Content
DeFi has locked up assets of nearly 8 billion U.S. dollars. Compared with the 1 billion U.S. dollars at the beginning of this year, DeFi has achieved rapid development.
(The total assets locked by DeFi is about $80, DEFIPULSE)
However, the main battlefield of DeFi today is still the Ethereum public chain. Two problems arise here:
Ethereum is too congested, resulting in high fees and slow speed, and some public chain roads are too spacious and underutilized.
Non-Ethereum assets are not easy to participate in DeFi.
In order to solve these two problems, more and more public chains have begun to build their own DeFi ecology, and cross-chain technology is also constantly developing. More and more public chains are developing in the direction of Ethereum side chains. In the current state, is there a suitable plan to accelerate the development of DeFi to achieve greater asset liquidity and increase asset utilization? RAMP's cross-chain DeFi, because DeFi mainly takes place on Ethereum, it will take some twists and turns for some assets outside of the Ethereum ecosystem to participate. If users still want to maintain exposure to their original assets, it is not easy to step into Ethereum and participate in DeFi activities, such as lending and liquidity mining. At present, there are some tokenized BTC circulating on Ethereum, with an asset scale of US$860 million. This is a preliminary cross-chain DeFi attempt. But at present, except for Bitcoin, there is very little circulation of assets in other chains on Ethereum, and there are very few Ethereum assets in circulation on other chains. How to change this situation? In addition, if the assets of different chains are in the state of pledge, will it still have the opportunity to participate in the DeFi activities of other chains? As far as the current situation is concerned, there is no clear solution practice in the market. How to change this situation? RAMP proposes a solution that allows users to maintain their current positions and maintain the current portfolio of pledged assets without having to convert to ERC20 stablecoins to participate in cross-chain DeFi activities. In short, RAMP focuses on cross-chain DeFi, which attempts to unlock the liquidity of pledged assets outside of Ethereum. RAMP's rUSD and eUSD are on RAMP. It has two tokenized USD, one is rUSD and the other is eUSD. Through these two stable coins, it can realize the circulation of assets between Ethereum and other chains. rUSD and eUSD are the core circulation media for RAMP to realize its cross-chain DeFi. They are the basis for understanding RAMP's cross-chain DeFi solution.
What is rUSD and eUSD
Users pledge their non-Ethereum assets to generate stable currency rUSD, which is issued on the Ethereum chain through the gateway bridge. If users use ERC20 stablecoins for pledge, stablecoin eUSD can be generated. eUSD has a storage pool. Depositing ERC20 stablecoins (USDT, USDC, DAI, TUSD, etc.) into the pool can generate eUSD, which is similar to mStable's aggregate stablecoin model. With rUSD and eUSD, holders can freely trade rUSD and eUSD, because both are stable coins issued on Ethereum. Therefore, by collateralizing assets of different chains, users have obtained a seamless liquidity transfer channel. Specifically, holders of rUSD can unlock the liquidity of pledged assets on the non-Ethereum chain, and get the opportunity to participate in the DeFi activities on the Ethereum chain, such as borrowing on Aave, trading on Sushiswap, etc., which is very important One point is that users do not need to convert their non-Ethereum chain assets into ERC20 stablecoins, can maintain their original asset exposure, and do not need to inject more funds, which can improve the efficiency of their existing funds and obtain more income. The income here is not only the income of participating in DeFi activities, but also the RAMP token income of liquid mining. That is, the pledged assets on the non-Ethereum chain are used as collateral to generate rUSD, and at the same time, RAMP liquidity mining can be performed. For eUSD holders, by depositing their ERC20 stablecoins in RAMP to generate eUSD, they can obtain interest income on loans and obtain optimized mining income from various income pools.
The mortgage mechanism design of rUSD and eUSD
rUSD and eUSD are the foundation of RAMP's cross-chain DeFi building. Specifically, how is it designed for mortgage and liquidity? Simply put, its mortgage mechanism has some similarities with Maker, and it also has the concepts of mortgage rate and liquidation rate. The mortgage rate is used to ensure the repayment of rUSD and eUSD. In the design of RAMP, its minimum mortgage rate defaults to 200%. This means that in order to obtain $1,000 of rUSD, at least $2,000 of assets must be pledged. For the sake of safety, users can use a higher mortgage rate, such as a 400% mortgage rate, which means that users need to mortgage $4,000 in assets if they want to generate 1,000 USD of rUSD. In addition to the mortgage rate, there is also a liquidation rate. Once the mortgaged assets reach the 120% liquidation rate threshold, liquidation will be triggered. When the mortgage rate is lower than 200%, the user will receive a notification asking them to add mortgage assets, which reminds the user to deposit more assets into the pledge contract of the chain, and generate more packaging assets so that the user can mortgage them The rate remains above 200%. If an extreme situation occurs and liquidation is triggered, the RAMP system will liquidate through rPool, sell the assets pledged by users on the open market, and then exchange out the corresponding rUSD, return the rUSD debt and destroy it. At the same time, if there is a difference in value between the liquidated assets and the rUSD repurchase, the excess value will be distributed to the holders of RAMP tokens and distributed according to the weekly cycle. This is where the value of RAMP is captured. The mortgage rate and liquidation rate on RAMP have a dynamically changing design. RAMP introduces the mechanism of CMS and Gaussian curve. CMS stands for "Mortgage Asset Management Score". CMS depends on the specific conditions of different chains and has nothing to do with individual users. The default CMS of each RAMP-integrated blockchain is 0. The increase or decrease of CMS will affect its minimum mortgage rate and liquidation rate. So how to determine whether the CMS of different chain assets is increasing or decreasing?
(The relationship between the increase and decrease of CMS and RAMP mortgage rate and liquidation rate, RAMP white paper)
RAMP adopts the Gaussian normal distribution curve method. If the total liquidation value of its assets is equal to or less than 0.3% of the total locked assets, then CMS increases by 1, In this way, the asset can have a lower mortgage rate and liquidation rate. If the total value of its liquidated assets exceeds 0.3% of the total locked assets, then its CMS will be reduced by 1, and its mortgage rate and liquidation rate will increase accordingly.
Compared to other cross-chain DeFi mechanisms, what is the difference between RAMP
(The similarities and differences between RAMP and other cross-chain stablecoins, RAMP white paper)
First of all, RAMP does not have a starting point for building a universal stablecoin. In other words, eUSD and rUSD do not try to be the unit of valuation, which is different from the starting point of DAI. Universal stablecoins are the holy grail in the field of encryption. The competition in this field is very fierce. There are both legal currency-backed stablecoins, such as USDT, USDC, etc., as well as cryptocurrency-backed stablecoins such as DAI. These stable coins have been cultivated for many years, have a certain user base, are supported by usage scenarios, and have a high threshold. RAMP's stable currency positions itself as a "bridge of value stable currency" and serves more specific scenarios. This scenario is mainly to help people who are currently locked in pledge assets have the opportunity to borrow liquid assets, and for users with liquid assets, they can also lend their assets to pledge assets that have a stable basic value guarantee.