💱Introduction

METF Documentation!

Mad Meerkat ETF v2.0 (as of June 2022)

• Removing of inflationary monetary policy; no more issuance of METF tokens which means METF is hardcapped. Bonding removed from the platform.

• Creation of a protocol profits distribution staking mechanism; this is done through the buying of METF tokens from protocol profits for re-distribution. This will help apply a buy pressure on METF constantly.

• Encourage long-term holders We reduce the reliance on inflationary mechanics in a down-trending crypto market to promote growth. METF was initially built for long-term believers of the MM ecosystem. We believe it is only rightful to reward such holders. Towards that end, we will place a prime focus on capital appreciation of the METF token through the introduction of the afore-mentioned changes.

  If you recall, the METF AUM has been steadily earning profits. All these profits will go towards a protocol profits distribution pool. At the same time, the trading fees generated from the DEX will also go towards the same staking pool. The idea behind this is strongly aligned with the original intention of the METF token — a token that represents ecosystem health. Protocol volume and profits are a strong indicator of ecosystem health. When we re-distribute them via a staking mechanism, the free-market will re-balance itself in a manner appropriately, so as to allow the METF token to gain in value hedged against the profits generated by the protocol. This protocol will shed its “degenerate” status, but focus more on sustained growth in token value through protocol profits distribution. The upgrades has been outlined here: https://medium.com/@MMFinance/metf-tokenomics-upgrade-2d72cc408a15 The texts below and onto other pages are briefs about METF v1.0 where some of the contents are no longer relevant. But we will not removing these contents so our users are aware of the changes that has been made comparing v2.0 and v1.0.

What is MM ETF (Mad Meerkat ETF)?

MM ETF is the first decentralized ETF protocol that runs on METF token. The DTF term is thus coined by our team as the DEX Traded Fund, being the first of its kind.

Each METF token is backed by a basket of assets (e.g., MMF, METF-MMF LP Tokens etc etc) in the METF Assets Under Management (AUM), giving it an intrinsic value that it cannot fall below. All of these assets come from the MM Finance DEX, and hence form part of the DEX Traded Fund.

The DEX Traded Fund seeks to track high performing assets in the MM Finance DEX, with strong value accrual strategies that will be outlined in this set of docs.

METF = Ecosystem Token MM ETF = Mad Meerkat ETF (platform)

What is the point of METF?

Our goal is to build a policy-controlled Decentralized ETF system, native on the Cronos network. In the long term, we believe this system can be used to optimize for stability and consistency so that DTF can function as a global unit-of-account and medium-of-exchange currency which represents a basket of goods/investments. In the short term, we intend to optimize the system for growth and wealth creation.

We intend to achieve price flatness for a representative basket of goods without the use of fiat currency, in order to allow the cryptocurrency industry to detach once and for all from the traditional finance world!

What is an ETF in the traditional world?

An exchange-traded fund (ETF) is a type of pooled investment that operates much like a mutual fund. Typically, ETFs will track a particular index, sector, commodity, or other asset, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can. Read more about ETF here: https://www.investopedia.com/terms/e/etf.asp How are we replicating this concept in crypto? Simple, the AUM contains a basket of goods and every METF token you hold represents a share of the AUM.

How do I participate in MM ETF?

There are two main strategies for market participants: staking and minting. Stakers stake their METF tokens in return for more METF tokens, while minters provide LP tokens or MMF tokens in exchange for discounted METF tokens after a fixed vesting period.

How can I benefit from MM ETF?

The main benefit for stakers comes from price appreciation and supply growth. The protocol sells METF bonds (which mints new tokens) when there is a healthy premium. The premium that the protocol earns will be distributed to the stakers. Due to the nature for which METF tokens are produced, it is in the protocol's best interests to ensure a healthy premium for the METF token. The only way to ensure healthy premium, is for the token to accumulate more assets to raise the intrinsic value of the token. Over time, the protocol will be adjusted with policies to increase METF floor price. This act will reduce the inflation of the total token supply, while allowing the protocol to buyback its own tokens, further reinforcing the idea of a rising price floor.

