Frax Finance Review: Fifth Gen Algorithmic Stablecoin, Staking, and Bonds

FRAX is a fifth generation algorithmic stablecoin. It is partially collateralized, and partially stabilized algorithmically. FRAX’s collateralization ratio (CR) increases or decreases, as supply and demand changes. The token can become more algorithmic, or more collateralized, as it seeks a stable value.

For example, if FRAX is over $1, it enters an expansion phase. In this phase, it becomes less collateralized. Less USDC is required to mint it. When the price is under $1, its collateralization rate increases. FRAX can even become fully collateralized, if demand is low! In this case, it would essentially be wrapped USDC.

  • The algorithmic portion of FRAX is now 16 million. This value is very stable. FRAX’s algorithmic value is just as stable as the collateralized portion. Over time, the algorithmic portion will likely increase, as user trust increases.

Important Links:

Where will the collateralization ratio settle?

The developers don’t know where the collateral ratio will settle! It is fully determined by the market. It is possible that FRAX could become fully algorithmic. It is also possible, it could become entirely collateralized. Either way, FRAX will always be redeemable for $1.

FRAX’s two-token economy

The Frax.finance ecosystem consists of two tokens.

  1. FRAX is a fractionally-algorithmic stablecoin.
  2. Frax Shares Token (FXS) is a governance and incentives token.

Deeper into Frax Shares (FXS)

Frax Shares (FXS) is a volatile token. It is deflationary. It captures the seigniorage value that is created, when under-collateralized FRAX is minted. To mint FRAX (when under 100% CR), users must also supply FXS, which is burned during the minting process.

  • For example, when a user mints 100 FRAX at an 89% CR, they would need 89 USDC and 1.7 FXS tokens. The 1.7 FXS is burned. The 1.7 FXS tokens captures the seigniorage value, by burning it and reducing the supply. (image below)

The FXS token captures value in four ways:

  • It is burned when minting FRAX.
  • It collects fees from the minting process.
  • It collects fees from redemptions.
  • It also collects fees from unused collateral.

Recollateralization and Buybacks

Sometimes, FRAX needs more collateral. Sometimes, collateral needs to be reduced. In this case it, will undergo re-collateralization, or buybacks (more here).

  • If FRAX is under $1, a user can deposit USDC to receive FXS, with a bonus of .75%. This helps to re-collateralize the protocol.
  • When there is excess collateral, buybacks will happen. The FXS token will be bought and burned with extra funds.

New features for FRAX v2

Improvements coming in v2 include: FRAX bonds, new collateral types, and a vAMM. Frax will soon be expanding to Binance Smart Chain.

FRAX Bonds

The community has voted to add FRAX bonds. These bonds will be tied to the collateral ratio.

Staking

Users can stake in the liquidity pool, for FXS rewards. The more that FRAX becomes algorithmic, the more FXS will be emitted.

The staking rewards are high at a range of 35% – 100% on stablecoins. This is a very good reward for stables.

The problem with Algostables, like ESD and DSD

Unfortunately, most algorithmic stablecoins aren’t stable. They don’t do what they were designed to. They can get stuck under $1, when the price to buy bonds, doesn’t make sense. The mechanics of these coins aren’t effective.

I noticed another problem with algostables, when I was invested in DSD. It had an issue with whale manipulation. As price moved towards expansion, large DSD holders would dump on those seeking to move it into expansion. This stopped it from functioning as intended.

FRAX has very different mechanics, which hopefully will fix these issues. The adjustment of the collateralization ratio, has created stable value in a portion of the coin, without collateral backing. It maintains its peg, and doesn’t have a manipulation problem. The experiment seems to be working so far.

Conclusion on Frax Finance

I see enormous potential in algostables. But, they’re far from perfected. Coins like ESD, DSD, or Debase can’t maintain a stable value. They more or less function as a financial game. FRAX, on the other hand, maintains its $1 peg.

My biggest issue with FRAX, is that it uses USDC as collateral. USDC can be frozen, so this could present a problem if a large portion of the reserves was no longer backed. I think they should transition to a more decentralized stablecoin (or a basket of coins), which can’t be frozen.

As FRAX gains trust, I think it will become more algorithmic. Tether is not fully backed, but maintains a stable value. This shows me that user trust is a major factor in creating price stability for stablecoins.

FRAX v2 is also coming soon. It will be interesting to see if these bonds will further stabilize the price. The bonds will also add another method of profiting on this protocol.

I love to see innovation. FRAX is pushing algostable tech forward and creating a first of its kind product. The team seems competent, and intelligent. I’m looking forward to testing the features implemented in v2. We’ll see if the experiment succeeds, but so far it is looking very positive.

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Kitten.Finance Review: Advanced AMM, Binary Options, Low Gas Fees

Kitten.finance is an advanced defi ecosystem. It’s products will include: a next-generation AMM, advanced order types like: limit and stop orders, binary options, a rebasing stablecoin, lending, and farming to fairly launch its tokens. It solves important problems like: impermanent loss, high gas fees, and even allows one-sided token launches, with no ETH!

This project is innovative, and the devs are geniuses. They are tackling hard problems, and seem to have a grand plan. Their dapps address key issues that face defi users and developers alike. The only criticism i do have, is the name. I think they should rebrand, but for now, i hope they just keep working hard to realize their vision.

Kitten Finance Products include:

  • Kittenswap – a new type of AMM, w/ advanced features and order types
  • Alpha Dex – binary options, compounding strategies
  • 12 farming pools for fair tokens launches
  • 4 tokens: KIF, DEX, kBASE, and LIQUID

Important Links:

Kitten.Finance’s Products

1) Kittenswap, an innovative new AMM

Kittenswap is a gas friendly AMM, with advanced order types like limits and stops. It doesn’t need liquidity providers, and it solves impermanent loss. It can be used to conduct IKO’s, or Initial Kittenswap Offerings, with only one-sided liquidity. NO ETH is required. It is a superior way to conduct an IDO. Devs can use advanced market making orders to launch a token, without needing to conduct a pre-sale to raise Eth!

Read about how their AMM can work without LPs here.

