HECO AMA Series Recap — Demeter
Guest: Remi (CMO of Demeter)
Host: Rased from HECO
Question 1: Could you tell us more about your project? In other words, what does Demeter do?
Demeter is a decentralized cryptocurrency marketplace protocol based on the Heco network, dedicated to providing a more stable, secure and decentralized stablecoin solution.
We aim to become the “MakerDAO on the HECO Network “and to solve the problem of the lack of cost-effective stablecoins on HECO and the inefficient use of DeFi liquidity farming assets.
However, we are not stopping at just being “another MakerDAO”, we want to offer our users much more. DEMETER has made further innovations on top of MakerDAO and Compoud, introducing unique features such as Credit Rating Model (DCRM), Dynamic Interest Rate Supply Mechanism (DIRSM), Shared Revenue-Treasury double layer governance model, inflation tax, etc. to provide users with more convenient, efficient and well-rounded lending services
Question 2: There are many similar out there, some have been quite successful. What is special about Demeter compared to other projects?
Demeter has our very unique features and advantages that set us apart from many others in the market.
First of all, Demeter provides our users a better decentralized stablecoin solution.
Demeter, like MakerDAO, through over-collateralising, all issued stablecoins are backed by sufficient assets, the information on the chain is open and transparent, and there is no room for foul play.
Secondly, other collateralized stablecoins such as DAI or VAI are often out of anchorage from time to time, especially VAI. It is at negative premium level for a long time, we believe this kind of de-anchoring is unjustified for stablecoins, therefore we designed the Target Rate Feedback Mechanism (TRFM) and Dynamic Interest Rate Supply Mechanism (DIRSM) to make sure that the value of DUSD would not drift away from USD.
The protocol is designed to maximize efficiency of capital utilization.
From DeFi Summer 2020 to DeFi Autumn 2021, we can see that DeFi LEGO has been refined like never before, with DeFi’s total TVL exceeding $110 billion, a large amount of assets being invested in various protocols, which is mainly used by users to provide liquidity for trading needs. For example, MDEX alone has a TVL of $1.47 billion on HECO.
Although these LP assets have poor liquidity, they do make very good credit collateral. In V1, Demeter will support some high-quality LP assets as collateral, while in V2 and V3, the collateral assets will also include board vouchers, node voting vouchers, structured financial assets, etc., maximizing the potential of the assets in the DeFi ecosystem
Our users will receive genuine, secure and sustainable returns from the protocol.
In terms of liquidity mining, Demeter has a well-designed mining model that provides participants in the protocol with ample rewards, including depositing and borrowing, liquidity mining, and minting. Users can also participate through other projects within the HECO ecosystem and pick other approaches to participate such as single-token mining and leveraged mining based on their risk preferences. Demeter is expected to be one of the highest yielding DeFi projects on HECO once it is live.
It should be specifically noted that we believe a healthy DeFi project necessarily needs to rely on genuine cash inflows from actual business, rather than maintaining a phony boom by constantly issuing new tokens. Therefore, Demeter’s DAO is not within the scope of mining. Instead, the DAO rewards are purely real project revenues, with revenue sources that include
Question 3: Great, could you give us some info on the DMT Token?
DMT is Demeter protocol’s governance token, similar to the MakerDao’s Maker Token (MKR). DMT can be used by the holders to:
· Participate in Governance Voting on various matters within the protocol.
Since Demeter fully adopts DAO governance, Demeter’s governance rights are particularly important. Governance practices such as user key parameter setting, and asset allocation are made via DMT’s voting decisions.
· Participate in DAO Treasury Allocation.
· Participate in incentives allocation from DAO revenue pool
Users can earn rewards by staking DMT, which is equivalent to bank deposits in the centralized world. Similarly, reward yours vary depending on the term, except that staking DMT will have higher flexibility as with higher returns.
Question 4: What would be one’s motive to hold DMT tokens? What can we do with $DMT ?
Well, an easy answer to that is that DMT holders can earn high rewards by staking them, and participate in the revenue & incentive allocation .
Question 5 What is DUSD?
DUSD is Demeter’s stablecoin. Valuing its security and sustainability, DUSD is generated by overcollateralization.
Minting DUSD is equivalent to lending $1USD of debt, and the credit will be shared between minting and borrowing. In order to maintain the 1:1 anchoring of DUSD to USD, Demeter has established a series of monetary policies, including the Target Rate Feedback Mechanism (TRFM) and Dynamic Interest Rate Supply Mechanism.
The value of DUSD is backed by a basket of cryptocurrency combinations, which is not only differentiated from the collateralized fiat currencies or a single cryptocurrency on other decentralized stablecoin protocols, but also makes DUSD highly decentralized, faster, safer, more cost-efficient, and easier to use through the HECO network.
Question 6. What are the main usages of DUSD and on which platforms can you use DUSD?
DUSD was developed with the intention that is similar to DAI’s: with the hope of achieving a more decentralized approach to the minting and use of stablecoins. DUSD’s application scenarios can be categorised as below:
a. Circulating in all Heco-based DeFi protocols.
b. Paying for goods and services.
c. Releasing more liquidity by collateralizing minting stablecoins or enabling basic leverage.
It should be noted that one of DUSD’s long-term monetary policy goals is to provide a supply of stablecoins at no more than 2% APR, a significant advantage over expensive USDT borrowing.
Question 7: If you were to summarize your project in 1 word, what would it be? Why?
I think the best word to summarize our project would be “freedom”. “Freedom” for Demeter has three different meanings.
We want to build DUSD as a free currency comparable to DAI, so that anyone can use the decentralized permissionless stablecoin without barriers.
Secondly, we discuss the freedom of holding multiple assets. With the rapid growth of DeFi, many assets were formed into LPs, staked and lost their liquidity. In the future, Demeter will launch multiple types of asset certificates, such as MDX board tokens, LP assets, HECO’s DAO tokens, some structured NFT assets, etc., setting everyone’s assets “free”..
The third tier is financial freedom, where the vast majority of the revenue generated by the Demeter protocol will be shared with DMT holders in the hope of making long-term supporters richly rewarded.
Question 8: How do you guarantee users’ asset security?
Security is the most important feature for Demeter. The protocol has been third-party audited by PeckShield, and we will submit it to other reputable agencies for multiple audits afterwards to ensure the security of the platform.