MMF Money

The first hybrid CDP and partially collaterised stablecoin platform: Mad USD (MUSD). The MUSD token uses 2 stabilising + minting mechanisms that provides backing for the MUSD token. The MUSD token can be used just like any other traditional stablecoin. Hybrid CDP and fractionalised-algorithmic stablecoin: Wut?

As the name implies, our team has taken the best aspects of a CDP, alongside the best aspects of a fractionalised-algorithmic stablecoin to synergistically combine it into a stablecoin that has multiple stabillising mechanisms to maintain peg, while allowing the MUSD token to be capital efficient. The $MUSD token is fully supported by the entire MM Finance engine that currently consists of:

A leading AMM/DEX
Yield-Optimiser platform for better auto-compounded yields,
An in-house stableswap
A soon-to-launch CDP platform
Fractional algorithmic backing of MUSD token thru $MMF and $USDC. This is unlike any other stablecoins that does not have the power of a full ecosystem that backs the stable token. The entire MM Finance ecosystem constantly generates huge revenues that is able to constantly be used to increase backing for MUSD, while also increasing utility for the MUSD token.

The ultimate gameplan for the MUSD token is to allow it to be fractionally backed by both USDC as well as MMF tokens, in some similarity to how FRAX and FXS works hand in hand to create a positive flywheel. This will heavily push up the value of $MMF token (which is the speculative aspect of the ecosystem), while heavily pushing up the market cap of the $MUSD stablecoin token. Higher market cap equates higher adoption, equates higher earning fees for all MM Finance ecosystem assets. Initially, we used a LUNA + UST example as they were the shining examples of how a stablecoin could rapidly increase its marketcap. There are some similarities in how MUSD could operate like LUNA + UST in the minting mechanisms. But in reality, MUSD is more similar to FRAX & FXS due to a 75% collaterization ratio (LUNA has 0% CR as it does not hold stablecoins)

In light of the current ongoing LUNA & UST saga, we are changing our documents to more accurately reflect how MUSD + MMF can still maintain a positive flywheel while having aversion to the same crisis that LUNA & UST is facing currently. We believe that this clarification is important as it will provide clarity to our team's plans, and prevent opportunistic FUD-ers from lending this opportunity to take a swipe at our project.

The fact that MUSD has a full ecosystem backing it right off the bat is a huge signal to its potential future success. We foresee the day where the MUSD token will eventually be one of the top stablecoins given how the stablecoin provides a strong flywheel effect for the entire MM Ecosystem, thus eventually resulting in higher adoption of the stablecoin itself.

How does the introduction of $MUSD benefit MM Finance and its tokens?

We highly recommend you to read our MMF Money platform docs that will touch on the different details that showcase how MUSD helps to create new revenue streams that are returned to holders of our native tokens. But let us describe a few:

MMF Money CDP aspect earns fees for loaning out MUSD tokens, these fees will be redistributed back to $BURROW holders
Stableswap platform generates huge speculation and trading fees from all our new products, hence more fees going towards liquidity providers and POL for $METF
Algorithmic Market Operations (AMOs) will be deployed. These AMOs are advanced yield generating strategies that are deployed by the treasury to grow revenue for $BURROW holders. Currently, there are 4 AMOs planned, where we anticipate close to 50k daily revenue from these AMOs to be redistributed back to $BURROW holders (after all platform aspects are up and running).
There will be $BURROW buybacks and burns (BBB) implemented to increase scarcity of the $BURROW token. With multiple income streams, we are certain that $BURROW token will steadily increase in value over time

Due to the way the team will pair the liquidity of the $BURROW token (BURROW-MMF), any buys on this token will result in a subsequent buy on $MMF as well, thus pushing the prices of both tokens up. Our team has spent huge amounts of time conceptualising the set of strong tokenomics above that will guarantee the strength of the $BURROW token. With a strong $BURROW token, we anticipate huge buys on $MMF as well, which thus creates the positive flywheel

The MUSD token will be issued out through a system where interest-bearing tokens (ibTokens) are taken as collateral. This means that when a user deposits their assets like USDC, USDT, MMF and SVN into platforms such as Mimas Finance and Tectonic, they will receive ibTokens. These tokens are generally invisible to the end user, but are received as a form of a “receipt” that is returned back to the lending platform to redeem your initial collateral. These tokens are generally illiquid, but our platform will precisely allow users to gain liquidity from such illiquid assets.

