COMPOSITE, ITS GOVERNANCE TOKEN AND ITS USAGE
With the establishment of a sizable ecosystem of assets and solutions, the Cosmos ecosystem has grown significantly during the past year. One of the main goals of Defi markets is to satisfy the desire for liquidity among assets and their owners. Although it has expanded, Defi has not yet fully emerged in the ecosystem. A fully collateralized, IBC-enabled stablecoin called Composite is designed to provide liquidity for Cosmos assets and power Defi on Cosmos.
So, In order to be a dependable characterization of purchasing power, Composite is a stablecoin that is soft pegged to $1 As the global macroeconomic landscape changes, however, this may change in the future.
The $CMST debt against over-collateralized CDPs can be created permissionlessly and was primarily influenced by the solid and trustworthy model created by MakerDao where explorers can create $CMST by locking up resources from the Cosmos ecosystem as collateral for $1 Now, talking about locking up, this is where $HARBOR comes in, To manage the protocol’s policies, $HARBOR will be used as the governance token. To preserve the peg of $CMST while consistently accruing interest APR from $CMST generation, the protocol governance will aim to do this. The system generates income from interest apr fees, CDP fees, and liquidation fees; any excess will be used to purchase and burn $HARBOR. There might be circumstances as well where The protocol mints $CMST to acquire and burn $HARBOR when $CMST trades above the peg for an extended period. And When also below the peg, the procedure also mints $HARBOR to buy and burn $CMST. By using this methodology, $HARBOR investors are certain to benefit from rising $CMST adoption while also absorbing volatility. The $HARBOR token may completely be used to match governance bonuses and pegging because it is constructed on the Comdex chain, which benefits from the security and architecture of the latter.
However, On-chain network gas fees and a percentage of protocol revenues that are used to purchase and burn $CMDX will allow it to gain value. Investors of $CMDX will also be able to create $CMST by collateralizing their holdings, and they will get rewards for supplying liquidity to dexes.
Let’s highlight briefly What takes place when markets for collateralized assets become erratic. Composite, which is based on the Comdex chain, could very well accommodate a variety of assets from the Cosmos ecosystem as collateral. Making use of IBC can guarantee that all system $CMST debt is backed by a variety of collateral assets, minimizing the effect of volatility in individual markets on the protocol debt as a whole. Placing debt restrictions on the amount of a specific collateral type is accepted and allows for the diversification of collateral assets. The debt cap guarantees that the harm from situations involving mass liquidations of a collateral asset can be kept to a minimum to safeguard protocol solvency.
Governance can be used as a component of extra solvency precautions to trigger an emergency shutdown to stop the minting of $CMST with a particular sort of collateral asset or a protocol-wide trigger to momentarily halt the minting to stop further damage.
Let’s now quickly go through the harbor protocol’s key features because they may be useful while navigating the Harbor Protocol
✓To Access the Harbor Protocol, just visit https://testnet.harborprotocol.one/
Open the Harbor platform and click “Connect
Once you've done so, you need to deposit IBC assets onto the platform.
On the "Assets" tab, merely click "Deposit" next to the desired asset.
Fill up the pop-up window with the amount.
The transaction will then be approved by the Kepler wallet.
✓How To Mint $CMST
Start minting $CMST by selecting "Mint" from the left sidebar or "Take me there" from the dashboard. Based on the stability fee, collateralization ratio, and minimum loan amount, choose the Vault.
✓To borrow $CMST, enter the desired amount in the deposit area, choose the Collateralization percentage, and then click "Mint."
You’ll receive a pop-up request from your Keplr wallet asking you to confirm the transaction.
You can then modify your open positions and edit features like "Deposit," "Withdraw," "Draw," and "Repay" in the "Edit" section of the "Mint" page. You can also change the "Collateralization Ratio."
The last step is to close the debt. When you're ready to close the entire balance, click "Close" on the "Mint" tab's "Close" section. To confirm the transaction, a pop-up window will appear in your Keplr wallet.
In conclusion, As the liquidity for these assets continues to develop, Comdex also plans to collaborate closely with the current Defi protocols to integrate yield-bearing derivatives as collateral. To constantly broaden the collateral basis that supports $CMST to shield it from market volatility is a key goal of increasing this approach.
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