Reinventing Stablecoins?
20 Oktober 2021 - 5:16PM
NEWSBTC
Ruling the headlines on the BSC network is now a norm for the Mars
Ecosystem. Armed with some of the highest APRs in the DeFi space
and an ever-growing TVL, the team recently earned a Monthly Star in
the Binance Smart Chain “Most Valuable Builders” program and is
working towards reinventing the utility of Stablecoins. With BSC
supporting Mars’ products and technology, it adds a layer of
credibility to the constantly evolving Mars ecosystem. In this
write-up, we will deep dive into stablecoins and what Mars
Ecosystem means to the future of DeFi and crypto. Stablecoins were
first introduced as a blend of stability of fiat currency and
mobility of cryptocurrencies. Generally, they are backed by
underlying assets or algorithms. Stablecoins ensure that money is
borderless and accessible to everyone without the need for a bank
or a central authority. Simply put, if Bitcoin is decentralized
gold, then stablecoins are decentralized currencies. However, with
time and usage, specific attributes of stablecoins have turned them
into the antithesis of decentralization. Also, they have ignited
the fire for the genesis of the Mars Ecosystem and its vision to
reinvent stablecoin with decentralization and scalability intact.
Current Landscape of Stablecoins The market cap of all stablecoins
is worth nearly $128 billion with Tether (USDT) accounting for more
than half of the value. Despite not having one decentralized
stablecoin that fulfills the basic requisites, the stablecoin
market enjoys a huge upside, courtesy of DeFi. Every decentralized
stablecoin protocol needs 1. Price stability, 2. Overall
decentralization, and 3. Scalability. Today, most of the
stablecoins are overcollateralized which directly affects their
scalability. Also, many stablecoins are pegged to assets deposited
in centralized systems which effectively goes against the ethos of
blockchain technology and DeFi. Though Algorithm-based stablecoins
do away with the collateral issues, their price stability is a huge
concern. Major Concerns of Stablecoins Currently, every stablecoin
protocol has its share of tradeoffs with regards to the three
properties. However, all the issues boil down to two key concerns.
They are 1. The positive externality problem, 2. The integration
problem. The positive externality problem reflects the imbalance in
efforts to reward ratio for the stablecoin protocols. The cost of
producing and maintaining stablecoins is borne by the protocol and
its users. However, stablecoin’s value is generated in DeFi
applications. The financial incentive for the stablecoin protocol
is minimal which often ends up with a shortage of supply. The
integration problem is quite similar to the previous concern of how
stablecoins’ value is solely decided by DeFi apps. Stablecoins are
impacted by their ease of integration with various DeFi protocols.
If a stablecoin cannot be integrated with a certain DeFi protocol
easily, the stablecoins’ stability is affected. To resolve these,
Mars Ecosystem stands apart as a decentralized stablecoin paradigm
with an all-inclusive system to capture the true utility of
stablecoins. Mars Ecosystem 101 As a potential solution to the
positive externality and integration concerns Mars Ecosystem
presents a three-part system. Their efforts are concentrated on
producing a stablecoin ecosystem with high price stability, high
decentralization, and scalability potential. These efforts have
been recognized by the Most Valuable Builder (MVB), an initiative
by Binance Smart Chain to support innovative projects. The Mars
Ecosystem was one of the winners of the MVBIII – September Monthly
Stars. Also, the Mars Ecosystem will receive key support from BSC,
not limited to financial influx. The mentoring and technical
assistance provided can be a gamechanger for the Mars Ecosystem.
The three cores of the Mars Ecosystem are; Mars Treasury This is
the foundation on which the Mars Ecosystem resides and grows. Its
building blocks are $USDM or USD-Mars (Mars Ecosystem stablecoin)
and $XMS or Mars Ecosystem Token (Mars Ecosystem governance token).
Their treasury is built to support multiple types of cryptos from
the likes of BTC to DeFi blue chips. The team is equipped with
minting and redemption mechanisms for the circulation of $USDM.
