Mm Finance — The road ahead
Addressing community concerns, and ecosystem fine-tuning
Hi Burrow. As many of you know, we are in the midst of our core development sprints. Normally, our rule is for the core team to remain uninterrupted until core sprints are completed because that is how work is exponentially done in the same amount of time- Locked in, fully focused uninterrupted momentum. That being said, we have decided to make an exception this time round in light of a surprisingly high level reddit thread discussion that we thoroughly enjoy. Plenty of useful discussions and concerns were conducted that we are more than happy to share our input. This will be done through this medium. At the same time, we will provide you with some teasers to boost your confidence in our ecosystem despite the recent lackluster equity and crypto markets that are now invariably linked in macro (and price) trends.
A particular discussion on Reddit caught our eye — for good reasons. Here’s the link to the subreddit:
This community piece/critique/discussion is truly a masterclass in what our team has believed in all along — the power of the educated masses, bringing forth fruitful discussions, the pinnacle of what DeFi should stand for, and us devs are but simply a vessel to execute the knowledge of the common masses. There has never been a more bullish discussion since the inception of MM Finance — simply the sheer number of Anons providing an opinion of their own, in a great show of faith to how our team can and will deliver for the betterment of the ecosystem. Faith + Wisdom, simply a sign that the community has grown to believe in the movement that MM Finance stands for, and also the care for the project that it’s not simply one to come and leave. This is something our team deeply appreciates, and which is also why we place such gargantuan efforts in our daily endeavours to constantly build MM Finance to greater heights.
Now, let us address some of these concerns in turn, and we’ll circle to some of the changes we will implement.
On the note regarding derivatives, and token prices etc. It is important to appreciate that MM Finance is not “a token”, “a token” does not define us, for what we are truly intending to build is an ecosystem. This would mean a series of derivatives and products that work hand in hand to provide utilities beyond the common rabble. At the back of a series of large developments like; AMM/DEX, Interest-Bearing Money Market, Yield Optimizer, Algo-Pegged Tokens, NFTs, Web3 Social Media, Stableswap, Stablecoin — the list goes on. You might think to yourselves: I think the team is done with their roadmap. But frankly, this represents less than half of what we have envisioned for what a true MM ecosystem would look like. Our team has barely begun — there are a handful of other financial derivatives/products our team has planned and would require your continued faith to execute.
Let us drop a little teaser to wet your appetites, think: Options markets, Synthetics, Tranche funds, High yielding stablecoin staking (>60% APR). Most of these projects have been planned with a unique twist to provide demand for $MMF and its constituent ecosystem tokens. To state that you’re still early into MM Finance is but an understatement.
It is a fact that our team has top-notch financial talents that have access to a wealth of experience and knowledge to how derivatives, micro/macro-economics work. It just so happens that these talents are equally versed in the realms of solidity development, which is also unfortunately why during development crunch periods that the team is unable to fully communicate some of the intricacies that has been rightfully pointed out by the mentioned reddit post. The team has been aware of the intricacies all along — of the need for token utilities, and which is also why there are certain assets linked in certain manners. That said, our team concedes a weakness, one where we recognise a need for stronger communication even during development crunch times, particularly as we are building on the bleeding edge where patience runs thin quick. We humbly accept the lesson, and look forward to our next communication with you lovely folks.
Regarding shorters, and market shorting, our team has made observations about such. Our team has done some on-chain analysis due to the recent overwhelming claims about “shorting”, and how shorters are harming our token prices. The reality on our findings is that most MMF and SVN token borrowers have been simply performing yield farming with the borrowed tokens, occasionally using said tokens for participating in launchpads where there is huge upside. As it stands, there’s close to 4mil MMF tokens and 4mil SVN tokens out on money markets. In the current scenario where less than half of these tokens are used to “short”, these do not cause a price crash, as these merely have a ~2–3% price impact only. The reality is that users keep trying to find reasons for why prices are dropping, and the “shorting” narrative has latched on in the stickiest and easiest way to explain why prices are dropping. This has eventually devolved into full-blown FUD.
But we wish to provide some much needed perspective on this entire situation, that the shorting narrative has been hugely blown out of proportion. To relook this perspective, it makes sense for someone to perform yield farming with borrowed tokens in a down-trending market, simply because capital is not at risk from the act of borrowing as the LTV ratio gets higher overtime. Sometimes, this can be constituted as a “shorting” position without the actual act of selling the borrowed token. This is currently the situation, and it is likely that the shorting narrative has been misconstrued out of this casual observation. From our team’s point of view, we cannot prevent other projects from providing supply and lending markets for our tokens, simply because there’s no way to do so. It is also not a “simple flip of the switch” for us to activate these features, as it is in the nature of DeFi for someone to build on our protocol. The tokens we have launched, and the protocols we have launched are open in nature, and anyone can build on it.
A big part of this FUD also stems from significant whale movements in the price actions of the previous week. Like any other up and coming project, the fact is that whales will always command influence in price action because any significant selling on their end can create a cascade of selling especially when the macro environment is poor and people need confirmed causes for the redness when there is no way of confirming.
That being said, our team is not at all concerned of these whales thrashing about our pristine waters at this point of time for a couple of reasons.