Kittenswap will also have advanced order types like: limit orders, wide-limit orders, and stops.

Advanced Market Making Orders

The team recently used Kittenswap’s Advanced Market Making Order, to launch its new $LIQUID token. They only provided one side of liquidity, no ETH. This proves that their new AMM works, and pre-sales are no longer needed to raise ETH for liquidity. This is game changing tech for token launches!

Advanced Order-Types on Kittenswap

Their AMM will offer advanced order types including: limit orders, stop orders, wide limit orders, automatic market-making orders. Limit orders are now live on the testnet. (the image below is the interface)

Their medium post here, discusses how stop orders can be used as collateral for loans. The stop orders guarantee that a token price will be above a certain point, at a certain time/date. Users will be able to borrow funds based on their stop orders.

  • Here’s an example: Betty is able to borrow 6000 USD, because her “Sell stop 10 ETH @ 700 USD” order guarantees the value of her 10 ETH is higher than approximately 7000 USD.”

Another type of order launching soon, is wide limit orders. This is a limit order that covers a range of prices.

Kittenswap = Lower Gas Fees

Kittenswap contracts are optimized for lower gas fees. Swaps are about 1/3 the cost of Uniswap. (I bought some $LIQUID and it cost $5, compared to Uniswap’s $15.)

2) AlphaDex – Binary Options and Auto-Staking

AlphaDex is a dapp that offers binary options, auto-staking, and compounding strategies. Users can buy bullish/bearish shares, which payout if a user correctly predicts price direction. The dex uses a time-weighted average price (TWAP) to combat oracle manipulation, or flash loan attacks. (V2 in coming soon)

  • The $DEX token is for governance, dividends, buybacks, and staking on Alphaswap.

Version 2.0 of AlphaDex will have auto-staking. This will compound wins/losses into the next round. Users can choose strategies like:bull, bear, momentum, and contrarian.

Kitten Finance: 4 Token Ecosystem

$KIF – this is the governance and staking token for Kittenswap. It is used for dividends, buybacks, and will allow users to access kittenswap IKO’s. The max supply is 42,000. The token was distributed via liquidity mining, with no presale or premine.

$DEX – this token is for governance, dividends, and buybacks on AlphaDex. The max supply is 420,000.

$kBASE – this is an elastic supply stablecoin. It will be used for staking. It can be minted by locking assets as collateral.

$LIQUID – LIQUID is a token with a decreasing supply. Its main utility will be lending. Users will be able to deposit $LIQUID to borrow ETH, from inside of the LIQUID contract. Taxes on the LIQUID token are used to create liquidity for lending.

When token transfer/sells are taxed, they are burned to reward holders. The floor price of LIQUID will increase as it is burned, because its price is shifted on the bonding curve!

The image below describes LIQUID v2 improvements, which are coming in 2-3 weeks.

Fair Token Distribution via Farming

There are 12 farming pools to distribute KIF, DEX, and kBASE. The APY % shows the weekly earnings. The rewards half each week.

My Conclusion on Kitten Finance

Kitten Finance makes key innovations, which could turn this low-cap gem, into a blue-chip star. It’s very early, but the launch of $LIQUID proves its one-sided AMM works. Kittenswap can do token launches without ETH liquidity!

This means crypto projects no longer need to conduct pre-sales, to raise ETH for liquidity. They can launch on Kittenswap with an Advanced market-making order to save valuable tokens, in their earliest stages.

Kittenswap also has low gas fees. My $LIQUID purchase cost me about 1/3 of a Uniswap trade, a 75% discount. In our current gas crisis, anyone who provides a solution, will be a big winner.

I’m dying to try Kittenswap’s advanced order types. Limit orders, wide limit orders, and stop-orders, will help us scoop up low-caps at rock-bottom. The ability to take out loans, against stop orders will also keep this money from being tied up. The binary options and strategies that Alphadex provides, will give us even more ways to exploit this market.

The tokenomics of KIF, DEX, kBASE, and LIQUID are well thought-out. $LIQUID will provide liquidity for lending. $LIQUID holders will be rewarded, as the price floor elevates from the sell/transfer taxation. $KIF and $DEX will provide dividends, and access to launches on the AMM. $kBASE will be the stable asset of the system.

Kitten finance is tackling tough problems faced in defi. Most projects are just copycats, but the kitten devs are truly intelligent innovators. This is a project i’m going to hold for a longer term. I do hope they change that name tho 😉

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Dollar Protocol Review: Algorithmic Stablecoins, Scalability, and Negative Rebase Protection

We need better decentralized stablecoins. USDC can be frozen. Dai could suffer from a price collapse of ETH. Tether is fractionally backed. Perfecting a synthetic stablecoin, is the key to making defi bullet-proof.

What is Dollar Protocol?

Dollar Protocol is an algorithmic stablecoin protocol. It’s based on a 2014 whitepaper, written by Robert Sams. It is very scalable, and will soon include many types of synthetic assets.

  • The protocol separates value stability (USDx), and speculation (SHARE, xBOND) into three different coins.

Important Links:

What are Algorithmic Stablecoins?

Algorithmic stablecoins have a supply that can expand or contract. The supply changes, when the token price is off its peg. Incentives are given to create buying or selling pressure, to move the price up or down. This creates a resilient non-collateralized, stable asset.

Algo-stables like $ESD, $DSD, $DEBASE are getting alot of attention. I think the stabilization mechanics in these protocols will be widely adopted. Once they are perfected, they will become an important defi lego piece.

Dollar protocol’s first stablecoin is USDx. It will soon add assets, like the EUROx, YUANx, etc.

Dollar Protocol’s Three Token Economy

Dollar protocol consists of three tokens: USDx, SHARE, and xBOND.