The main benefit for bonders comes from price consistency. Bonders can commit a capital upfront and are promised a fixed return at a set point in time; that return is given in METF tokens and thus the bonder's profit would depend on METF price when the minted METF matures. Taking this into consideration, minters benefit from a rising or static price for the METF token! This concept is adapted from popular rebasing-DAO protocols. The biggest difference; we do not rebase. Instead, we utilise the bonding system to accumulate valuable MM ecosystem assets that contribute to our rising price floor strategy.

3 Main Ways to Earn from METF Protocol

There are 3 main ways to earn from the METF protocol as a user.

1. Bonding

2. Staking

3. Price appreciation

Bonding: This is a slightly more complicated strategy to understand. Essentially, the METF protocol needs to buy assets required for its strategy. It does so by offering bonds. These bonds are sold to users at a varying rate of discount, between 3% - 10%. When users purchase a bond, they need to provide tokens that the protocol wants. These could include tokens like MMF, METF-MMF, MMF-SVN etc. When users buy a bond, METF tokens will be issued to the user over a vesting period of 5 days. The discount rate mentioned, refers to the additional/bonus METF tokens a user will get. Let's say you manage to snag a 10% discount, that would mean that you would have earned 10% more METF than the principle token you put in.

Staking: Staking is a slightly more straightforward tool that most users in DEFI should understand. This refers to the staking of your METF tokens in a pool that issues out more METF tokens to you! The reason for this is so that METF token holders get to earn "interest" while awaiting for price appreciation of their METF tokens.

Price appreciation: This is the most straightforward. As with all investments we want the price to appreciate. In this case, we aim for the METF token to appreciate in price due to the multiple protocol re-investment strategies. For a user, simply HODL METF and await while the team does its magic to build a proper Dex Traded Fund such that ecosystem value increases over time.

ETF with rising price floor strategy

ETFs are generally governed by policy makers that allocate funds to track certain indexes, sectors, etc. The primary value accrual strategy for traditional ETFs are to ensure a balanced basket of assets where price movements are key. With METF, not only do we enjoy price movements of underlying assets, there are other value accrual strategies. These will include 1) Yield farming (for stable yields). 2) Investments (for VC-styled, home run yields). 3) Protocol-Owned-Liquidity accumulated from trading fees.

Yield farming will work because the yield farming policies will be governed by the very people who built the MM ecosystem. This means the most optimal yield farming strategies will be employed to stably accelerate the growth of the METF Assets Under Management (AUM).

Investments are typically riskier, but all such investments will always be employed in the most informed, and risk-managed style, as these investments will once again be managed by policyholders who have huge insights into the MM ecosystem. Even with a quick glance, simply investing in all MM ecosystem launchpads, would have yielded 4 out of 7 wins (mid to long term investments). All such forms of investments, be it whether it is a win (in terms of financial value), serve but 1 super important purpose, accelerate the growth of the entire MM ecosystem, which will accelerate all asset growth.

Needless to say, the MM ecosystem now produces one of the highest trading volumes. As Cronos scales up into becoming a big player in the blockchain space, this trading volume is sure to exponentially increase, and thus build higher POL fee value for the METF AUM.

As the MM ecosystem scales (with total ecosystem TVL nearing 1billion USD - stats from DefiLlama), there are still huge opportunities for this entire ecosystem to grow exponentially. This MM ETF was created to provide MM ecosystem users with the ability to invest in a token that derives its fair value from MM ecosystem growth, whereas, if you were to invest in any of the other subsidiary projects, your project is fully exposed to the price action and tokenomics of that one project.

The MM ETF takes a contrarian, more risk-managed approach of balancing a basket of MM ecosystem assets to back the value of the METF token. With a risk-managed approach, does this then mean that we will not see great price appreciation (since fewer risk equals fewer rewards)? The answer to this is NO. A risk-managed approach simply reduces your downside risk as there's a backing value for which the METF token can never fall below. Should that happen, Assets Under Management (AUM) will be utilised to push up METF prices, thus creating a price floor in which it won't fall under. For Clarity: The value of METF will fluctuate but the intrinsic value will not Similar to OlympusDao, the buyback happens when it falls below a certain price. In OlympusDao case, its $1 and in our case, its 1 MMF.

But because MM ETF combines the best-in-class tokenomics with healthy circulating supply inflation, it makes little sense for value to decrease. And also because of the "rising price floor" strategy mentioned in the introduction, it only makes sense for investors to continuously accumulate METF tokens that will seek to increase floor price, further reducing long-term risk.