Firstly, such whale action is not new to us. Over the years, we have seen such behaviours exhibited in numerous DeFi projects, many have succumbed and few survived. The common thread between all those that survived is the fact that these teams are not building for money. Teams that make it past this point more often than not, are teams that have a vision to create something bigger than the individual parts of the project. Here at MM, we’re not building a project. By now, if you haven’t realised, we are building out an ecosystem for all individuals regardless of crypto expertise, such that there is something for anyone and everyone. That has always been our Mad vision since day one and that will never change.
Secondly, think about the chain we are on, Cronos. No one in this world is irreplaceable. When one whale leaves, another can come in. The fact is that CDC/Cronos on its own is positioned to be the next up and coming chain in all of crypto. Look around the real world. Everywhere you turn, you see the CDC logo in almost all places with high touchpoints eg F1. $CRO is unique because it is EVM compatible and it is the only crypto ecosystem trying to bridge the gap between the web 2.0 and web 3.0. As more users enter $CRO, my question to you is, who are they going to see when they explore Cronos? Here’s a clue, the first alphabet of the answer is “M”.
Thirdly, once these whales have panic sold and are replaced by new users in the longer term horizon, our ecosystem should have stabilised, price-wise. No one doubts our track record so my follow up question is, where will those previous whales go after they supposedly panic sold? Perhaps the answer to this question is similar to the answer above.
All these, alongside constant development that are all in progress despite the downturn. Our team has made it clear time and time again but let’s do it once more. We’re not normal. We’re all Mad.
The launch of Hakuna Matata is important in the meantime to provide some capital injection, while providing some much needed burns to take SVN out of circulation. The purpose of such a launch is many folds, allowing our team time to prepare for the future utilities of SVN, which we will share below. In our telegram conversations (unofficial AMAs) with our community, we have described the larger differences between Hakuna Matata, and typical algo-pegged tokens. The most important aspect is that our team has carefully balanced the mathematical aspects of Hakuna Matata emissions to ensure a sustainable buy pressure on SVN, while ensuring Hakuna Matata itself does not go out of peg.
Planned changes for the rosy future
For the sake of a rosy future, it is important to make core tweaks to rebalance ecosystem health. The fact that MM Finance is an ecosystem, and not “a token”, makes it more challenging to perform tweaks, but at the same time, it gives us the flexibility to make more sensible cross-system changes for more lasting impact. Without further ado, here are the key changes:
- Removal of MMG to be replaced with SVN token (often termed as the people’s key token in our ecosystem). The suggestion and debates surrounding this suggestion within the subreddit is a sensible one. Pros and cons of such a move have been carefully discussed, and our team concurs that such a move outweighs the possible cons. Moving forward, our team will build our GameFi product, the MM Arena to adopt the use of SVN token. A token that already has huge financial value, will now have a much needed burning utility. As we have mentioned before, the in-game token (now SVN token) will experience huge burns simply because that’s how the token was built to be in the first place, where it has to be burnt to level up and procure equipments for the gaming characters.
- METF will focus on acquiring liquidities paired to SVN. METF-SVN LPs will allow MMF tokens to be freed up to alleviate the current lack of MMF tokens. At the same time, this will promote more utilities for the SVN token. That said, when the AUM is also eventually being activated for METF buybacks and burns, it will result in way lower price impact for SVN, which is desirable. This switch will also allow for a better price action of the METF token which is currently a concern of METF holders.
- Our team will review the MShare situation, and if deemed necessary, a proposal for emissions calibration will be put in motion
- Our team is now working on new strategies for MMF.money platform. These will provide strategies of varying risk levels to different users. With low-risk high yielding strategies, we anticipate demand for MUSD to pick up. This will generate huge fees and revenues to be pumped back into $MMF and $BURROW in the form of buybacks.
- Our team is working on a fractional algorithmic aspect for our MUSD token that requires $MUSD and $MMF as collateral. As we have seen in the case of Luna and other L1 tokens, this creates a flywheel effect for the price of the L1 token. Before that happens, we are also deepening MUSD liquidity pools to account for large MUSD trades in the near future.
- Lastly, keep them sensible suggestions streaming in. Our team loves reading thoughtful pieces that expound on the pros and cons. Who knows your suggestion will be the very next catalyst our ecosystem needs to be propelled to the next level!
A final note
In the midst of an uncertain market outlook, we need to look forward to certainties. These certainties include facts and situations we know, and have control over. We do not have control over the macro rotation of funds as team members of the project. What we do have control over, is the tempo, and the ability to build tools that trap and capture value in a jungle of financial tools and derivatives. Many chains come and go, but our team firmly believes in the unique proposition that the Cronos chain brings. The Cronos chain is simply short of a couple of major bullish developments before it hits terminal velocity. THAT is when all MM Finance users will experience the largest upside, having invested in the largest DeFi ecosystem on Cronos. We have no control over macro factors but we have control over our Madness. We as a team not only believe in Cronos being the top chain in crypto but also in our abilities to be at the forefront of Cro’s success. Times are tough now but it’s not an adventure if there are only highs. We’ll take the blows one at a time, prevail and reap the fruits of the Madness in due time. LFGM. #MAD4LIFE