  • $SHARE is a governance and rewards token. It earns 20% of the rebasing rewards on all stablecoins. $SHARE can be locked in the liquidity pool, to bump up rewards to 33%. It carries no risk of negative rebase. The supply is capped at 21 million.
  • xBOND receives 40% of rebase rewards. xUSD must be burned by the protocol to mint it. xBOND’s price goes up on a bonding curve when there is a positive rebase. Each time a negative rebase occurs, the bonding curve is reset 1:1 with xUSD. Users can move into xBOND if they feel there will be a series of positive rebases, after the negative rebase. xBOND allows holders to profit on the longterm growth of the protocol.
  • USDx is a rebasing stablecoin, with a price target of 1 USD. Its supply fluctuates to maintain its price stability. It is one of many stable-assets that will be added to the protocol.

A deeper dive into xBOND. How it prevents negative rebasing.

If USDx is bonded, its supply doesn’t decrease during a negative rebase. Users can bond (burn) their USDx, to mint xBOND. Bonding it removes the USDx supply from circulation, and helps move the xBOND price upward.

xBOND is designed to reward users that believe in the long term growth of the protocol. If a user thinks a negative rebase will be followed by multiple positive rebases, they can move into xBOND to profit. The token will continue to gain value, if more positive rebases occur. xBOND’s price curve is reset 1:1 with USDx, whenever there is a negative rebase.

  • The catch is that xBOND cannot be redeemed all at once. There is a limit to what you can redeem per positive rebase.

What happens when a positive rebase occurs?

Positive rebases inflate the USDx supply. The supply increase creates user rewards and selling pressure.

How is the Bonding Curve reset after a negative rebase?

When a negative rebase occurs, USDx is removed from circulation. Also, the price of xBOND is reset 1:1 with xUSD. This is an opportunity for users to flee into xBOND to protect their USDx, while making profits from gains on the bonding curve.

How are rewards distributed?

The protocol’s rebase rewards are split among 3 groups: Share token holders, Bond token holders, and Liquidity Providers in the following percentages.

The Seignorage and Share Mining Liquidity Pools

The protocol has two types of liquidity pools: The Seigniorage mining pool and the SHARE mining pool.

  • Seigniorage mining allows you to earn stablecoin rebasing rewards on all stablecoins by providing liquidity. Rebase’s occur every 12 hours (at 12:30 EST am and pm).
  • Share mining allows you to earn SHARE rewards by contributing to the liquidity pools.

In the future, their might be an xBOND mining pool.

Audits

Dollar Protocol is now being audited by market leaders Certik and Slowmist.

DAO Governance

Dollar Protocol’s DAO governance seems to be effective. It has passed multiple measures that benefit the project. The community recently voted to increase the rewards percentage on the $SHARE token. It also reduced the amount of votes needed to pass a resolution from 50% – 25%.

My Conclusion on the Dollar Protocol

Dollar protocol’s scalability, is its biggest strength. It could grow into a huge network of non-collateralized stablecoins. Each new coin will feed rebasing rewards to its token holders.

$SHARE holders will be the big winners, if this project scales. Rebasing rewards will scale, as the project grows.

Community participation is very strong. Governance is filled with devotees. Participants have fixed major flaws, like the reward split and voting threshold.

I think one of the main reasons Dollar Protocol isn’t more successful yet, is its complexity. It can be difficult to understand xBOND’s role, as well as seignorage coins in general. I hope that writing this article will trigger people to look at it more deeply. I hope they can see the potential that i see too.

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Dynamic Set Dollar Review: A More Reactive Algorithmic Stablecoin, with Dynamic Supply and Incentives.

Dynamic Set Dollar is an algorithmic stablecoin, with a fluctuating supply. It is NOT a rebase coin. Its balance does not change within a users wallet. DSD reaches stability by giving its users financial incentives, that encourage them to sell or burn tokens. This helps the $DSD price move towards its goal of $1. Devs call this mechanism, Voluntary Elastic Supply.

How the DSD supply changes:

  • If the price of DSD is above a dollar: new DSD tokens are minted. These new coins go to reward the stakers of the DAO, and providers to the liquidity pools. These new coins create sell pressure, moving the price downwards.
  • If the price of DSD is under $1: users are encouraged to burn their tokens in exchange for coupons. These coupons can be exchanged for a higher percentage of coins, once the price crosses back above $1.

The devs felt incentives were a better method of price control, compared to rebasing. Reducing a user’s balance, can give users a bad feeling. Rebasing also breaks the composability of defi, and the ERC-20 standard.

What is the difference between Empty Set Dollar (ESD) and Dynamic Set Dollar?

Dynamic Set Dollar is a fork of Empty Set Dollar (ESD). DSD fixes the issue of bot manipulation of the coupon and redemption system. It also shortens the epoch to 2 hours, making it more reactive to price fluctuations. The DSD changes include: epoch duration, rebase amount, supply/reward mechanisms, and coupon expiry.

Reaching Equilibrium: The 2 Phases of Dynamic Set Dollar

Dynamic Set Dollar goes through 2 different phases in order to reach its one dollar peg: Expansion and Contraction

The Expansion Phase

When the price of DSD is over a dollar, it enters an expansion phase. During this phase, the supply expands by a maximum of 10% each epoch (An epoch is 2 hours). The increased supply adds selling pressure to DSD, which coaxes the price downwards. The maximum amount the supply can expand is 35%.

The expanding supply goes to reward liquidity providers, and DAO stakers. 60% of rewards go to pay DAO stakers, 40% goes to liquidity providers. DAO bonders earn compounding rewards, liquidity providers rewards are non-compounding.

The Contraction Phase

When the price of DSD is under $1, it enters a contraction phase. During this phase, users are incentivized to burn their tokens. Reducing the DSD supply will move the price upward.

During the contraction phase, users can burn DSD tokens in exchange for coupons. These coupons guarantee premiums (currently 45%) on tokens. The coupons can be redeemed when the price crosses back over $1. The coupons expire after 360 epochs, which is around 30 days.

  • Once the price goes under $1, the Liquidity Provider rewards and DAO rewards stop.

How are Coupons Redeemed for a Premium?

The coupon system encourages users to burn DSD tokens, in exchange for coupons. This reduces the supply, leading to a price increase. The coupons can be redeemed for a premium when $DSD breaks $1. Currently coupons are worth 1.45 times the amount of tokens burned.

