Moma Protocol: Factory, Launcher and Aggregator for Decentralized Money Markets
With the rise of decentralized finance (DeFi), liquidity enhancement of cryptocurrency assets is becoming the most indispensable theme of the future development of the financial world. Several protocols with the essence of liquidity enhancement have been created. For instance, Uniswap is a smart contract system that allows users to create and inject liquidity into an infinite number of transaction pairs. It acts as a decentralized transaction protocol which provides liquidity protection for almost all cryptocurrency assets. Compound is a decentralized lending protocol that provides lending liquidity between a limited number of cryptocurrencies through overcollateralized Lending Pools. The success of Uniswap and Compound is a result of providing effective liquidity for the Defi market as well as the integration of token incentives and community governance.
While pioneers and innovators have made a tremendous number of achievements, DeFi is still in the early stages with many needs yet to be discovered or met. One of the biggest concerns is the lack of diversity and liquidity in the lending markets (Money Markets). In the successful cases of Aave, Compound and Cream, we have witnessed the integration of some cryptocurrency assets through their respective protocols to meet numerous lending needs. However, these existing solutions offer far less scalability, selectivity, and incentives than some cryptocurrency assets as well as lower growth rate of asset size and community demand for lending in the currencies they hold.
Moma Protocol is a solution that meets the liquidity, scalability, incentive diversification, and speculative needs of the lending markets.
Moma Protocol can create and manage lending markets. The protocol offers a proprietary customizable Smart Contract Factory which serves the lending markets and users in the following three roles:
Moma provides a Smart Contract Factory for the creation and management of Lending Pools. Everyone can create a self-managed Lending Pool through Moma, and risk control and interest rate management can be carried out by setting the types of cryptocurrency assets and other parameters supported by the Lending Pools. Each Lending Pool supports different cryptocurrencies because of the different needs and motivations of the creators, so each independently created Lending Pool will increase the diversity of digital assets supported by the Moma lending market.
Each Lending Pool created is a set of smart contract systems that is functionally consistent with the current lending platforms of Compound and Aave. Because of this, Moma can be understood as an automated Smart Contract Factory that can produce unlimited Aave,Compound and Cream to support different types of cryptocurrency assets and adopt different risk control strategies.
Inevitably, the creation of each Lending Pool also bring new risks, but since the risks of each Lending Pool are independent and do not affect other Lending Pools, users only need to be cautious of the risks of the Lending Pool in which they choose to participate. As new Lending Pools are constantly created, the operators of multiple Lending Pools will compete with users in several ways including risk control, interest rate setting, liquidity, etc. The overall risk level of Moma lending platforms will be gradually dispersed and reduced due to these inter-pool competitions. To deal with unknown risk factors, Moma also introduces a new role of “Whistleblower” to evaluate and identify risks in a decentralized manner. Each Lending Pool also responds to possible risks by providing Reserve Pools and Staking Management Pools at the token economy level. Moma regards risk management as the core of the system and adopts the combination of centralization and decentralization to warn and control. A complete and extensible risk control system is formed based on isolating the risks of each Lending Pool.
Moma creatively divides the creation process of Lending Pools into two stages to solve the problems of initiating, accelerating and liquidity-enhancing Lending Pools:
Phase 1: Launch Pool
The initial stage of all created Lending Pools is the Launch Pool stage. Compared with the Lending Pool, the Launch Pool only turns on the Deposit function, not the Borrow function so the operation of digital asset deposit and withdrawal can be realized. Moma designs a custom incentive pool for the Launch Pool, where the creator of the Pool, or the Pool Builder, can inject cryptocurrency assets into the incentive pool. The cryptocurrency assets in the incentive pool can then be employed to motivate all users who deposit the specified assets in this Launch Pool after setting the release parameters. This process is the same as the popular “Community Launch” or “Fair Launch” in the DeFi world. The goal is to encourage users to deposit assets and participate in mining through the setting of incentive pools to obtain the attention of users and complete the allocation of initial governance tokens. The function of Launch Pool provides a perfect solution for this.
There is a need for Community Launch in any blockchain project community, whether a Lending Pool is
required or not. This enables the opening of the community activation driven by the token incentives through the Launch Pool. Moma will become both a connector and Factory to help the project complete the entire Community Launch process and help DeFi users obtain project launch incentives.
Phase 2:Lending Pool
After the Launch Pool process is complete, the Pool Builder can choose to upgrade the Launch Pool to a Lending Pool, turning on the Borrow function and using the Oracle to feed price and employing the appropriate interest rate model and other parameters to open a decentralized excess mortgage lending platform. Projects and Pool Builders can not only support the lending liquidity of the custom token through the operation of the Lending Pool, but also obtain additional lending fee income and token incentive of Moma.
Each Lending Pool is also designed to be equipped with a customizable incentive pool where the Pool Builder can inject any digital asset to incentivize lending behavior to drive better liquidity and more revenue.
Moma Protocol can help any project complete the community start-up through Launch Pool start-up, and then upgrade to the Lending Pool process. One can seamlessly open a self-operated lending platform after obtaining the basic traffic, influence and user assets. As a user participating in DeFi, he can not only participate in the Launch Pool of the massive new projects of the Moma platform to start mining, but also participate in the lending and mining of various Lending Pools. Moma increases the speculation value of the whole system by providing more mining options, thus attracting more projects and users. The activity of both the project and user will attract more Launch Pools and Lending Pools, thus forming a growth flywheel for Moma.
