Dex Money Market is an algorithmic reserve protocol with multi step auto-compounded strategies and ETF rewards. Our protocol offers a single regulatory mechanism and protocol owned liquidity.
Inspired by precursive projects before us (Tomb Finance, Olympus DAO, Balancer, Beefy Finance) we have developed a truly unique multi-token protocol that empowers users by simplifying the advanced trading strategies employed by experienced investors and promotes growth through a low-risk algorithmic trading model.
So what’s different?
Money Market operates on a three token system designed to work in harmony with one another. Our protocol uses advanced tokenomics to accomplish three primary objectives.
How does it work?
The Money Market relies on a balance between circulating supply and treasury backed assets.
After presale the only new supply of USDEX going into circulation comes from the regulation pool (boardroom).
In the traditional model, these tokens would be dispersed to boardroom stakers immediately every epoch based upon the TWAP.
In our model, the stakers do not receive USDEX. Instead the protocol takes in all of the newly minted USDEX and then only sells enough to bring it back to peg.
Once the protocol sells the correct amount of USDEX, those tokens (which are now counted within the circulating supply) can be bought or sold – so the protocol never sells (or puts into circulation) more than the treasury can buy back at the peg price.
The profits from the sale of those USDEX tokens are then converted to dexETF tokens and redistributed back to dexSHARE stakers. If these stakers decide they want to sell those rewards at this point they can do so all they want as this has no impact on the price of the peg token.
The Money Market protocol controls the supply of peg tokens by only selling when the price is optimally above peg and only selling an amount that can be covered by treasury backed assets so the USDEX that was previously sold can be bought back if needed.
USDEX token is designed to be used as a medium of exchange. The built-in stability mechanism in the protocol aims to maintain USDEX’s peg to 1 USDC token.
dexSHARES are one of the ways to measure the value of the Money Markets Protocol and shareholder trust in its ability to maintain USDEX close to peg. dexSHARE holders have voting rights (governance) on proposals to improve the protocol and future use cases within the Money Market protocol.
SHARE max supply: 100,001
Pre Sale + Initial Funding of dexDAO Treasury: 3,500
dexDAO Treasury (dexSHARE Bonds): 33,500 (12 mo/vested)
Team: 5,000 (12 mo/vested)
Rewards (3 pools): 58,000 (12/mo)
dexETF token represents the average cumulative value of a basket of selected cryptocurrencies and is used to reduce sell pressure of USDEX. During epoch expansions the protocol mints USDEX which is then collected and converted into dexETF tokens prior to being re-distributed proportionally to all dexSHARE holders who have staked their tokens in the Regulation pool.
ETF Regulation Pool Distribution
70% Reward for dexSHARE Stakers
10% Treasury Backed Assets
10% Dev Fund
5% USDEX Liquidity
5% dexSHARE Liquidity
Protocol Owned Liquidity
In order to incentivize users, Money Market tokens can be purchased at a discount in a process known as “Bonding”. Bonds have a vesting period to prevent users from selling all the discounted tokens at once for a quick profit. The list of bondable tokens includes currencies such as dexIRA and dexETF, ensuring consistent buy pressure for native tokens within the ecosystem.
Bonding vs. Renting Liquidity
Liquidity is a necessity for a protocol’s existence. Without it, trading depth is impossible. To incentivize this, protocols can offer substantial rates in ‘farming’ fees. Liquidity providers come, attracted by high rates, and are willing to take on the risks of liquidity provision in exchange for yield.
However, the common phrase ‘Total Value Locked’ (TVL), is quite a misnomer. Liquidity deposited in yield farms can generally be withdrawn at any time, and for that reason should be considered ‘mercenary’. The vast majority of farmers are chasing only the highest yield, not the best project; should rewards ever fall, their departures are sure to follow.
Bonding on the other hand offers the sale of an asset with funds deposited into the treasury which can then be used to “buy back” liquidity or collateralize an asset (or peg token) wink, wink.
Similar to other seigniorage based algorithmic protocols, the expansion supply of USDEX is determined based upon the time-weighted average price (TWAP) of USDEX.
At the beginning of every epoch, if the TWAP of USDEX is greater than 1.01, new USDEX will be minted at a maximum expansion of 4.5%.
However, rather than being immediately distributed to Regulation pool stakers, the new supply of USDEX is sent to the dexDAO treasury where it can be sold off based upon specific parameters and only after calculating factors such as price, circulating supply and treasury backed assets.
As the USDEX is sold off it is then converted into our dexETF tokens and redistributed back to Regulation pool stakers thereby relieving sell pressure.
A …… Total value of all treasury backed assets
B …… Quantity of USDEX in circulation x $1.00
C …… Treasury Surplus/shortage (in USD)
A – B = C
If C is a negative number then no ETF minting
If C is a positive number then sell USDEX on following parameters:
If TWAP is 1.5 + sell .5% of available USDEX in intervals
If TWAP is 2 + sell 1% of available USDEX in intervals
If TWAP is 2.5 + sell 1.5% of available USDEX in intervals
If TWAP is 3 + sell 2% of available USDEX in intervals
If TWAP is 3.5 + sell 2.5% of available USDEX in intervals
If TWAP is 4 + sell 3% of available USDEX in intervals
If TWAP is 4.5 + sell 3.5% of available USDEX in intervals
If TWAP is 5 + sell 4% of available USDEX in intervals
Peg Regulation Simplified
If you’re the only pie maker in town and you sell your pies for $5 you will always have enough money to buy your pies back for $2 if they are for sale.
Solving the fatal flaw
In the traditional model, when the price of the peg token falls below peg, BONDs are issued to help incentivize buy pressure. These BONDs can then be redeemed for more peg tokens when the price is above peg in the future, plus an extra incentive for the longer they are held above peg. However, if the price of the peg token never recovers, investors who purchased the BONDs have no way to redeem their deposits.
Dex Finance eliminates this problem by using the aforementioned method of regulation and protects its investors from losses in the process.
Dex Finance enables users to stake their tokens within a multi-step strategy rather than manually having to adjust for emission rates and market fluctuations. Investors receive a single receipt token which carries the same value as if they were navigating in and out of multiple farm pools. This increases the efficiency with which an investor can grow their position, and reduces the burden on them to be attentive to multiple strategies.
Strategies are based on risk levels that are determined on the allocations between each pool.
Our unique method of peg regulation assumes that the cost of USDEX will always stay within relative proximity to the price of USDC thereby drastically reducing the risk of loss due to price action.
And because the price of USDEX is pegged to USDC (a collateral backed stable coin with a value of $1) the risk of impermanent loss is nearly eliminated.
Given these two factors, one can enter into the USDEX/USDC farm at any time with limited risk. Conversely, the price of dexSHARE is meant to fluctuate in price and thereby carries more of an inherent risk with greater upside potential.
Investors may choose to zap into any of our strategies with a single click and have their funds distributed into the pools based on their risk tolerance.
Money Market Rewards
USDEX & dexSHARE will be added to the dex dashboard so you will be able to earn in the Money Market for holding dexIRA.
ETF rewards will be given out containing dexIRA creating constant buy pressure.
Early Entry on Presale
dexIRA will need to be held in order to participate in the dexPAD presale.
Money Market Farming
Investors will be able to farm dexSHARE in Money Market farms by using dexIRA.
Investors will be able to purchase Money Market Bonds with dexIRA at below market prices.