How DSD’s coupon system is different from ESD’s

The DSD fork altered the ESD coupon system. These changes help to reduce bot manipulation of coupon redemptions. It gives user incentives to buy coupons early, by creating a redemption penalty on coupons which are bought late. Users can still redeem coupons early, if they are willing to accept this penalty.

The chart below demonstrates the penalty:

DSD Statistics

Live statistics for the protocol can be found here.

Rewards: Liquidity Provider and DAO

Users can earn DSD rewards by staking. They can bond tokens to the DAO, or stake their liquidity pool tokens to earn rewards. Compounding interest is earned when bonding to the DAO, at a rate of 60%. Non-compounding rewards are earned by staking LP tokens. In both instances, the tokens are locked for 36 epochs.

My Conclusion on Dynamic Set Dollar

The Dynamic Set Dollar protocol offers two core features. First, it creates a price reactive algorithmic stablecoin that will hopefully maintain a stable value, in a very volatile market. Secondly, it provides financial opportunities for speculators, as $DSD fluctuates between its expansion and contraction phases.

I think DSD’s incentive system is more fair, than a rebasing system. An incentive system allows users to hold DSD, without taking on the risk of a negative rebase. Users can speculate with the coupon system to earn incentives, or choose not to. There is risk and reward in the incentive system, but it is totally voluntary.

The staking and coupon system offers ample opportunity for gains. But, users should have a strong grasp on DSD’s fundamentals before utilizing it. Holders can only earn rewards, when its price is above $1. This means its price will always be retreating towards its peg, as rewards are earned. They need to sure that their staking rewards will be greater than the loss of the coins value, as DSDs price descends. They also need to be wary of the unbonding period. They will not immediately dump their coins!

DSD offers important improvements to the Empty Set Dollar’s protocol. Its addition of a coupon redemption penalty, fixes the issue of front-running by bots. Its epoch time changes, make it more reactive to price fluctuations. The DSD and ESD protocols offer a new type of stablecoin. If the price of these coins eventually settle firmly at their $1 peg, it will make a nice addition to the current selection of non-collateralized stablecoins. But, it will take time to see if it can hit its target, and maintain a stable value.

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Linear Finance Review: Synthetic Assets, High Rewards, Cross-Chain

Linear Finance is a cross-chain synthetic assets exchange, with DAO governance. It will allow users to trade delta-one synthetic assets like gold, oil, and index funds. Linear’s devs hope to improve on design flaws that they perceived in the Synthetix project. They saw problems in areas like: the oracle price update speed, pledge ratio, tokenomics, transaction costs, rewards, speed, and multi-chain accessibility.

I think the standout feature for Linear will be interoperability. The team will start out by building on ETH and EVM compatible chains, like Binance Smart Chain (BSC). Then, it’ll expand to non-ETH compatible chains. These alternate chains can offer higher speeds, lower transaction costs, and greater accessibility.

Linear Finance is backed by noteable investors like: Alameda Research, Kinetic, and Hashed. (See the image below)

Important Links:

How Does Linear.Finance Work?

Linear Finance allows the minting and trading of synthetic assets. Each synthetic asset is over-collateralized, by lUSD stablecoins. This over-collateralization ensures the system will not break, even in times of heavy volatility or a black swan event.

To encourage users to maintain the proper collateral for their synthetics, the project offers rewards. Exchange and inflation rewards can be earned, by maintaining a certain ratio of lUSD collateral to synths. This ratio is known as the p-ratio or pledge ratio. This helps to maintain the overall health of the system.

Within this system, Linear’s liquidity pool acts as the counter-party. This allows for almost unlimited liquidity, with zero slippage. Users can also earn $LINA rewards for contributing to the pool.

The project is now in its testing phase. Currently, users can only mint lUSD and stake. Soon, they will be able to buy synthetic assets, and trade them.

What is a Pledge Ratio?

The Pledge ratio (p-ratio) is the ratio between a user’s lUSD collateral, and their synthetic asset holdings. Over-pledging ensures that even in high volatility, the system will work. In order to receive $LINA exchange rewards, a user must have a p-ratio that hits a certain threshold. The starting p-ratio will be 600%, but this can be changed by the DAO.

How to Mint lUSD Stablecoins on the Buildr App

Users can mint lUSD stablecoins from $LINA tokens. This is done on the Buildr app. Soon, other collateral types will be accepted to mint lUSD. This will be in a ratio decided by users of the DAO (possibly a 80:20 ratio).

The Synthetic Assets Exchange

The exchange will allow the trading of liquids, aka synthetic assets. This includes: precious metals, stocks, cryptos, and commodities like gold. Any asset with a price feed can be added. The fee on every trade, is 0.25%. Fees are rewarded to users, if they have a pledge ratio above the set threshold. Rewarding users to maintain a certain p-ratio, helps ensure that the overall system wont fail due to insufficient collateral backing.

Using BAND Protocol to solve oracle front running

The project chose BAND as its oracle provider. It was chosen because of its near instant finality, and 2-3 sec block times. Devs believe that this will help to solve the oracle front-running problem, which is a type of arbitrage on the price feed delays.

Which Assets can be Traded?

Tradeable asset types will include: cryptocurrencies, commodities, and indicies. Users will vote in the DAO on the types of assets that will be included.

Staking and Rewards on the Platform

Users can earn three types of $LINA rewards on the platform: Transaction Fees, Inflationary Rewards, and Yield Farming Rewards.

  • The transaction fee of 0.25% is distributed to LINA stakers that have a pledge ratio above the threshold.
  • The inflation rate of the LINA token is set to 75%. It will reduce each week at a rate of 1.5%. Stakers can get these inflation rewards if their pledge ratio is above the threshold determined by the governance.
  • Users can yield farm by providing liquidity to the debt pools. Rewards are currently about 1% interest per day. This liquidity will help bootstrap the project.
  • Users can also earn $LINA rewards by creating and burning liquids.

DAO governance

Linear Finance uses DAO governance. $LINA holders can vote on variables like: pledge ratio, asset types, and the insurance fund. Any token holder can create proposals and vote.

