Hi Burrow, we thank you all for your active participation in all of our social channels. Our team has been hard at work compiling a list of all pertinent queries that you may have regarding our recent announcement on our 2nd Governance Voting for Launchpad of DawnStar Finance. We’ve thoughtfully prepared a series of answers that should answer a majority of the queries you may have, but do keep them coming as we attempt to ensure all queries are answered. We have also handpicked some insinuations thrown about that we feel are important to address as well!!
Q: Why are we proposing to launch M̶S̶F̶ DSF?
A: For the benefit of those who have not participated in the MM ecosystem before, we will lay out the thought processes for each of our products and why we chose to propose the launch of DSF. Essentially, for a DEX to remain healthy and thrive, it requires 2 main things, liquidity providers, and trading volume. As of today, due to the resounding MM brand, we have managed to attract liquidity providers to the tune of close to 500 mil USD. That said, this TVL that we have locked in are generally at the expense of our native MMF token holders, because we are providing liquidity mining incentives that tends to dilute MMF holders. Now, our MMF token holders are holding on because they believe that we can help to build utility for the MMF token to drive value. Liquidity providers are only concerned about APR, and our team seeks to eventually reduce MMF emissions to lower dilution, but we wish to still retain these liquidity providers. We believe we can do so only if we manage to make up for the shortfall with trading fees as the APR.
At the core of it all, our team seeks to accumulate more trading fees to form POL, as well as for token buybacks, which is highly beneficial for sentiment and will directly benefit our native token holders. As of today, our team has amassed close to over 300k USD in terms of trading fees, ready for buybacks and also for defending DSF peg (But generally, when we perform DSF buybacks, we are also performing MMF buybacks due to how liquidity works, so there should be decent price action for MMF holders!). So, our team has ever launched multiple products before, which include items such as stablecoins, stableswap, isolated lending markets, yield optimizers, and they all play a different role in the ecosystem. Hence the question; what is the role of DSF?
DSF platform will be built as a touchpoint product that generally attracts new users into our ecosystem. A result of this is the presence of more holders of our native tokens alongside the ability to generate way more trading fees that eventually goes towards token buybacks. With larger trading fees, we will also be significantly less reliant on emissions to retain our liquidity providers. One of MM’s key milestones was generating close to $400 million USD daily trading volume on Cronos chain at one point, and a large part of it was due to the interest and trading generated from the launch of our SVN product.
That said, many lessons were learnt regarding how a more sustainable product can be built. This is also why our team had plans to launch a Decentralised Perpetual Exchange product that will provide different forms utility to DSF holders. (The finer details are being worked on right now, and will be released shortly, but in essence, we look to vamp much needed liquidity for our MMX product through the use of DSF incentives. Upon successful execution, we will probably see close to 400k USD worth of trading fees generated daily that will result in huge buybacks for our native tokens, that is also distributed as fees). This is an advantage unique only to our MM ecosystem, precisely because we have successfully built an ecosystem.
Lastly, it is also important to note that the launch of DSF platform will induce both demand and supply shocks for the MMF token, and this generally means that the price of MMF tokens will see huge appreciation. In our days on Cronos, our SVN product was launched to huge fanfare, taking our token from a price of $0.40 up to its all-time high of close to $1.80 (before we were properly hit by the full-blown LUNA/UST FUD and stablecoin depegging saga).
Q: Will MMF tokens dump from the launch of DSF?
A: A certain narrative is making its rounds about how DSF tokens has the ability to tank the price of MMF due to large inflation from DSF. The reality is that this is not the case. If you take a deep dive down the rabbit hole into how liquidity and the AMM algorithm works, you will realise that DSF will only be able to derive its token value from the MMF token. Any amount of DSF token that is being minted (from inflation) does not have the ability to tank the price of MMF tokens proportionately. Most users tend to assume that if 1 $MMF is minted per second, and 1 $DSF is being minted per second, it represents twice the inflation against the value of $MMF tokens, and that is undeniably false.
The transfer of value between both the MMF tokens and the DSF tokens are governed by liquidity provided between the MMF-DSF trading pair. Now, emitting 2 $MMF per second vs emitting 1 $MMF + 1 $DSF is not the same. The only way $DSF can retain its value is when each $DSF is paired to each $MMF token into a liquidity pool. That happens only when users buy $MMF through MMF-USDC liquidity pool (pushing up prices of MMF), and pair it with $DSF. Conversely, if they do not own $DSF, they would also need to buy $DSF token through USDC-MMF-DSF liquidity pools. For each MMF and DSF that is paired together, it will require a corresponding amount of dollars that is bought INTO the ecosystem (before they start generating staking rewards).
Further, when you sell DSF tokens, you are only diluting the value of the MMF-DSF liquidity pools, and not the value of MMF-USDC liquidity pools, unless a user fully cashes out of the ecosystem. Because money cannot be printed out of nowhere, it is always due to the corresponding amount of liquidity in the pools. A larger part of the reason why inflation is not doubled, is precisely due to how slippage comes into play. The content surrounding this is heavy, but if there is sufficient interest shown as to how this works, our team will be happy to put up a discussion for this.
Now given how we have addressed how inflation isn’t doubled, let us take a look at why MMF should experience upside from this launch. DSF is a unique product that has the capability to generate returns for economic participants. If enough users believe that our team is able to maintain peg for the DSF token, enough users will correspondingly invest in the product. Our team has shown that we are able to maintain peg for extended periods of time (back on Cronos), even with a product that has not been as improved as it is today. Armed with new tools and knowledge, our team will be able to ensure that DSF will be a yield generation product that is to last.
Q: Is genesis farming done at the expense of polygon people?
