid to borrow. The displayed rates update dynamically as market conditions change.
Security & Protocol
Has Tectonic Finance been audited?
Tectonic Finance has undergone security audits by reputable third-party blockchain security firms. The protocol also employs multiple risk management mechanisms including collateral factors, reserve factors, and an interest rate model designed to maintain solvency. While Tectonic Finance takes security seriously, users should always be aware that DeFi protocols carry inherent risks. We recommend reviewing the official documentation and audit reports available in the Tectonic Finance whitepaper before committing significant funds to the protocol.
How does Tectonic Finance governance work?
Tectonic Finance is governed by its community of TONIC token holders. Governance decisions on Tectonic Finance can include adding new markets, adjusting collateral factors, modifying interest rate models, allocating treasury funds, and other protocol parameter changes. TONIC holders can propose and vote on governance proposals. The decentralized governance model ensures that Tectonic Finance evolves according to the will of its community rather than any centralized entity. Participating in governance is one of the core utilities of holding TONIC.