$LINA Tokenomics

LINA has a max supply of 10 billion. Its circulating supply is 475 million. It has 75% inflation built-in to enhance user rewards. This will decrease by 1.5% weekly. This can be changed by the DAO.

The $LINA token is used for: staking, minting of synthetic assets, governance, and payments.

The Team

Linear’s team is well rounded. They have experience in crypto, exotic assets, and structured financial assets. Check out their Linkedin here.

My Conclusion on Linear Finance

I think Linear Finance is a solid, under-valued project. It has a strong team and noteable investors like Alameda Research. It will provide an avenue to trade synthetic assets on chains other than ETH, which is needed in crypto. It also seeks to improve on perceived flaws in the Synthetix design. The project’s tokenomics, low marketcap, high rewards, and current interest rate of about 1% daily, make it very enticing.

On the other hand, Synthetix is stiff competition. Its is very innovative. It will soon upgrade to V2, with layer 2 implementation. This will improve its speed, costs, and feature set. This might make some of Linear’s improvements, less dramatic. BUT, i feel that just bringing synths to BSC and other chains, is enough of a selling point. Its exchange will be utilized just due to this. It’s rewards, tokenomics, and growth potential are a bonus.

After launch, i hope that Linear Finance will differentiate itself. Offering a cross-chain product with design improvements, is great, but I would also like to see uniqueness after it is up and running. I want exotic assets, a multitude of inverse assets, traditional assets, and things i cant find elsewhere. Maybe diversity of assets is where Linear can begin to set itself apart. It would also be nice to see leveraged trading on the exchange.

The rewards and tokenomics are great. If Linear can fix certain pain-points, and offer interoperability, i think users will become active on the exchange. The project wouldn’t have high profile backers, if they didn’t think this was possible as well.

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Mstable Review: Tokenized Baskets, Yield, Capital Loss Protection

What is mStable?

mStable is a platform for users to mint a customizable stable-asset called mUSD. It can also perform no-slippage stablecoin swaps, and generate yield.

What is mUSD?

mUSD is a stable asset which offers high value stability, native yield, and protection from permanent capital loss. It is minted from a tokenized basket of base stable-coin assets. These base-assets can include: USDC, USDT, sUSD, TUSD, or DAI. Benefits of mUSD are: 1) a high native interest rate, 2) recollateralization mechanisms, 3) reduced centralization, 4) and community governance.

What is Meta ($MTA)?

Meta (MTA) is the second token in the mStable economy. It is used for user rewards, governance, and to help re-collateralize assets in-case of currency collapse of a stablecoin.

Important Links:

The 5 products: MINT, SAVE, EARn, SWAP, and REDEEM

How to MINT mUSD from Base Assets

The MINT feature allows users to create mUSD from base assets in a 1:1 ratio. Base assets can include: USDC, USDT, sUSD, TUSD, and DAI. Users earn MTA rewards for minting mUSD.

The image (below) shows how users can choose which stablecoins they want to mint, and the percentage they want allocated.

SAVE: How to generate Interest with mUSD

The SAVE feature lets users deposit mUSD, to earn a variable interest rate.



Interest is generated in 2 ways:

  1. mStable lends funds to protocols like Aave and Compound.
  2. mStable takes 0.06% fees on swaps.

Swap fees generate significant APY when swap amounts are high. (Notice image below, where the APY rocketed to 107% on a day, due to high swap activity.)

EARN: Provide Liquidity to earn rewards

EARN is mStable’s liquidity mining program.

Users can stake pool tokens from Uniswap, Curve, or Balancer, to earn MTA (Meta) rewards.

SWAP your stablecoins

The SWAP feature lets users trade base stable assets. Assets can be traded with zero slippage, regardless of size! This creates arbitrage opportunities.

The video below shows you how to find arbitrage opportunities in defi.

REDEEM: untokenize a basket of coins

The REDEEM function swaps mUSD for individual base-assets. These assets can be redeemed in any ratio, as long as they don’t go over the “max weight”. This would expose the network to more risk. The fee for redeeming mStable assets, goes to the stakers of mUSD.

mStable’s Constant Sum AMM (automatic market maker)

$MTA TOKEN Utility

The MTA token serves three purposes.

  1. its a safeguard against collapse of base-assets
  2. it is used for governance on the platform
  3. it rewards users for providing liquidity, creating mAssets, and engaging in governance.
  • How MTA protects against currency collapse

MTA is a safeguard, in case a stablecoin loses its peg. It can be minted and sold, to make up for losses in a currency collapse. MTA holders could be diluted if a currency collapses.

  • MTA is a governance token

MTA incentivizes governance. MTA holders must stake, to vote and earn interest. Governance is currently centralized, in the hands of the core team. It will soon be transitioned to the community under a DAO.

Users vote on: adding and removing assets, adding/removing collateral assets, the max weight of collateral assets, redemption fees, oracles, and upgradability.

  • MTA incentivizes liquidity

Liquidity is incentivized with MTA tokens. Users can stake LP tokens from Curve, Uniswap, or Balancer to earn rewards. This does come at the risk of impermanent loss.

$MTA Tokenomics

MTA’s max supply is 100 million. It is used for rewards, governance, and to re-collateralize assets in-case of currency collapse.

Below is the token allocation of MTA:

My Conclusion on mUSD and mStable

I think mUSD is a superior stablecoin. It offers 5 significant advantages over individual stable assets.

The advantages of mUSD include:

  1. Reduced vulnerability of currency collapse.
  2. Less centralization.
  3. A mechanism to re-collateralize in case a currency fails.
  4. Above average yield.
  5. Governance.

mUSD is extemely safe, and beneficial for holders. But, mUSD stakers do take on some risk. Stakers can be liquidated, if a base currency, like USDT collapses. mUSD stakers are rewarded with yield, for assuming this risk.

The platform also offers arbitrage opportunities. It provides zero-slippage stablecoin swaps. Periods of high swap volume can boost interest rewards to mUSD stakers. Arbitrage has caused liquidity issues for certain assets. But…devs say this is being addressed in a future update.

I’ve also read that a tokenized BTC basket might be coming in the future. This is a product i’m interested in. It would be very nice if a tokenized BTC basket could earn the native interest rate as well! That will make for a superior form of tokenized BTC.

