On September 13, MDEX successfully completed the second phase of IMO staking, and the new project was Demeter, a decentralized stablecoin market agreement. The number of MDX pledges in the current period reached 23 million, and the number of xMDX pledges reached 1 billion. The total number of participants exceeded 6,500, and the pledge amount exceeded 350 million US dollars. Platform participating users will apply for new assets with one click at 20:00 on September 17, and the principal can be withdrawn after the lock-up period ends.
Looking back at the IMO data of the first phase of MDEX, the performance is also impressive. The first phase of the IMO project Coinwind was held on May 25, with a total participating exchange amount of 380 million US dollars and 8,874 participants. CoinWind completed the exchange target exceeding 25,726%. In terms of currency price performance, the IMO price of Coinwind is 0.5U, and the current price of Coinwind (COW) is 1.9U, and the currency price has increased by nearly 4 times.
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1. How important is the Maker on the Heco public chain?
Decentralized exchanges and stable currency protocols are the core basic components of DeFi in the public chain ecology. One is the hub of value flow, and the other is the anchor of the value ecology on the chain, just like Uniswap and Maker on the Ethereum public chain, their combination plays a core role in regulating the value on the chain. The two protagonists of this IMO event, MDEX and Demeter, can be understood as Uniswap and MakerDao on the Heco public chain.
So, what are the aspects of the importance of the decentralized stablecoin protocol for the public chain ecology? We all know that the transparency of centralized stablecoins is questionable. For example, the Tether company behind USDT has been widely criticized. In this case, the decentralized stablecoin protocol is obviously more in line with the spirit of DeFi fundamentalism. In addition, the optimization of the underlying facilities of the public chain supports the hot DeFi ecology, and the decentralized stablecoin protocol is the most important piece of the puzzle in the DeFi ecology of each chain, which plays the role of anchoring asset value and smoothing value fluctuations, which is directly related to To the financial stability of the chain, and the security of user assets. Because of this, the wealth effect of the decentralized stablecoin protocol cannot be underestimated. As the ecology on the Ethereum chain continues to prosper, MakerDao has generated more than $63 million in net income since 2021. In the past 12 months, the total supply of DAI (the stable currency issued by MakerDao) has increased by 46 times.
Let’s look at Heco’s on-chain data performance to get a glimpse of Demeter’s growth potential. Heco's TPS speed is 500+, and the block generation time is 3 seconds. It adopts the HPoS consensus mechanism, which has the advantages of low transaction cost, low transaction delay, and high transaction concurrency. It has certain advantages from the perspective of underlying performance. Therefore, the fast-growing Heco public chain also needs a high-quality decentralized stablecoin protocol to consolidate the value stability of the ecology and expand consensus. Demeter, as the second phase of MDEX IMO project, may receive multi-dimensional support from Heco in the later stage. On September 18, Demeter will officially list Heco.
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2. Compared with traditional decentralized stablecoin protocols, Demeter has made multiple innovations
Specifically, Demeter has made the following optimization plans for the two sections of deposit lending and stable currency:
In terms of deposit lending, Demeter has optimized the interest rate model and mortgage coefficient of the DeFi lending agreement. Especially for the establishment of the credit rating model, Demeter incorporates all existing encrypted assets and conducts credit ratings, and introduces richer encrypted asset types such as LP assets, mortgage assets, NFT-fi assets, etc. The lending model between currencies is highly matched, and the interest rate and volume are controlled through smart contracts to provide users with the greatest convenience. This is a unique innovation made by Demeter based on market demand.
In addition, based on security considerations, Demeter's loan/stable coin minting is established through excess collateral. The "credit line" in Demeter is established by borrowers depositing tokens or synthetic assets in Demeter, and different underlying assets generate a The mortgage coefficient represents the value of the user's mortgaged assets and corresponds to the available loan ratio. Moreover, according to the different supply and demand of assets, the loan interest rate of each asset is also correspondingly different. If the borrower's available credit limit falls below 0, the collateral will go into liquidation and be sold to pay off the debt.
