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Mars Protocol: Companed Defi
Mars Protocol is a protocol of lending and borrowing, which works autonomously using smart contracts. Mars was launched in the Terra ecosystem in March 2022. And since then he announced his restart in the Cosmos ecosystem as an independent blockchain of the first level in Cosmos. Now Mars will not just work as a single credit protocol for one blockchain, but will become a credit protocol available for the entire Cosmos ecosystem, using the possibilities of interaction and component. Mars can function in any Cosmos network, creating interconnected points that are controlled through a hub in a star -like structure, as shown in the figure above. Read further to find out more!
Source: Mars Protocol
The protocol is based on Mars Hub, which connects all points in various Cosmos networks throughout the ecosystem. Each of them contains contracts for a credit account Red Bank and Rover. Mars Hub controls each point and is provided by MARS stakers, which receive a share from the income of the protocol in exchange for participation in the cross-chain control. More about Mars token we will talk later.
This star -shaped architecture allows Mars to maintain a wide range of blockchains. It also limits the impact of the protocol on any separate network, which can have potentially catastrophic consequences, as evidenced by the Terra failure.
Source: Mars Protocol
Red Bank is a fully automated network credit mechanism that facilitates the issuance of loans and loans and, in fact, is the same as the Mars V1 on Terra was, except that it now works at any available point on the Cosmos network. There are four types of participants in Red Bank (it is not necessary to choose any one type).:
Steakers. They steak Mars, control the hub and all points, and also receive a share of income from the protocol.
Lenders. They send assets to Red Bank and receive a commission from borrowers.
Borrowers. They send assets to Red Bank (which also makes them creditors), occupy assets and pay the commission. On the other hand, C2C borrowers can occupy assets and pay a commission without the need to introduce assets to Red Bank.
Liquidators. They extinguish the risk positions in exchange for liquidation bonus.
As you can see above, Red Bank offers two types of loans: loans with security and loans C2C.
The secured borrowing works similarly to the lending protocols such as AAVE or Compound, where users make assets for obtaining a loan with excessive security and pay a commission for borrowing (interest rate).
Source: Mars Protocol
The Mars has a model of interest rates with two inclined, which supports lower interest rates to achieve a certain level of use. It stimulates borrowing when the use coefficient is low and restrains borrowing, significantly increasing interest rates after reaching the optimal level.
Borrowing C2C involves the provision of loans between two contracts, which allows you to provide loans without making a deposit, since borrowers indicate all the parameters and conditions of liquidation. Although this option does not require a deposit to Red Bank, the loan is still secured by the pledge, since the loan agreement contains collateral and eliminates the position if it becomes unprofitable.
C2C loans are not only an additional source of demand for borrowed funds, but also a solution that is characterized by a higher efficiency of capital use, which increases the use factor and, in turn, leads to an increase in deposits due to a higher profitability on loans.
The position can be eliminated if the introduced or occupied volatile asset brings the user’s position to its liquidation value of the loan (LTV), which is determined by management. The state of the user’s debt position is evaluated by the state coefficient (HF), which is the ratio of the amount of the user assets adjusted to their corresponding maximum LTV to the total loan amount. HF determines whether the position is stable (with excess support) or is under the threat of liquidation (with insufficient support). Thus, if the HF user falls below 1, then the position is considered insufficiently secured and can be eliminated. Then the user can pay off the debt to get part of the collateral plus bonus. A detailed explanation of the liquidation process can be found here.
Credit account Rover
Source: Mars Protocol
Credit Rover account is the new basic design of the Mars team. Each account contains user assets and assigned HF, based on the riskiness of a common position. When activating through management on each credit account, several positions with a credit shoulder within the framework of one HF can be opened. In fact, this can be called a cross-marginal account. This means that users can track the unified liquidation LTV for each account, regardless of the number of positions in it.
Assets are not actually stored in a credit account, but are stored in a smart contract that can perform operations with other contracts included in the Whiter through integration. There are three types of integration:
. This is a spare trade and trade with the involvement of borrowed funds at points. Management will determine the basic integration of DEX and borrowed assets in Red Bank. . They contain strategies generating profitability in any supported network. These storage facilities can be developed by anyone and approved through management. . They are engaged in profitable farming with the involvement of borrowed funds, allowing the use of borrowed funds to borrow assets and make a profit.
The account of the account is different in that each credit account is NFT. This opens up a whole world of opportunities, including:
- Identification by creating identification data on the network, which allow the use of social functions, such as leaders tables, copywriting, etc. D.
- Transfer/sale Also possible. Credit accounts (and all positions within them) can be sold on the marketplace or transferred to another user.