Better stability, re-collateralization, and high interest rates make the platform’s tokenized baskets, preferable to holding the individual assets. I hope mStable’s roster grows to offer more types of tokenized products. I would love to see a tokenized defi index that earns interest 😉

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Barn Bridge Review: Fluctuation Derivatives, Yield Farming, Risk Management

BarnBridge tokenizes market fluctuations and risk exposure. It’s a new type of defi lego to create tradable tokens, that expose a user to more or less volatility in a market. It can reduce volatility for conservative investors, or increase it for traders. Its tokens open up new opportunities for risk management, speculation, and hedging. 

There is over 200 trillion in global debt. Bonds on corporate debt are now earning below 2% interest for the first time ever! This corporate debt might be coaxed into defi, if the yield and price fluctuations were less volatile. Barnbridge can reduce this volatility. It can even offer a stable yield rate, by consolidating the return from multiple protocols.

Important Barnbridge Links:

What are Tokenized Fluctuation Derivatives?

Barnbridge creates tokenized derivatives on market fluctuations. Examples of these markets could include: yield rates, price, prediction market odds, mortgage default rates, etc. These ERC-20 derivative tokens are separated into high, medium, and low risk/reward baskets, called tranches.

Barnbridge’s first derivative TOKENs

Barnbridge’s first two derivative tokens: Smart Yield Bonds and Smart Alpha Bonds.

Smart Yield Bonds

Smart yield bonds consolidate and tokenize yield from multiple defi protocols. The ERC-20 tokens can offer high risk/high yield, lower risk/lower yield, or stabilized yields.

The yield bonds are structured according to the image below:

Smart Alpha Bonds 

Smart Alpha Bonds tokenize price exposure. They can expose users to a high, medium, or low amount of price fluctuation. Higher risk price exposure gives higher returns, but also higher losses. 

  • Each token doesn’t have to be flat on the price exposure curve! For example, the first 10% of price exposure can have a different exposure curve than the second 10%. The second 10% can move the price up more/less up or down, than the first 10%.

Barnbridge also plans to develop more derivative products including: SMART Prediction Hedge, SMART Swaps, and a Market Driven Ratings Oracle

$BOND Tokenomics

$BOND is the native ERC-20 token of the protocol. Its total supply is 10,000,000. It is used for staking, governance, and incentives. $BOND’s fair release model was inspired by yEarn. It is distributed to the community by yield farming.

The 2.2 million $BOND tokens allocated to founders, seed investors, and advisors are vested, then released on a weekly basis over a two year period.

$BOND Yield Farming

The team will distribute the $BOND token fairly. It uses a Proof of Capital model to release the token as yield for liquidity providers. Barnbridge needed this liquidity to “structure”, then release its product. 

Below are the 2 liquidity pools available for farming:

  • USDC/DAI/sUSD Pool (#1) – Pool 1 is composed of stablecoins, so impermanent loss is not possible. 
  • USDC/BOND Uniswap Pool (#2) – Pool 2 may be less vulnerable to smart contract failure, as Uniswap smart contracts have been deployed and tested longer.

DAO Governance

Barnbridge started under a “launch DAO”, using the Aragon platform. (Access it here.) Soon it will soon be transitioned to the final Barnbridge DAO.

The Barnbridge Team

The founders of Barnbridge have a history with crypto startups including: SingularDTV, Dharma Capital, and Gnosis. Its devs are part of the web 3 development company in Bucharest called Digital Mob

Conclusion on Barnbridge

I think the risk management tools offered by Barnbridge, will encourage new types of debt to enter our space. Defi can give exceptional APY’s on mortgage and corporate debt, but institutional investors might afraid of a risky, unproven protocol. Barnbridge can spreadout and stabilize this risk. Tools to mitigate the exposure, and steady interest rates, will allow conservative investors to slowly dip their toes in.

Barnbridge is a very unique product. There’s no comparable protocol in defi. Its derivative tokens offer new ways to speculate, manage risk, and hedge. The ERC-20 tokens will be used by both conservative and aggressive investors to give stability, or maximize gains.

I also think the team made a smart decision by going with DAO governance from the very start. The market highly values fairly run projects, like yEarn! Barnbridge has enthusiastic community support, with $400 million locked in now. I’m very curious to see which market types Barnbridge will tokenize next.

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Rio Chain and Mantra Dao Review: the Emerging Defi Ecosystem on Polkadot

Rio Chain is a well-funded substrate based blockchain. It will power a suite of cross-chain financial applications, in the Polkadot ecosystem. Rio plans to connect traditional banks with blockchain. Working directly with banks allows it to create secure custody services, interest bearing saving accounts, debit cards, and a fiat gateway into crypto. Rio is positioning itself to be a multi-chain Crypto.com!

The Rio team is based in Hong Kong. Its target market is China, USA and globally. Rio Chain is well funded, and was audited by Certik. Co-founder Calvin Ng, is also managing director at Plutus.vc, which is a $200 million dollar venture capital fund. Rio is supported by 12 venture capital companies, and has raised $15 million in private rounds.

Rio Chain’s Roadmap

Rio has 8 releases coming in Q4 2020, and into Q1 2021. They include: a wallet, dapp store, exchange, payment system, debit card, and fiat gateway. The Rio team also plans to create a stablecoin, and launch new defi applications on the chain.

  • Rio’s flagship dapp, Mantra Dao was launched in Q3.

Basics of the Rio Blockchain

Rio is an interoperable blockchain, built on Substrate. Its native token is called $RFUEL. RFUEL is used for transaction fees and rewards. Rio currently uses Proof-of-Authority (PoA) consensus, but will soon switch to Proof-of-Stake (POS). Rio is now a federated chain, but this will change in the future. A federated chain offers improved speed, TPS, privacy, and costs, but, it is more centralized. The Rio chain has reached up to 3000 TPS, with 2 second block times. The team plans to make Rio more decentralized, as the tech improves.