In the stablecoin section, unlike MakerDao’s way of staking a single type of cryptocurrency, Demeter supports the value of the stablecoin through a combination of a package of cryptocurrencies, and ensures the security and stability of its stablecoin DUSD through the Heco network with a higher operating speed and convenience, and reduce the cost of use and capital costs.
The core essence of stable currency is price stability, for which DUSD mainly guarantees it through two innovative adjustment mechanisms. One is the Target Rate Feedback Mechanism (TRFM), that is, when the price of DUSD deviates from $1, the Demeter protocol will adjust the asset mortgage ratio accordingly, thereby affecting the supply of DUSD and stabilizing the price difference; the other is the dynamic interest rate supply mechanism, that is, DUSD will be traded at Supply in the form of a dynamic interest rate, the annualized excess supply rate is consistent with the stable fee rate, and the DUSD generated by the excess supply will be distributed in the DAO income pool and the DAO treasury pool, and there is no subjective additional issuance. In addition, Demeter has also set up an excess supply distribution rate mechanism. A certain percentage (0%-100%) of excess supply income and a part of governance tokens will enter the DAO treasury pool, thereby ensuring that the actual annualized excess supply rate is in an adjustable state .
It is worth noting that there is a certain difference between DUSD’s dynamic interest rate supply mechanism and the mainstream algorithmic stablecoin mechanism. The main purpose of DUSD’s excess supply is to hedge against the endogenous growth demand of the currency system.
On the one hand, the excess supply income will not directly enter the circulation to cause inflation, but needs to be adjusted through the treasury first. If necessary, the policy goal of 0% or even a negative inflation rate can be achieved. In the case of a positive excess increase rate, The DUSD that enters the actual circulation after adjustment will also be distributed completely and fairly through the DAO shared revenue pool.
On the other hand, the excess supply of DUSD is actually secured by 5% of the governance token DMT in the treasury as collateral, and the DUSD supply can also be liquidated through the treasury governance token DMT when necessary.
In terms of liquidation, Demeter has set a liquidation penalty rate of 9% and a liquidation tax rate of 3%, which are applicable to mortgage loans and mortgage stablecoins. Once the liquidator's account enters the liquidation state, anyone can pay 103% of the liquidated person's debt. Repay the debt to the system and obtain 109% of the mortgage assets, 100% of the 103% repayment will be repaid by the user, and 3% will be fully injected into the DAO shared income pool for income distribution.
In other words, when the account of the liquidator is liquidated, the person who repays the debt can get 109% of the assets with 103% of the repayment, and this 6% difference can speed up the circulation of the liquidated assets.
In addition, Demeter also has the following highlights, including aggregate mortgage lending and mortgage casting stable currency, which can achieve extreme capital depth, dynamic interest rate supply, decentralized stable currency without access, multi-type asset compatibility and perfect credit level, with Maximize the efficiency of capital utilization, real and stable sources of income, and the advantages of DAO sharing high returns.
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3. Demeter pass DMT has greater potential under the IMO mechanism
As mentioned above, since the first phase of the IMO project Coinwind, the currency price has increased by nearly 4 times. In this round of IMO activities, Demeter may have greater potential by relying on the fundamentals of advanced product design and the capital aspect of token distribution + circulation mechanism optimization.
Let’s first look at the basic settings of the Demeter token DMT. In terms of the distribution of DMT tokens, 60% of them are produced through mining, and the release time is 6 years. Every 180 days, the amount of mining is deflated by 15%. 10% is allocated to the team, unlocked linearly over 12 months. 10% is allocated to investors and advisors, unlocked linearly over 24 months. 10% is allocated to the ecosystem, unlocked linearly over 36 months. 5% is airdropped by the community, divided into 6 years and unlocked linearly. 5% for financial use. DMT has its own deflation model, and it cannot be concentrated in the hands of large investors. The holding amount of the team and investors is not high and the unlocking period is long.
At the same time, Demeter adopts DAO governance, so users holding DMT have autonomous authority, and governance actions such as user key parameter settings and asset allocation are all carried out through DMT voting decisions. In addition, the purpose of DMT is to participate in governance voting, DAO income pool reward distribution and DAO treasury distribution. It can be said that DMT has a high degree of autonomy in its own asset allocation, and its decentralization property is more obvious.
