Mercurial Finance — Telegram AMA — May 23
On Sunday, May 23, we had the pleasure to welcome to our Telegram chat:
Ming, CEO & Co-Founder.
We asked him questions about the development of Mercurial Finance.
Some sentences have been slightly edited for readability but the meaning has been conserved.
Mercurial Finance is a protocol for issuing synthetic asset types on the Solana Blockchain.
Mercurial is building DeFi’s first dynamic vaults for stable assets, providing the technical tools for users to easily deposit and mint stable assets, generating liquidity for their own requirements or offering them to ecosystem participants with such demands.
Mercurial vaults are market-making vaults providing low slippage swaps for stables, while also improving LP profits with dynamic fees and flexible capital allocation.
To optimize performance, assets will be dynamically used to facilitate a wide range of use cases, lending, flash loans, and external third-party decentralized protocols. Key transactions like withdrawing and swapping in the same transaction are made possible thanks to the strong performance capabilities of Solana.
Q — Ayeley from GAINS: What did you do before crypto and did you have any other previous venture in crypto?
A — Ming from Mercurial Finance: I have been in crypto for several years now. I have been a strategic adviser to projects like Blockfolio, Instadapp, and Kyber. I’ve also been on the founding team of Handshake and WBTC. Before crypto, I was running product and growth with several silicon valley companies.
My founder, Siong, was the founding engineer at Envoy, one of the top valley companies, funded by a16z, etc.
About Mercurial Finance
Q — Ayeley from GAINS: How did your previous roles with these crypto companies prepare you for Mercurial Finance? And what is Mercurial Finance about in a few simple sentences?
A — Ming from Mercurial Finance: I think I am very comfortable with crypto positioning, ecosystem growth, and DeFi execution, having been involved at the executing a strategic level across these projects
So, for Mercurial, we are building out infrastructure for stable assets on Solana, allowing users to easily swap, deposit, and mint stable assets. Our first focus will be dynamic vaults for stables, where we combine a low slippage stable swap with dynamic fees and dynamic vaults.
Q — Ayeley from GAINS: What advantage does building on Solana give to Mercurial Finance as compared to competitors who build on other chains?
A — Ming from Mercurial Finance: I would say Solana is its own ecosystem, so really more concerned about building out the system on Solana, vs worrying about competitors on other chains. But from a Solana point of view, I think there will be many competitors who will be working on stables.
Building on Solana allows DeFi magic like withdrawing + swap in the same transaction and hyper-low gas fees for complex financial operations.
A lot of the things we want to do, like running complex on-chain algorithms for executing complex transactions would be prohibitively expensive on Ethereum and completely impractical. Due to Solana’s 65,000 TPS and sub-second finality, Mercurial’s vaults will be able to execute this order of transactions instantaneously at very little cost to the protocol.
Q — Twitter user @AugustK95: I have read about many DeFi projects that are creating different types of vaults with great security, but it captivated my attention that Mercurial vaults are “dynamic”. Could you explain to us what is the “dynamism” that Mercurial vaults count?
A — Ming from Mercurial Finance: Yeh, unlike systems with static fees and capital allocations, we implement dynamic fees and vaults to greatly improve the profit potential for users.
- Dynamic Vaults: Instead of allowing pooled assets to sit idle in liquidity pools, we plan to enable the deployment of pooled assets to yield generating opportunities across the Solana ecosystem.
- Dynamic Fees: increase fees when market volatility is high to compensate LPs, while decreasing fees when market volatility is low to encourage trading Compared to static systems, our dynamic market-making vaults aim to drive win/win solutions that are net good for the whole ecosystem.
Q — Twitter user @DERRYN82: What reason made you apply complex fee measurements (EMA and SMA). When and where will this apply?
A — Ming from Mercurial Finance: We use Exponential Moving Average (EMA) because it is quicker to react to volume changes than SMA (Simple Moving Average), and also easier to program than other more complex options. We have all the details in the litepaper here.
We use the ratio of two windows because it is a familiar trend-following indicator. EMA is used because it is quick to react to new events, and it is easy to implement EMA for save-gas smart contract
Q — Telegram user Keymer: Could you explain why you allocate the Mercurial vaults to only stable currencies? Could it be that if they implement any other type of tokens or currencies, they will not be able to use all the technical tools that Mercurial offers?
A — Ming from Mercurial Finance: See this tweet. We think that stablecoins are an extremely important and crucial part of DeFi, especially in this bear market. We can expand next time, but for now, we are going to focus on stables
Q — Ayeley from GAINS: What is the token use case and how does it capture the value of the ecosystem you are building?
A — Ming from Mercurial Finance: Mercurial Protocol is designed to have a wide range of mechanisms for accruing value to MER holders. Fees from swap Commission from yield farms Collateral for synthetic stables
These are very complementary to the system we are building for Mercurial and integral for the DAO as well.
Q — Telegram user Dies Lienas: For what purpose did you mint 1B MER token (total supply) which will be distributed for the next few years
A — Ming from Mercurial Finance: Mostly for liquidity mining and ecosystem partners to grow the mercurial community, developers, and support!
Q — Twitter user @antonio50221026: The project will collaborate with Kyber Network in technical research, development, and marketing, but what benefits or utility does this collaboration bring to the Mercurial Finance ecosystem?
A — Ming from Mercurial Finance: We will collaborate on technical research, marketing and adoption. For example, in bringing more users from ETH to SOL. The last one is really the most important element
We think there is the potential of really drawing a lot of new users from Ethereum to Solana.
Q — Ayeley from GAINS: You recently completed an IDO. How have you handled the funds raised so far? Are you planning to do any future raises?
A — Ming from Mercurial Finance: We have hired 5 amazing team members. 2 are top Solana experts. 1 is an engineer from Binance, and the other was the first few designers at Grab, so we are very very well positioned to build through this market!
Q — Ayeley from GAINS: What stage is the project at? And what should we look forward to in the coming months?
A — Ming from Mercurial Finance: We are rolling out the devnet next week. The first product will be Solana’s first multi-token vault. The mainnet will be in June!
Q — Telegram user Callista Ella: How do you respond to the current market which is falling? And what do you do if there are no changes in the market?
A — Ming from Mercurial Finance: We are 100% committed to pushing and building through this market. we are sufficiently funded, with a great team and amazing supporters
We will keep building and helping the Solana ecosystem thrive together 🙂
Ming, thanks for coming in. It was a pleasure having you in our group today, and taking the time to answer all our questions. Anything else you’d like to say? Where can we follow you to stay updated? — Ayeley Commodore-Mensah from GAINS Associates
Follow us on Twitter and join our community on Discord. We will be launching in June, where you can provide liquidity and earn sweet rewards. I look forward to seeing everyone then~~! — Ming from Mercurial Finance
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