Here is a recent update about Rio’s progress:

Important Links:

Rio’s Cross-Chain Interoperability

Rio will use Polkadot for its interoperability. Until Polkadot is ready, Rio will use a “federation based cross-chain mechanism” to move assets to other chains. It will use a cold storage, multi-sig wallet for custody. Its Generic Asset Bridge, will power cross-chain transfers.

Tokenomics of $RFUEL

$RFUEL is Rio Chain’s native token used as gas for transactions. Rfuel requires a flat 0.1% transaction fee, instead of a variable fee. It is needed to conduct a transaction, or to execute a smart contract.

  • The Total supply of $RFUEL is 1 billion. 70% is allocated for rewards. 35% of the rewards will be distributed to those staking RFUEL and validating transactions on the network. (Here is the token emission schedule.) RFUEL has a circulating supply of 116 mil, putting it at a $10 million cap.
  • 80% of all transaction fees on the network, go to node operators. 20% of fees reward the dApp creators. They hope this economic incentive for dapp builders will encourage developers to build on Rio Chain.
  • Users are now able to stake RFUEL on Mantra Dao’s staking app to earn 50% APY rewards.

The RIO Wallet

The Rio Wallet will be released in Q4. It will be pre-loaded with $RFUEL, to use for transactions! It can hold ALL assets on RioChain, and on some other chains. At launch, Rio Wallet will hold Bitcoin (BTC), Tether (USDT), Rio Fuel (RFUEL), and BIT Token (BIT).

Mantra Dao: Rio Chain’s Flagship Dapp

Mantra DAO was incubated by Rio Chain. It offers borrowing, lending, staking, a savings pool, reputation mechanism called karma, and governance. Mantra sees itself as a community governed credit union.

  • Mantra has created partnerships with: Kira, Bonded Finance, TomoChain, and Kardia Chain.
  • Releases like: the Mantra Pool, their Proprietary Lending Protocol, and a Stablecoin are coming in Q4 2020, and Q1 2021.
  • Here are the latest blog updates on Mantra Dao.

Below is its roadmap:

My Conclusion on Rio Chain and Mantra Dao

I think Multi-chain defi will be a strong crypto narrative in 2021. A cross-chain environment, will invite in alot of value. Rio is also a strong candidate for one of 100 Polkadot parachain slots. It’s strong banking/institutional ties can be leveraged to provide financial services and custody, which can’t easily be replicated.

The $RFUEL token’s price has performed poorly so far. I believe this will reverse, as it hits major milestones in the next few months. It will release its mainnet, wallet, debit card, and fiat gateway in the next 3-6 months. Users can now stake $RFUEL on the Mantra Dao app to earn 50% interest. If $RFUEL can hit a $50 mil cap, like Mantra Dao, it would 5X from here. ($10 million circulating mcap)

Mantra Dao, RioChain’s first defi offering, ($OM) had a very successful launch, but has cooled off since. It just opened staking, and is now offering 88% APY rewards. This is attractive to those who know what is upcoming in the next few months. With important partnerships like: Kira, Bonded Finance, TomoChain, and Kardia Chain, it is positioning itself to be a major player in defi. Once it launches the Mantra Pool, Lending protocol, and stablecoin, investors will jump back on board. If $OM hits its previous high mcap of 50 mil., it will 3x from here.

Rio and Mantra Dao are huge, well funded projects, with powerful institutional connections. That is not forkable! The fact that it is multi-chain, means the value which could flow into it, could grow beyond chain specific protocols like Crypto.com. As multi-chain defi becomes a reality, Rio will be perfectly positioned at its forefront.

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Pickle.Finance Review: Memes, Triple Dip Earnings, and Stablecoin Pegs

The food coin niche is a stale, oversaturated, and mostly rotten trend. BUT, I found nourishment in Pickle.Finance.

The PICKLE project offers “triple dip” interest, but at a higher risk. Its code has yet to be audited. It has some innovative ideas, an engaged community, cool memes, and a great locked value to market-cap ratio.

What is Pickle Finance?

Pickle.finance is a yield farming protocol that benefits defi. It helps stablecoins maintain their $1 pegs.

It does this by giving higher APY incentivization to stablecoin pools which are below their peg. This encourages users to migrate to the highest APY pools. It has a 1-click swap feature, allowing funds to easily shift between pools, saving on gas fees.

Important Links:

With Pickle, users can triple dip in rewards, by first staking Uniswap LP tokens in pJars and Farms. Here’s how:

  1. Users stake Uniswap pTokens to earn 26% APY (varies) in pJars (pJars are similar to yearn vaults). The pJar also compounds UNI rewards by automatically selling and re-investing it. You don’t have to pay gas fees to harvest/sell your UNI tokens.

2. Next, they can stake pUNI pool tokens (from pJars) to earn an additional 10.3%. This allows them to earn interest, plus $PICKLE tokens. A new governance proposal (PIP-8) will allow users to stake $PICKLE to earn additional revenue as well!

Users can earn Triple dip rewards, while still earning LP rewards on Uniswap!

So, How is Interest Generated on Pickle.Finance?

Interest is earned in jars (like “vaults”) via strategies like arbitrage and flash loans. It works similarly to Yearn Finance.

Additionally, the pickle jar automatically sells and re-invests the farmed UNI tokens. The earnings are put into the pickle jar. This causes the pool to grow, and pTokens to gain value. There is a .5% fee to exit pools, which goes to buy/burn PICKLE tokens.

The PICKLE token

PICKLE had a fair token launch. The token is distributed through liquidity mining. Its supply is currently at 756,291. It has inflation, but the emission was just reduced. No money went to VCs, pre-mine, or an ICO. The devs take a percentage as a development fund. They also take 2% of all coins minted. Users can mine PICKLE by contributing liquidity, or purchasing it on Uniswap.

After a recent governance vote the supply is being distributed at only 1 PICKLE per block! They are even going to cap the inflation rate.

The proposal PIP-5 just passed. It will further reduce emissions to 1.5 million after 2 years. The token will be bought and burned, which could even make it deflationary. The funds to buy and burn PICKLE are generated from the withdrawal fees from pickle jars.