The source of funds for Demeter's DAO income pool is divided into three parts: deposit and loan income after deducting the necessary costs to maintain the operation of the project, 100% liquidation income, and 50% excess supply. These three parts of funds constitute the main part of the project's income. As the number of users increases, the total amount will continue to increase. This is also a good thing for users who can directly participate in the reward distribution of the DAO income pool.
In addition, users can also get rewards by staking DMT, which is equivalent to the bank deposit interest-earning model in the centralized world. The higher the pledge amount and the longer the time, the higher the rate of return.
On the whole, the multi-dimensional combination of concept, application, mechanism, economic model and governance mechanism makes DMT have the basis of high-quality currency. The MDEX IMO event will expose DMT to users in advance.
This IMO event supports MDX and lock-up certificate xMDX pledge to obtain new tokens, and is divided into a pledge period and a lock-up period.(Remarks: The calculation formula for users to obtain new coins = the number of tokens pledged by users / the total pledged amount of the pool * the total amount of new coins IMO.)
After the pledge ends, it will enter the lock-up period, and all tokens will be temporarily locked. The lock-up period is dynamically calculated based on the number of pledged lock-up certificates. During this period, the board income corresponding to the user's lock-up certificates will all be entered into the black hole address for destruction. After the IMO event ends, the pledged MDX or certificate xMDX can be withdrawn in full. The target token, DMT, will generally be claimed within 24 hours, depending on the liquidation progress of the project party.
It should be noted that users who are in the pledge period can also participate in IMO with purchased certificates, but the amount of participation is not higher than 6-8 times the user's own pledge amount.
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4. The Hunter plan helps MDEX become a discoverer and incubator of high-quality projects
Decentralized stable coins and decentralized transactions are the core DeFi protocols in the public chain ecology. Through the second phase of IMO activities, the integration advantages and synergistic effects between MDEX and Demeter began to be highlighted, complementing each other, and exerting the effect of 1+1>2. Coinwind and Demeter are just early representatives of high-quality projects that are mutually empowering with MDEX. At the end of last month, MDEX launched the Hunter plan, which will continuously deliver various high-quality projects to MDEX.
According to the official announcement, the total amount of the Hunter plan is 10 million US dollars. It will give priority to funding projects that conform to the MDEX concept, and focus on supporting high-quality projects in the direction of Metaverse, DeFi, GameFi, and NFT. When selecting popular projects, the MDEX Foundation will comprehensively consider the situation of the project team, data on the project chain, community infrastructure, project innovation and growth space.
Such efforts reveal the determination and ambition of Heco and MDEX in attracting high-quality projects and expanding the application ecology. Since its launch in early 2021, MDEX has emerged on Heco with its original "dual mining" model of liquidity mining + transaction mining, ranking among the top. Later, through the token MDX listing on Huobi and Binance, as well as cross-chain BSC and two phases of IMO activities, it became a core player on the DEX track.
According to data from CoinMarketCap, as of 5:00 pm on September 15, MDEX had a total 24-hour trading volume of more than 234 million US dollars, accounting for nearly 4% of the market share, ranking seventh overall.
What is certain is that the launch of the Hunter plan will create a win-win situation for DEX platform parties and high-quality project parties. As far as the platform is concerned, the high-quality projects incubated will be the reserve force for the future development of the platform, bringing more frequent value flows to the platform, thereby prospering the DEX ecology; After winning the start, MDEX's huge flow effect has extended the life cycle, condensed consensus and expanded the depth of transactions.
In conclusion, whether it is the Hunter plan or the IMO event, it is an opportunity for MDEX and high-quality projects to relay each other and grow together. As for whether MDEX can get what it wants, by assisting the value circulation of high-quality projects in various fields, it will become a leader in the encrypted world. Top stream applications also need time verification. However, these pioneering attempts have endowed MDEX with the role of discoverer and magnifier of value, and will have valuable reference for latecomers.