The role of Launch Pool is not only to provide acceleration for the community start-up of Lending Pool and projects, but more importantly to create application scenarios of Lending Pools. Suppose that the user wants to participate in the start-up mining of the Launch Pool, but there is no suitable target asset (assumed to be ETH) that can be deposited. He can stake and lend his own held cryptocurrency assets (such as WBTC) in any suitable Lending Pools and then deposit ETH in the Launch Pool to get the incentive to start mining. This completes the lending process in the Lending Pool and thus generates interest revenue.
The purpose of the Lending Pool is that it can handle the yield-generation demand of the mining revenue generated from Launch Pool. Some of the cryptocurrency assets obtained by users from Launch Pool mining will be traded into other assets, while others will have yield generation needs. Lending Pool can provide a yield-generation scenario for the cryptocurrency asset and further meet the user’s investment demand.
In short, the Launch Pool starts and accelerates the Lending Pool. At the same time, the Launch Pool creates a lending scenario for the Lending Pool, while the Lending Pool undertakes the yield-generation demand for the Launch Pool income, constituting a complete ecological closed loop.
Based on the production and distribution of numerous Launch Pools and Lending Pools, Moma Protocol is obliged to act as an aggregator to help users address the diverse and personalized needs of deposit, lending and community mining.
Moma stores and analyzes the data of all Pools and related digital assets. It also tries to provide information on returns and risks through multiple dimensions, including total lockup amount, number of participating addresses, number of transactions, risk ratings for individual digital assets, etc. This data all will be used to guide decisions during aggregation.
Users can search all the Pools supporting the deposit and lending of target assets in Moma for all the Pools, and can make decisions with reference to multiple information dimensions such as interest rate, risk, incentive, et al. At the same time, Moma will also provide the recommended best path to help users complete the process with the lowest cost and risk.
A Price Oracle maintains the current exchange rate for each supporting asset. Moma Protocol introduces two feed price mechanisms as follows:
Committee Feeding Price Mechanism
The ability to set asset prices is entrusted to a committee that centralizes the prices of several exchanges and completes chain feeding price by “Whistleblowers”. These exchange rates are used to determine borrowing capacity, collateral requirements, and all functions that need to calculate the valuation of the account.
The operating mechanism is as follows:
1) Aggregate prices are calculated through price aggregation contracts:
First, several designated exchanges upload the sub-chain price to the price aggregation contract of the specified subject matter in each round. The contract calculates the price average and standard deviation of the same underlying asset provided by several exchanges:
● If the standard deviation is not greater than the preset tolerance threshold, the price average is taken as the credible price to be confirmed in the round.
● If the standard deviation is greater than the preset tolerance threshold, the trusted price to be confirmed in the round is empty.
2) “Whistleblower” circulates prices to be confirm credibility in each round. If the price is accurate, it then will be confirmed as the final price. If it is empty, then the early warning mechanism will be initiated, and the manual intervention will be used to check the reason.
Decentralized Feeding Price Mechanism
Moma will integrate Chainlink Oracle and launch its own decentralized price Oracle solution in the future.
Moma Decentralized Oracle Solutions are conceived as follows:
Custom reputation system: Moma will give each Pool full autonomy, and each Pool can choose to establish its own prophecy feeding price market. Supported custom dimensions are as follows:
● Act as a threshold for the price feeders
● Introduction of custom-made reward and punishment mechanism
● Set up of price update cycle
● Custom price audit mechanism
Crypto Asset Risk Rating Database
Moma prompts any risks associated with the encrypted asset itself by maintaining an cryptocurrency asset risk rating database, such as the risks of price manipulation caused by excessive centralization, insufficient liquidity, et al. The user can see the rating score and the recommended setting parameters of the cryptocurrency assets related to the Pool when participating in any Pool. If there is a difference with the actual parameters, the users can judge and decide the strategy of participation by themselves according to the information. In this way, most of the risks associated with cryptocurrency assets can be prompted and avoided.
With the expansion of the Moma business and the increase of the number of Lending Pools, the workload of risk assessment and judgment will become very large. It will be impossible to complete all information judgment only through the risk control department of Moma. To accomplish this extremely important task, Moma introduced the role of “Whistleblower” in the system. Any user can become a Whistleblowers by pledging Moma collateral and submitting risk warning information. The Moma will judge the effectiveness of risk warning information through community or committee governance. Once the information is confirmed to be factual, the Whistleblower who submits the information will be encouraged by the Moma and the related Lending Pools. If the information is malicious, the collateral Moma token will be confiscated.
By encouraging Whistleblower to submit correct risk warning information, the Moma’s overall risk will be reduced by the decentralization of early warning. This risk warning system can be seen as a form of pre-insurance.
Reserve Pools and Collateral Management Pool
Reserve Pools and Collateral Management Pools will be set up for all the Pools by Moma to deal with unexpected situations in a more thorough way. The Reserve Pool will deposit some of the Lending Pool interest income into it and form a mobile fund pool. In the event of any loss, funds in the Reserve Pool will be mobilized for compensation.
The Collateral Management Pool is the collateral fund pool formed by the corresponding collateral in the form of Moma governance tokens used by the Pool Manager when upgrading a Launch Pool to a Lending Pool. If any management problems occur during the pool operation process and result in losses on the sider side, MOMA tokens in the Collateral Management Pool will be mobilized to compensate the affected users.
Moma Protocol Token is the original governance token of the Moma protocol. The token symbol is MOMA, and the total amount is 100 million.
MOMA tokens are mainly used to motivate liquidity providers on the Moma platform and to involve as many users as possible in the development management and protocol governance.
Early Moma uses mainly include the following aspects — voting governance, collateral for creation of sub-market, and collateral for participation in platform income.
● $MOMA holders can obtain partial incentives of the platform transaction fee.
● $MOMA holders can enjoy certain privileges and interests for future use of the platform’s lending market or other services.
● $MOMA holders can vote to participate in the development and key governance of the platform.
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