Mars Ecosystem: The Evolution of the Stablecoin Ecosystem

The ecosystem introduces a new decentralized stablecoin paradigm

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Mars Ecosystem is a platform that is building a new monetary system, by combining the creation and use of the reserve currency, with its three main components: a stablecoin, a volatile token, and an AMM DEX stablecoin.

The relationship between the three components constitutes a positive feedback loop and generates a flywheel effect.

Thus, Mars Ecosystem combines stablecoin creation and use in tandem, introducing a new decentralized stablecoin paradigm.

Mars Stablecoin (USDM) is price stable, capital efficient, scalable and decentralized; while Mars Stablecoin DEX incentivizes the use of Mars Stablecoin, which generates more TVL, volume and transaction fees for Mars Stablecoin DEX compared to the Curve model.

Why base an ecosystem on a stablecoin?

The market cap of decentralized stablecoins (DAI, SUSD, et c.) Grew 20 times last year and that’s just the beginning.


Also, at present, the market capitalization of decentralized stablecoins is 26 billion dollars and decentralized stablecoins are 2 billion dollars, these numbers will change in 3-5 years.

And it is that decentralized stablecoins are in the base layer of decentralized finance (DeFi).

But, to date, there is no stable currency design that simultaneously meets the needs of price stability, decentralization, and scalability. That is why the Mars Ecosystem came about.

The characteristics of the Mars Ecosystem

Mars Ecosystem has seven main characteristics, which make it unique and they are:

Price Stability: The mining and burning mechanism ensures that the USDM price is pegged at $ 1. The market capitalization of USDM is supported by the market capitalization of XMS on several occasions.

Capital Efficiency: It always takes a value of $ 1 in XMS to mint a USDM.

Scalability: the provision of USDM scales with the market capitalization of XMS.

Zero dependency on centralized collateral: USDM price stability is based on XMS and the system.

Value Capture from Stablecoin Adoption: XMS captures part of transaction fees generated on Mars Stablecoin DEX.

Broad integration: USDM will be integrated into other DeFi protocols, as well as crypto payments.

Flyer Effect: The relationship between USDM, XMS, and Mars Stablecoin DEX constitutes a positive feedback loop and generates a shuttlecock effect.

The Mars DeFi protocols

The Mars DeFi protocols include decentralized finance platforms like Mars Swap and Mars StableSwap, which are necessary for the USDM to perform the basic functions of a stablecoin: being a medium of exchange and store of value.

Mars Swap is a Uniswap-type AMM DEX (Automated Decentralized Market Maker Exchange).

The platform incentivizes the provision of liquidity and USDM transactions, through implementations of protocols such as liquidity mining and commercial mining programs.

The transaction fee on Mars Swap is 0.3%, 0.25% goes directly to LP and 0.05% goes to XMS Holders who bet on XMS on MarsSwap.

The specific method of distributing transaction fees to XMS participants is to buy back XMS with transaction fees directly at market value and redistribute them.

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The design that XMS stakeholders can obtain transaction fees from Mars Swap is one of Mars Ecosystem’s solutions to the problem of positive externalities; a core problem within many other stablecoin protocols.

The value generated by the circulation of the USDM in the DeFi world can also be captured by the governance token of Mars Ecosystem XMS.

This design also provides additional value support for XMS, which in turn helps ensure USDM stability.

The governance token

The Mars Ecosystem XMS governance token value capture model includes the following, a minting control mechanism, the value of Mars Treasury control rights, and transaction fees generated on the Mars DeFi protocols.

The former ensures that the market value of XMS is at least 2.5 times the circulating supply of USDM.

Thus, in the case that the market demand for USDM is 100 million, the market value of XMS should be at least 250 million dollars.

If this is not the case, the circulating supply of USDM cannot reach 100 million (at the given time).

This method of capturing value is very effective. Currently, the Maker Protocol’s DAI supply is $ 4.8 billion and the market value of its MKR governance token is $ 3.7 billion.

If the Maker Protocol also uses the minting control mechanism created by the Mars Ecosystem, the market value of the MKR corresponding to 4.8 billion DAI would be $12 billion. This is more than a magnitude of three above the current valuation of $ 3.7 billion.

For their part, XMS holders can determine protocol updates within the Mars Treasury through protocol governance votes.

To prevent a 51% attack on the protocol from occurring, the market capitalization of XMS will always remain at least twice the value of the assets held within Mars Vault.

If the circulating supply of USDM in the market is $ 100 million and, consequently, the Mars Treasury has assets of $ 100 million, then the market value of XMS is at least $ 200 million; otherwise, the Treasury of Mars is at risk of being attacked.

Finally, when users operate Mars DeFi protocols such as Mars Swap and Mars StableSwap, they will be charged transaction fees.

These are allocated in part to the liquidity provider and in part to the protocol itself. The protocol also assigns these fees to XMS participants through XMS buyback and redistribution (and other methods).

The XMS token is listed on CoinMarketCap and the platform is audited by Slowmist and Certik.

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Disclaimer: This press release is for informational purposes only, the information does not constitute investment advice or an offer to invest. The opinions expressed in this article are those of the author and do not necessarily represent the views of CriptomonedaseICO, and should not be attributed to CriptomonedaseICO.

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This post is also available in: Español (Spanish) Русский (Russian)

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