Introducing Standard Protocol
Synthetic Difficulties
Despite their promise, synthetic cryptocurrency stablecoins are struggling to overtake their collateralized rivals. Problems concerning price and supply instability, oracle data centralization and as a result general usability have hampered the adoption of these currencies.
This has resulted in a lack of innovation, impacting the end-user and wider ecosystem.
Uncollateralized Stablecoins
Uncollateralized algorithmic stablecoins have a supply that can expand and contract depending on the price at predetermined intervals.
As the supply changes, the token price can come away from the peg. Incentives are distributed (often through minting or burning supply) to encourage buying or selling pressure, and therefore move the price up or down. This results in a non-collateralized, stable asset.
The problem with this approach is that the elastic-supply mechanics are difficult to control (see protracted negative rebase spirals as an example). The price of such stablecoins lacks stability, which creates a number of challenges for an asset that is meant to be ‘stable’.
To compound the problem, oracles used in fetching critical stablecoin price data are often centralized — creating a potential protocol failure point. So what can be done, if anything, to solve the synthetic stablecoin dilemma?
The New Standard
Enter a new era of collateralized, rebasable stablecoins. Combining the best attributes of stablecoins like DAI with the elastic supply of AMPL, Standard Protocol creates both stability and flexibility for its synthetic stablecoin.
Standard Protocol is the first Collateralized Rebasable Stablecoin (CRS) protocol for synthetic assets that will operate within the Polkadot ecosystem. It is also the first and only project from Korea to be awarded a Polkadot Web3 foundation grant.
Fair Oracle Rewards and Native AMM
Fair block reward architecture for oracles (with an 8:2 ratio between validators and providers) eloquently rewards providers and solves the challenges of decentralized data sources for synthetic assets.
Automated market makers (AMMs) play a critical role in creating essential arbitrage opportunities through liquidated collateral pools, fuelling the Standard Protocol ecosystem.
Meet Meter, Liter and Standard
To achieve their goal, Standard Protocol is introducing a unique and novel 3-token system.
Meter (MTR) is the native synthetic stablecoin generated by the protocol’s standard system. Holders are able to use MTR as a medium of exchange, farm tokens, as well as buy bonds.
Liter (LTR) acts as a liquidity provider token and represents a share from the AMM platform. Playing a similar role to LP tokens in Uniswap, LTR can be burned in the AMM to receive deposited assets. Liter can also be used for yield farming.
Last but by no means least, Standard (STD) is the network and governance token for the Standard Protocol. STD holders can stake their tokens in order to receive block rewards and participate in governance votes. STND is also used to settle transaction fees.
Rebase Mechanics — Simplified
Standard achieves automatic, stable rebasing by utilizing collateral from an algorithmic reserve bank. The total supply of the stablecoin (Meter) and the amount that is available for issue is adjusted to peg MTR to the value of USD through this system.
Leverage and Liquidated Assets
Standard Protocol enables the leveraged trading of any virtual stocks and commodities, all whilst being backed by synthetic assets minted through decentralized oracle data.
Users have the opportunity to buy discounted assets through the custom leveraging of AMM architecture instead of an auction.
Standard Protocol Tokenomics $STND
Token Emissions
Funding: 21.3%
- Seed round: 5%
- Strategic partners: 5%
- Private round: 10%
- Public IDO: 1.3%
Ecosystem Partners and Advisors: 3%
Team: 10%
Marketing and Ecosystem: 4.7%
Community Incentives: 6%
Foundation: 15%
Yield Farming, Staking Distribution: 30%
Protocol Developers: 10%
Public IDO Details
Round 1 submissions: 23 April, 1200 UTC
Round 2 submission: 24 April, 1200 UTC
IDO date: 29 April
IDO Platform: Polkstarter
Website: https://standard.tech/
Twitter: https://twitter.com/standarddefi
Telegram ANN: https://t.me/standardprotocol
Telegram: https://t.me/standard_protocol
The article above does not represent financial, investment or trading advice and we do not recommend the purchase of any cryptocurrency or product without consulting financial aid. The author strongly encourages you to do your own research before making any investment decisions.
