MOV JieDai Protocol Explained

What is MOV JieDai protocol?

The MOV JieDai protocol is a crypto asset rate protocol based on the Bytom mainchain and Bytom layer2 sidechain Vapor. Simply speaking, MOV actually realizes the lending service like a bank through rate algorithm model based on smart contract. Users can deposit, withdraw and lending to obtain interest. Of course, different from the credit risk of traditional finance, Over-collateralized lending adopted by MOV can reduce the risk of default on chain.

The advantages of MOV JieDai

Instant borrow & payback, instant deposit & withdrawal

MOV is based on the high-performance sidechain Vapor, which has an instant confirmation. Depositors can withdraw the principal and interest immediately after depositing the coins, while the borrowers can quickly return the borrowed coins and obtain collateral.

Zero on-chain trading fee, zero deposit service fee

Compared with the borrowing and lending on Ethereum, MOV does not charge any on-chain trading fees for borrowing and depositing. At the same time, only 10% of the interest of the borrowed coins is charged as a platform service fee, and the deposit is not charged any expenses.

The world’s first DeFi lending public auction tool

The world’s first product interface supports the auction of liquidation assets, lowering the threshold for use, and ordinary users can participate in, and the winners are selected through a random algorithm to ensure efficiency and fairness.

Separation of JieDai pool and collateral pool to reduce risk

The MOV JieDai pool is separated from the collateral pool, and the collateral pool cannot be used for lending again, which greatly reduces the risk and prevents one pool from affecting other pools.

Where does the profit come from?

Like traditional finance, the profit of users who deposit coins is provided by the interest of users who borrow coins. The JieDai pool is allocated according to the proportion of the coins deposited by each deposit user as well as according to the interest. The variable interest rate under different market supply and demand conditions can be built through the segment function, which can flexibly respond to extreme situations.

Liquidation and Auction

MOV adopts the mechanism of over-collateralized lending, and in extreme cases, it can provide certain solvency by liquidating collateralized assets.

MOV sets a Liquidation line to determine whether to proceed with the liquidation. By comparing the collateral rate and the Liquidation line, it sets the evaluation levels of risk-free, low-risk, high-risk, and prompts the user in time when a risk switch occurs.

When it reaches the liquidation line, the system will automatically auction the collateralized assets. Because the user has been reminded through multiple mechanisms before, it will no longer set a buffer period but directly auction it.

MOV introduces a random algorithm in the liquidation protocol, and the probability of each bidder’s bid is equal. At the same time, through the margin system, malicious bidding is prevented.

It is worth mentioning that MOV will provide the first user-friendly auction interface tool in the DeFi field. Ordinary users can participate in the auction, and through a certain mechanism to ensure the same probability and opportunity as API users, it will further enhance the auction effectiveness.

Security

MOV JieDai guarantees the security of the system and user funds through over-collateralization, separation of the lending pool and the collateral pool, all-weather exchange rate monitoring and risk management system.

Over-collateralization is a common practice in the current DeFi lending business. Because the blockchain has a certain degree of anonymity, it is difficult to pursue liability for breach of contract purely through credit lending. The current lending products such as AAVE and Compound will mix the collateral pool with the lending pool, that is, the user’s collateral will enter its corresponding lending pool, and the collateral can continue to be used as a lending product. Although the efficiency is improved, it also allows the system took more risks, and users returned the borrowed coins but couldn’t get back the collateral. MOV separates the two, and the collateral is no longer lent as a lending assets, ensuring that the borrower can get his collateral back immediately after repayment.

MOV will monitor the exchange rate in real time around the clock, find assets that reach the c liquidation line in time, and conduct liquidation to ensure sufficient funds in the lending pool.

At the same time, MOV and SlowMist reached a strategic cooperation to jointly protect the security of MOV.

Compared with the existing lending products on Ethereum, MOV has natural advantages in terms of performance and costs. At the same time, through innovation, it also has many bright spots in terms of liquidation and security. Through cross-chain, MOV also integrates ecosystems of BTC, LTC, DOT, supplementing non-Ethereum ecosystem lending products.

Publication date: 
06/10/2021 - 11:13
Author: 
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