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Mercurial Finance — Maximizing Utility & Yield of Stable Assets on Solana

Image by Gerd Altmann from Pixabay

Mercurial is building new liquidity systems to maximise the utility and yield of stable assets on Solana. As the DeFi ecosystem on Solana grows, there will be many different variants of collateralized, wrapped, and synthetic assets in the space. Mercurial’s most immediate objective is to provide the best liquidity for all the major stable and pegged assets on Solana, which they started with their Mainnet beta.

Mercurial focus will be on stable coins as they see it representing a major part of the DeFi demand across synthetic assets creation, swapping, and lending. Robust availability of stablecoin liquidity is crucial to any DeFi ecosystem.

Moving on, Mercurial is focused on building dynamic vaults, which are market making vaults providing low slippage swaps for stables, while also improving LP profits with dynamic fees and flexible capital allocation.

Here are a few innovations Mercurial is bringing to Solana:

Dynamic Vault
Dynamic Market Making Vaults To Maximize Capital Utilization

Swap Pools
Low slippage swaps with Solana’s first multi-token swap pools for pegged and depegged stables

Institutional Vaults
Generate guaranteed yields by dynamically lending out liquidity to Institutional partners for Market Making

DYNAMIC VAULTS

Mercurial is building dynamic vaults, which are market making vaults providing low slippage swaps for stables, while also improving LP profits with dynamic fees and flexible capital allocation.

Dynamic vaults will have the following key features:

  • Low slippage swaps for stable pairs and forex pairs
  • Dynamic fees that leverage market conditions to improve LP profits
  • Flexible allocation to external platforms like lending protocols to earn additional interest and yield

By fully leveraging the power of Solana, Mercurial aims to build the next generation of market-making systems. We introduce two major innovations to the usual AMM model — dynamic vaults and dynamic fees.

  • Dynamic Vaults: Instead of having pooled assets to sit idle in liquidity pools, we will eventually enable the deployment of pooled assets to yield generating opportunities across the Solana ecosystem. No longer will LPs have to choose between earning fees or yields from other farms — with Mercurial, both can be done at the same time.
  • Dynamic fees improves profit potential of LPs while also compensating them for the IL risk in volatile environments. This protects LPs which encourages more participation from them, this leads to lower slippage and therefore increased trading volume which in turn results in more fees in aggregate for the system.

Design

Mercurial is building dynamic vaults that aim to improve the profit potential of swaps and deposited capital. Each vault will have several key components. The vault itself, which acts as the automated market maker for swaps, the yield programs which run the strategy for the vault, as well as the dynamic fee and DAO programs, which will coordinate between all the various vaults.
The key design principles of vaults include:

  1. Composability: Ability to collaborate with other projects for benefits to user
  2. Liquidity: Providing a high level of liquidity accessible for both swaps and deployment
  3. Secure: Keeping capital secure, while catering to various risk profiles
Key Aspects In A Mercurial Vault

You can read more about dynamic vaults here.

TOKENOMICS

Token Distribution
1 Billion MER tokens will be minted and distributed over the next few years.

$MER Token Distribution

INVESTORS

Mercurial Finance Investors 1
Mercurial Finance Investors 2

Alameda Research
Sino Capital
Defi Alliance
Rok Capital
Genblock
Defiance
OKEx
Houbi
Solana Foundation
Solar Eco Fund
Bonfida Ventures Ltd
GBV Capital
imToken Ventures Ltd
Stacked
Raydium
Delphi Digital
Gecko Ventures Pte. Ltd
Parrot
Gate.io
Coin98
Kyros Ventures
Nansen
Unagii
Fantom
Petrock Capital Ltd
Incuba Alpha Labs LP
Signum Capital
Hyper Chain

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