Proposal PIP-8 just passed. It incentivizes users to hold the PICKLE token. Users can stake it to earn a share of the jar profits. The “majority of withdrawal fees from the PickleJars would be diverted to the Treasury“.

Pickle’s Governance

The $PICKLE token allows users to participate in governance. Governance participants receive a 3% share in governance fee and 0.5% of withdrawal fees. View governance proposals here.

PICKLE has an active, engaged community. PICKLE uses quadratic voting, which was endorsed by Vitalik.

Are there Risks using Pickle.Finance?

The main risks of using Pickle.finance are smart contract failure, or hacking. The protocol hasn’t been audited for security flaws, but was constructed in a drag and drop way, from pre-written smart contracts. I personally do invest in higher risk projects, but i only use a small amount of funds that i have allocated for that.

Conclusion on Pickle. Finance

PICKLE brings innovation to yield farming. It helps maintain stablecoin pegs. It has an engaged community, which steers the project in the direction of higher value for $PICKLE token holders. If the community keeps the tokenomics in check, demand for $PICKLE will grow.

Unlike most food tokens, there is a utility for the $PICKLE governance token. It will soon generate rewards from a portion of pJar profits. Emissions will be reduced, to the point it might become deflationary. The $PICKLE token’s value should grow over time. Pickle delivers ripe APY returns, while most food tokens are just empty calories. Its low market-cap to value locked ratio makes it very attractive to investors.

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5 Upcoming Polkadot Projects with Unreleased Tokens

Below, I’ll discuss 5 upcoming Polkadot projects. All of these projects have tokens, which haven’t yet been released as of Sept 23.

The tokens are: POLS, PSWAP, ACA, GLMR, and BOND.

*Note – I’m not saying to buy these tokens, or giving financial advice. This is just a place to start your research.

PolkaStarter

PolkaStarter (POLS)- Polkastarter is an upcoming cross-chain DEX and auction project. It has a governance model, dutch and sealed bid auctions, closed password protected pools, as well as fixed and dynamic swaps. It is a place to launch new tokens, in an optionally KYC compliant environment.

The POLS token will be listed on Uniswap at the end of September! (check the telegram here) The plans are to launch the product on ETH 2020 Q4, then on Polkadot in Q1 of 2021. They also have a new partnership with Mantra DAO.

POLS Tokenomics – The total supply of POLS is 100,000,000, with an initial Uniswap listing price of $0.05 cents. (This price would put it a fully diluted cap of $5 mil.) POLS is a utility token which is used for governance and transaction fees. Pool creators will need to hold POLS.

Below is the token allocation and release schedule:

  • Here is the Litepaper
  • Here is the Twitter
  • Here is the Telegram

The Teamthe team is small, but public with a history of successful crypto and internet projects.

PolkaSwap

PolkaSwap is an interoperable AMM DEX, like Uniswap. It has the ability to list and exchange tokens on other chains like DOT, ETH, and BTC. Its native token is PSWAP. PSWAP will not be sold in an ICO or private sale.

Tokenomics of PSWAP – The PSWAP token can be earned by providing liquidity. It is a deflationary token. Trading fees of 0.3% on Polkaswap are used to buy and burn PSWAP. PSWAP is used to reward liquidity providers. Rewards start at 100% of burned trading fees, but reduce down to 35% of burned fees after 5 years.

The XOR token (SORA network) is also used in the ecosystem. It is used for gas and liquidity provision. PolkaSwap is an app in the SORA network.

The image below shows how PSWAP with fit into the SORA network:

Acala Network

Acala Network is a cross-chain stablecoin and defi platform. It allows users to lend, borrow, trade, and govern. It is similar to MakerDAO, offering multi-collateral CDP’s. Collateral can be from Polkadot, or other chains connected to Polkadot. ACA is the native token of Acala. The ACA token is not yet available for sale, check the telegram group for details.

Here’s a blog post about what Acala’s accomplished in September.

  • Here is the whitepaper
  • Here is the telegram
  • Here is the twitter

ACA tokenomics – The ACA token serves three purposes in the ecosystem. It is a utility token paying for transaction fees, stability fees, and penalty fees. It is also for governance, and for a contingency solution in case there was a collapse of a collateral asset.

Acala uses the Homa protocol, which lets users trade staked assets as l- assets, or “locked” assets.

Moonbeam Network

Moonbeam is an Ethereum compatible smart contract parachain on Polkadot. It is being developed by Purestake. It offers support for many types of Solidity based smart contracts. It allows developers to use tools like Truffle or Metamask. Glimmer (GLMR) is its native token.

The goal is to launch Q2 2021 on Polkadot, and on Kusama Q4 of 2020.

Important Links:

GLMR tokenomics – GLMR is a utility token which is used to pay for smart contract execution, smart contract storage, transaction fees, on-chain governance, and cross-chain messaging. The plans for the token sale haven’t been announced yet, no info yet about supply.

Bondly Finance

Bondly.Finance is an ecosystem of defi products. It’ll start out with three projects: Bondswap, Bond Dex, and Bond Protect. The apps will allow peer to peer trading via chat apps, (as seen with wechat), a DEX, and escrow services.

The native token is $BOND. Note that there are multiple projects with the $BOND ticker!

Important Links:

Below are the three dapps in the ecosystem:

BONDSWAP (BSWAP)

Bondswap is similar to Binance OTC trading portal. Trading is done directly on-chain, via chat apps.

BSWAP allows you to:

  • sell low liquidity tokens with no slippage
  • sell NFTs, domains, artwork
  • buy crypto with a credit card
  • send a link to a buyer through a chat app

BOND DEX

Bond Dex is a cross-chain dex built around liquidity pools. Liquidity Providers can earn rewards for providing funds (similarly to uniswap). It also has a price matching engine. The BOND token serves as a reward.

BOND PROTECT (BPROTECT)

Bprotect is an escrow service. It allows peer-to-peer transactions with escrow. It protects buyers and sellers from fraud. It also allows for subscriptions, or recurrent payments.

BOND Tokenomics – The BOND token is a utility token which can be used for collateral in the marketplace, liquidity rewards, and more.

The team is experienced with other crypto projects under their belt.

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