With a set 1:1 ratio, users can deposit their assets into the Mars
Treasury to mint $USDM and vice-versa. The circulation of $USDM
fuels the value of $XMS which can be used to participate in the
governance of the protocol. Mars Stablecoin $USDM stablecoin can be
minted with $1 worth of any of the Mars Treasury white-listed
assets. The maximum supply of the $USDM is relative to the market
cap of $XMS. This cap in supply is part of their mintage control
mechanism which accounts for users’ behavior to ensure the price of
$USDM is always stable. Also, an anti-bank run mechanism has been
enabled to protect $USDM from mass shorting and a potential
collapse. This is ensured by incentivizing the holding time of the
token. Malicious actors trying to encash on the difference in the
collateral ratio of $USDM and $XMS fail in their efforts as quick
sales are burdened with slippage losses. This makes bank runs an
unfeasible activity in the Mars Ecosystem. Mars DeFi Protocols This
is a series of functionalities being added to the Mars Ecosystem to
facilitate transactions, improve liquidity, and enhance $USDM’s
utility as a medium of exchange and store of value. First in the
series of DeFi protocols is Mars Swap which is an automated market
maker-powered DEX similar to Uniswap. Mars Swap This DEX is
designed to provide 24/7 liquidity for $USDM and other DeFi
protocols that adopt $USDM as a token of exchange. Also, the
transaction fees generated on Mars Swap are pushed back into the
Mars Treasury where liquidity providers and $XMS holders and
stakers are awarded. Since $USDM users earn without leaving the
ecosystem, the positive externality issue is resolved. Also, the
value generated here incentivizes the holding of $XMS which in turn
stabilizes $USDM as the latter’s supply is based on the former’s
market cap. Staking and Liquidity Provision September saw the
launch of Mars Ecosystem liquidity farms and pools. Currently, the
total locked value has crossed $250 million with the average APR
being more than 1000% Already, eight pools have been created for
users to stake their $XMS and earn BNB, ETH, CAKE, or more XMS as
per their preference. Alongside, more than 10 yield farms have been
set up for liquidity provision. 0.25% of the transaction fees on
Mars Swap go directly to liquidity pools. Also, the team is
introducing many liquidity pools and farms in unison with other
projects in the BSC network. Venus Protocol, Kalata Protocol,
ForTube, Helmet Insure are some of the projects they have partnered
with in creating liquidity pools and farms. Apart from this, they
have coupled sustainability with the growth of farms and pools
using a linear vesting period. Simply put, the $XMS token allocated
to investors (8%) and the team (10%) will be slowly released. This
means, as per $XMS’s total supply, 180 million $XMS will be
released for periods of 18 (investors) and 36 (team) months. The
vesting period will start from our genesis launch which will be
held in a month. Future of Mars Ecosystem Community-first is how
the Mars Ecosystem team is approaching the future. Special emphasis
will be placed on the direction that their community wants to take,
in unison with their roadmap that includes launching more DeFi
protocols and incubating nascent projects. Everyone holding $XMS
tokens can participate in MarsDAO and contribute to the evolution
of the Mars Ecosystem. Also, they will be opening their NFT
collection to the community to purchase alongside a few airdrops
for lucky winners. The Boarding Pass NFT and the Captain NFT have
been designed to reward those who have contributed to the initial
MarsDAO community. They believe that ‘To the Mars’ will be the new
‘to the moon’ in the crypto and DeFi community. But, in place of
the volatility, we will see if the stablecoin $USDM will grow into
being the reserve currency of the DeFi world. Image
by WikiImages from Pixabay
Uniswap (COIN:UNIUSD)
Historical Stock Chart
Von Mär 2024 bis Apr 2024
Uniswap (COIN:UNIUSD)
Historical Stock Chart
Von Apr 2023 bis Apr 2024