The MMF Money platform will utilise an over-collaterised approach to mint MUSD tokens when using the CDP approach: This means, the platform will take interest-bearing tokens (ibTokens) as collateral. At the same time, the MMF Money platform will provide a partially-collaterised approach to mint MUSD tokens: This will allow users to supply USDC and MMF tokens to mint MUSD tokens. All in all, these 2 approaches combined will allow MUSD to adopt a super strong peg, while allowing the protocol to have strong earnings potential to reward $BURROW holders. This approach will be the first of its kind where a USD stablecoin combines a over-collaterised approach with a fractional approach.

In-depth to over-collaterised approach:

Fractional MUSD minting:

This will constitute the 2nd phase of our MUSD development efforts, and more detailed information will be shared closer to launch. In general, users will be able to lock USDC and MMF tokens to receive MUSD tokens. This act will lock MMF out of circulation, while providing an end user with the MUSD token that opens up a world of earning opportunities. As a stablecoin, MUSD can be used for yield farming in MM Finance, for safe and stable yields. In the mid-term, MM Finance will seek to get MUSD to be adopted as one of the main native stablecoin within of Cronos, where MUSD can also be loaned out to money markets for even juicier yields.

StableSwap

All chains require the existence of a stableswap pool with deep liquidity to facilitate more efficient swaps across different types of stablecoins, and to allow for better rates for arbitrageurs that help to balance out market liquidity. This typically means that swaps between stablecoins such as DAI/USDC/USDT can be conducted at ultra low fees and slippage — better experience for users of a chain. Less liquidity (less TVL) is needed in order to achieve low slippage trading as opposed to how traditional LP pairs work, hence lesser emissions required.

Building up a strong stableswap ecosystem eventually also allows for other projects to build on top of. This is why we see so much stablecoin innovation within of Ethereum Mainnet where there are all sorts of stablecoins that serves different purposes.

At MM Finance, we seek to be the number 1 DeFi ecosystem. To get there, a stablecoin swap is a necessary endeavour. With a strong stablecoin ecosystem, we will be able to net huge trading fees which are largely used to form Protocol Owned Liquidity (POL) as per our whitepaper. This results in stronger and more stable pricing for our native $MMF token. A stablecoin swap will be deployed in the coming days as the first layer of the foundation, where users will be able to stake a “3MM” LP of DAI/USDC/USDT to earn $MMF rewards.

Self Repaying Loan

We will orientate the platform into a “self-repaying loans” platform. This means that any loans of MUSD that you take out gets repaid overtime (and you net a gain).

Let’s say you decide to take a loan of USDC through the use of USDC (as collateral). You will typically get close to > 3% APY on supplying your USDC liquidity into platforms such as Tectonic and Mimas. Thereafter, you will deposit your interest-bearing USDC (receipt tokens) into our MUSD platform. You will be able to get close to 90% LTV for a stablecoin. You will be charged 0.05% upfront, and 0.5% per annum on your loans (the lowest rates on most money markets). Our team is considering the best interest rates to apply on loans (generally the lower is the better). This will net you a loan that is self-repaying by nature of how supplying and borrowing works.

One of the best parts of using stablecoins is that you can perform a leveraged borrowing of MUSD to supply more USDC back into the money markets. Typically you will be able to get over 20% APY with a good leveraged strategy (and you typically are at very low-risk when you leverage stablecoins). These kind of gains on a stablecoin is super juicy, and beats the yields on popular protocols such as Anchor.

The aim of our platform is to take as low fees as possible on the loans, so that users can net faster gains, so as to promote heavier usage of Cronos ecosystem products — Tectonic, Mimas. This will create a flywheel effect where more capital enters into Cronos chain, and plenty of such liquidity will find its way into buying some of our favorite ecosystem tokens in MM Finance. With the collected fees, they will be redistributed to holders of the share token for this new platform — $BURROW holders.

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Last updated 2 years ago