A: No. Historically, genesis farming is done to gain userbase, where emissions are given out to would-be holders of a project. This is also called a “fair-launch”. Now, genesis farming tokens are allocated to Cronos holders who have been diamond holders of our ecosystem that took a bad hit from the nasty macro-economic conditions of the past few months. All who are holding, have not sold, and analysing the psychology behind the people who truly believe in the long-term viability of our project; they are unlikely to be dumping their tokens farmed during genesis. We are confident that most of these holders would re-allocate a larger portion of their genesis yields to participate in the economic processes of DSF. The contrary approach would be to allocate genesis farming to perhaps, USDC/BTC holders who are genuine mercenary farmers who undoubtedly would not hold. Thus, we believe the strategy of involving Cronos believers is a good one.
As previously mentioned, the team will set aside allocation of genesis farming for MSHARE and MTT holders, with close to 80% allocated purely for MSHARE and MTT holders. At the same time, there will be dedicated farms for MSHARE and MTT holders to farm SOLAR
Q: What is the utility of $DSF?
A: The $DSF token has utility within the economic processes within the ecosystem. We definitely will include the use of DSF for launchpad events. Beyond that, there are further planned utilities that will include our MMX product.
Q: Why are we releasing products so fast/why now?
A: As we mentioned before, our team had been building during the bear market of the past 1–2 months, and with majority of our items prepared, we are able to rapidly deploy. However, our true motivation is ensuring a booming ecosystem with huge utilities for each different token. Previously on Cronos chain, each development took significantly longer as most items were not prepared, thus resulting in a lower token price of 20 cents immediately after launchpad. Today, we are sitting at a floor of closer to 50 cents due to our rapid releases, and constant utility for the MMF token. That said, it’s not the be all end all, as we are constantly building new products to drive huge value back to token holders.
Q: Why are we forking SVN to improve liquidity situations instead of applying other methods?
A: The bigger question we throwback is, what method? At the end of it all, our team is not able to perform functions such as increasing MMF emissions further to reward token holders as that is just not sustainable. The only way to generate more yields to incentivise native MMF-USDC and MMF-MATIC holders is to do so via trading fees. At the same time, we also believe in building products to generate demand for the MMF token, hence price increase, is also an important way to reward native MMF token holders. There’s a lot we cannot do as a team to improve liquidity situations, more so than what we are able to do, and hence our team focuses on what we CAN do.
Q: Is there anything planned for pMMO?
A: Yes. In our new setup and tokenomics, we will be able to easily integrate DSF into the pMMO platform. pMMO will be able to easily accumulate performance fees that is not at the expense of MMF nor DSF. In this way it will organically grow the value of the pMMO token. Currently as it stands, the MMO token supply has only increased by 4% since our MMO launchpad a week ago. A total of close to 140k USD performance fees has already been collected for holders of MMO. This will grow exponentially when we lock in even more TVL. Currently, we do notice a bunch of users selling MMO tokens that they received through the launchpad at a loss. This models the behavior in our previous launchpad on Cronos, until a point where sufficient performance fees were collected for the MMO token that resulted in price increase. It resulted in a flywheel effect of increasing prices -> less emissions. This is what we seek to achieve for pMMO holders as well.
Q: Why are we providing so much MMF rewards to non LP holders? Isn’t that incentivizing non-mmf holders?
A: Everything needs to be in balance. We simply cannot increase more emissions for MMF token holders, because even at close to 3% APR daily, users are not providing liquidity. Any further increase will lower our TVL, and hence lower our capability to generate trading fees.
Q: Isn’t the democracy/voting a show only?
A: There are narratives being spilt around how our team has big bags of MMF to swing the vote in our favor. This statement is not true. If it were indeed the case, our team would need to participate in the buying of our tokens, close to 10 million tokens to swing the vote 50% in our favor. Even at a buy in price of $0.50, that represent 5 million USD worth that our team would need to have bought. If we did indeed do so, and you do not believe in the fairness of this democracy, you are free to use “our team” as exit liquidity.
On a gentler note, no. We believe in our project, but we have never tried to swing the vote in our favor. All votes thus far have been organic from members of our community who have believed in us all along. We deeply thank all of you for believing in us thus far, and we definitely seek to continue delivering for each and everyone of you Mad Kats.
Q: Why are you guys cash-grabbing?
A: Well, our team is not taking any allocations for the launch of DSF, so we are not quite sure what is meant by cash-grabbing. Truthfully, it would be a lot less work to try and convince users that building DSF has huge benefits. Wouldn’t a simpler cash-grab be to simply rest on our laurels and just generate fees and to call it a day? Our team builds hard and fast because we want to see our community win. We wish to build the biggest and most sustainable ecosystem, and that is what drives us.
While the majority have kept the discussions civil, a handful of you have resorted to gas-lighting our team and fellow community members. While it might be difficult to seem like it, our team values each and every community member. Sometimes, it is disappointing to see once-supportive members spin up anti-MM cliques, but it is something that happens plenty in this decentralised space where all our motives and identity are not privy to each other.
Even so, we tend to take things in our stride and shoulder on, and do our best to build a thriving ecosystem for all of you who still continue to stay on. This is our way of constantly re-iterating how we seek to constantly create “one MM”, a place for everyone.
We hope this piece sufficiently addresses your concerns. We are aware that current price action is choppy, but our team re-iterates our conviction in serving you as our community, and to build always. #MADFORLIFE
- Utan
Follow Mad Meerkat Finance
Twitter: https://twitter.com/MMFcrypto
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Website (Cronos): http://mm.finance/
Website (Polygon): https://polymm.finance/
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