Midas Dollar: A Decentralized Stablecoin with an Algorithmic Central Bank

Midas Dollar is a member of an ecosystem that comprises three tokens, Midas Dollar (MDO), Midas Dollar Shares (MDS), and Midas Dollar Bonds (MDB). MDO is designed as a reserve asset in the ecosystem, while the other tokens are used to peg the price of MDO.

Introduction

In line with its mission to contribute to the massive adoption of blockchain technology by developing a suite of innovative customer-focused blockchain products and services, Midas Protocol, an established blockchain solutions company, has launched an algorithmic stable coin stablecoin, Midas Dollar. The Midas team is based in Singapore and Vietnam where they have built their Midas ecosystem over the last 3 years, developing a plethora of blockchain products (www.midas.eco).

Algorithmic Stable Coins

Algorithmic stable coins are unlike the two other types of stable coins, Fiat-Collateralized and Crypto Collateralized. Algorithmic stable coins rely on an algorithm to recognize specific parameters, where it will then adjust the supply to reach its peg price accordingly. For example, rebase tokens will increase supply when the token price is above its peg, but it will reduce supply when its price is below its peg.

Rebase tokens are a fundamental mechanism used in Algorithmic stable coins; BDollar, a Basis Cash fork, leverages a different agent referred to as seigniorage. Seigniorage is defined as the difference between the real value versus the cost of producing it, typically for currencies. These algorithmic tokens create positive seigniorage, which makes an economic profit, allowing for users to profit.

The existing system revolves around three tokens, the stable coin, a bond, and a share. The bond and the share tokens are used to adjust the supply to reach the asset’s peg price.

What Is Midas Dollar? 

Launched on February 7 by parent platform Midas Ecosystem, Midas Dollar (MDO) is a stablecoin built on the Binance Smart Chain with cross-chain capabilities. The Midas Dollar stability is controlled by an innovative algorithm that governs its volatility by either contracting or expanding its supply keeping its price always moving in the direction of the target price. Midas Dollar is pegged to the Binance USD(BUSD). The algorithm controlling the value of MDO is thus programmed to provide a mechanism that perpetually drives the value of 1 MDO to 1 BUSD.

Midas Dollar is a member of an ecosystem that comprises three tokens, Midas Dollar (MDO), Midas Dollar Shares (MDS), and Midas Dollar Bonds (MDB). MDO is designed as a reserve asset in the ecosystem, while the other tokens are used to peg the price of MDO.

MDO has cross-chain compatibility with Huobi ECO Chain. The MDO variant on Huobi ECO Chain is the Midas Heco Dollar (MHDO). MDO and MHDO are interchangeable. The cross-chain interoperability has improved the value and reach that MDO offers. 

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Features of the Midas Dollar

The MDO possesses features that set it apart from other stablecoins, such as 

It is the first crosschain algorithmic stablecoin between Binance’s Smart Chain and Huobi’s ECO Chain. 

Midas Dollar leveraged on previously existing algorithmic stablecoins such as Basis, bDollar etc, and implemented certain parameters such as epoch expansion.

Midas Dollar has an elastic epoch time that is longer during expansion and shorter during contraction. 

The protocol has a strong Decentralized Autonomous Organisation (DAO) fund that stabilizes the price better. 

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What Roles do MDO, MDS, & MDB Play?

MDO: Midas Dollar is mainly used as a medium of exchange in the Midas Dollar protocol. The algorithm adjusts the supply to keep its value pegged to 1 BUSD. 

MDS: Midas Dollar Shares is a token that represents trust in the ability of the system to keep the value of MDO pegged to 1 BUSD as shareholders are paid with MDO inflation. MDS confers voting rights on its holders and gives them the right to make proposals for the improvement of the protocol. 

MDB: Midas Dollar Bonds are bonds issued whenever the price of MDO rises or falls below its peg price. MDBs exchange for MDO in a 1:1 ratio and helping peg MDO to. MDBs don’t have any expiration date. 

This unique three-token system provides incentives through seigniorage, working to always move the price of MDO in its peg direction. More details about MDO, MDS, and MDB can be seen here. 

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Roadmap

The Midas Dollar is still being expanded as the innovative team builds more functionalities and uses them into the ecosystem. 10 days after launch and $MDO & $MDS have been listed on bVaults by bEarn.Fi

The following are the projected landmarks of development that the team has placed on the roadmap. 

First Quarter, 2021

Launching Midas Dollar platform Done) 

Integrated BEP20 (BUSD, BCash, MDO, MDS for application and games at Midas Ecosystem and its partners)

Midas Vaults with double/triple tokens reward

Midas Decentralized Exchange (MiDex) 

Second Quarter, 2021

More Bridges (to other blockchain networks)

Orderbook MiDex

Margin/Option MiDex

Public API for MDO payment gateway

Lending System

NFT Market

Third Quarter, 2021

Cross-chain natively (PolkaDot, Solana)

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End Notes

Midas Dollar is a product of the Midas Ecosystem. It is their latest contribution to the ever-growing utility that DeFi is capable of. Midas Ecosystem has a vision of becoming one of the top blockchain companies globally in terms of market capitalization and profitability. As it continues to add value to DeFi users through its innovative blockchain products, the future is certainly looking bright.

Source : bsc.news