MUSD — The liquidity bedrock of MM ecosystem
Hi Burrow, MM Finance team thought that it would be timely to share about some of the finer details of what they have been planning, in order to bring about fresh perspectives, so all of you can understand the gameplan of the team. As they have always been communicating, MM Finance was built to be an ecosystem. For this to become a reality, all the different pieces need to be combined efficiently to create synergistic effects.
Currently, $MUSD has over $60mil USD in stablecoin liquidity, where their team has targets of over $200mil USD. Once this is attained, $MUSD can be considered to be a very low-risk stablecoin that runs a very low risk of de-pegging. Even as it stands, $60mil USD in liquidity is already considerably safe. Should all the current $MUSD in circulation be sold, they should probably see a maximum of 5% price impact, but that is a bank run situation that should not happen as $MUSD is an overcollterised stablecoin. They think you catch the drift, on how $MUSD is currently poised to become the native stablecoin of Cronos chain.
Powering $MUSD
In the next phase of our plans, they are now activating, and going all guns blazing on growing $MUSD adoption by utillising all the ecosystem tools. Very soon, $MUSD will be adopted as the de-facto liquidity token in the MM ecosystem with deep liquidity pools for major tokens such as $MMF, $CRO, $USDC, etc. They are currently also considering upgrading the $MMO token to adopt the usage of $MUSD in its liquidity pools, while eventually having $MMO staking payout in $MUSD instead of $CRO. (This could potentially be a welcome change as $MUSD is a stablecoin that will not have the volatility characteristics of $CRO).
Why make this switch to focus on the use of $MUSD?
With higher $MUSD adoption, they will see higher adoption for the entiriety of the MM ecosystem. At the same time, this generates more fees that goes back to the token holders. Deepening $MUSD liquidity pools also allows them to build interesting tools and strategies like the following:
- Self-repaying loans by supplying $MMF into MMF.money platform. This also opens up a possibility of performing a leveraged long through the use of $MUSD to attain APRs of up to 400% (all done through the MMF.money platform!)
- Possible tokenomics upgrades for tokens such as $MMO as mentioned above
- Enables us to scale up fractional $MUSD minting through the locking up of $MMF tokens in similar style to how $LUNA and $UST works
- Lowers token volatility which could be caused by the release of bearish news, or larger macro events
- Improved capital efficiency for our entire MM ecosystem
As such, MM Finance team will be focusing on performing changes to promote $MUSD adoption. This helps them to open up a world of possibilities where there can only be upside for their MM ecosystem. They hope that this piece has provided some key insights for you to understand the kind of a strategy that the team is employing for the betterment of their ecosystem.
About MM Finance
MM Finance is the FIRST AMM & DEX on Cronos Chain that offers fee rebates via trade mining. We have the lowest trading fees on Cronos Chain. On top of that, we are the FIRST to introduce Protocol Owned Liquidity (POL) into our DEX!