- Fractionation It implies that credit accounts can be divided into interchangeable parts, which allows other users to own shares of trade activity account.
- Credit scoring reflects information about the user’s behavior on the network, competence and debt positions.
Please note that credit accounts of account are an autonomous product and that users can interact with Red Bank without a credit account and its functions.
Team and sponsors
Mars Protocol was jointly developed by Delphi Labs, Ideo Colab Ventures and Terraform Labs. There is not so much known about the current team and its past. The team participant said: “There is no MARS team”. They call themselves a “decentralized group”.
A cursory glance at Discord the project shows that the authors came mainly from Delphi Digital and Delphi Labs, including Jose Maria Masedo, Larry0x and Bitcoin_sage.
Mars V1 protocol smart contracts were checked Halborn Security and Oak Security, Both reports can be found here. At the time of writing, not a single audit of version V2 was published. The team said that V2 Contract checks are under development and Halborn and Oak Security are performed. They will be published upon completion.
In Mars V1 Mars was a managing token for the protocol. Closed Mars tokens were presented in the form of XMARS, token liquid stakeing. However, in version V2, the caused Mars tokens are no longer.
Since they were originally released on the Terra Classic network, the team will send new Mars tokens on the basis of two Snapshots After launch Mars Hub. Snopshots dates:
- Snapshot 1: Block 7544910 (May 7, 2022, ~ 11 am to eastern time)
- Snapshot 2: Block 7816580 (May 28, 2022, ~ 11 am to eastern time)
Source: Mars Protocol
The new Mars token will have the same total offer of 1 billion tokens and will be distributed between the community pool (64%), the creators of the Mars (30%) and the stigma of tokens (6%). The stamp of token consists of an existing revolutionary proposal of about 64.4 million tokens and will be divided between Mars and XMARS holders in both snapshots (50%each). Please note that this includes MARS and XMARS tokens, which are in liquid positions in Astroport, Apollodao, Spectrum Protocol and Mars Lockrope. At the time of writing this article, the planned date is not Airdrop.
The community pool is controlled by MARS steakers and can be used to stimulate lending, borrowing, stake, grants and other community programs for strengthening. The tokens distributed among the creators of the Mars are designed for one year, and the three -year Vesting is unlocked since the launch of the Mars V1, its beginning is planned in the 1st quarter of 2023.
As mentioned earlier, MARS stakers will receive a share for the protocol in exchange for help in ensuring the security of the network and participating in the management of the protocol. Steackers will receive 10% of all interest payments, while the remaining 90% will be divided between the MARS Security Fund (10%) and Red Bank depositors (80%).
The insurance fund exists in order to support the protocol if the debt position of the borrower exceeds the cost of its provision. This can happen as a result of exploits of smart contracts, untimely liquidations and attacks of oracles. And they all must be softened with the help of proper risk management measures. The fund receives 10% of the protocol income and converts it into Axlusdc. Please note that compensation is not guaranteed by a 100% protocol and depends on the management.
Source: Mars Protocol
The dates are not indicated in the roadmap, but it begins with the launch of version V2, namely, launching Mars Hub, an independent upchain in Cosmos. This is followed by the launch of their first point on OSMOSIS, activation of an isolated margin and launch more points and credit accounts with crossing.
With the launch of the Mars V2, the team will use the inter -grid architecture of Cosmos to allow the Mars to become the main credit infrastructure for the entire Cosmos ecosystem. Thanks to the star -shaped system, users from networks throughout the ecosystem will once be able to access the overall liquidity, and liquidity will dynamically re -display depending on demand at each point.
Credit protocols are associated with risks, as evidenced by numerous liquidations and cases of bankruptcy in the past and even now in Tradfi, Cefi and Defi. However, with proper use, protocols like Mars expand the capabilities of all users – from experienced traders who enjoy increased capital efficiency, to traders who are not prone to risk that enjoy the advantages of high profitability of deposits in stablecoins.
New Defi Credit Rover from Mars offer many interesting features https://gagarin.news/ru/privacy-policy/ . Integration with DAPP throughout the ecosystem through points will ensure the vertically integrated experience of Defi and functions previously found only in CEFI products. Only time will show whether this idea will be implemented, and therefore we look forward to continuing the development and launch of Mars.
Warning: Bybit employees can be involved in some or all tokens and projects mentioned in the article. This statement prevents any conflict of interests and is not a recommendation to purchase any token or participate in any of the mentioned ecosystems. This content is intended exclusively for introductory purposes and should not be accepted as an investment council. Please study this issue well and be careful if you plan to participate in any of these projects. The opinion expressed in this article belongs to the author (am) and does not reflect the views of Bybit.