Add USDK Support Proposal

Details

  1. Add USDK on DMM protocol;

  2. Support mUSDK on DMM protocol.

We propose that the stablecoin USDK should be added to the DMM protocol with a debt ceiling of $xxxx. USDK is a stablecoin issued by PrimeTrust and OKLink. Prime Trust is a technology-driven and regulated United States trust company. OKLink Fintech Limited is a wholly owned subsidiary of OKG Technology Holdings Limited (HKEX: 1499).

With the ability to easily scale USDK up, USDK holders would be able to earn a stable 6.25% APY on their USD. Currently users can easily get USDK on exchanges like OKEx. This will also provide liquidity so the DMM DAO can onboard the next revenue-generating real world asset - two private PC-12 planes.

The passing of this proposal will create the mUSDK token. All necessary logic to trustlessly create the token will automatically execute if this proposal passes. Our plan is to create the proposal to be voted on next week.

We would like to ask the community what we should initialize the debt ceiling to be? Our initial thoughts are between $1mm and $8mm USD. We would like to hone in on the precise number.

7 Likes

For informational purposes, I think it would be helpful if you provide some details on what the pros and cons would be for the debt ceiling limits.

On its face, your average person would probably say more is better.

By putting out greater information on why you think $X would be in any way better than $Y, it would help with the discussion.

3 Likes

$8mm USD is good for me

1 Like

I think 8mm USD is good. We hamstrung ourselves by putting the limit of mEth at 5mm (we’ve been at that ceiling for a while).

Thanks!

1 Like

8 million it is! More liquidity and more interest generating mUSDK. I’m all for it!

Thanks.

1 Like

I like the idea of opting for the PC-12 planes as assets. It’s renowned for its outstanding performance as outlined in this detailed article regarding the plane. I am for making the debt ceiling $8mm.

1 Like

I like the proposal. If the Okex feel they can fill most of the 8m then good.

8m sounds good to me, same as USDT

First - thank you for considering feedback!

I’d recommend going $8M. More liquidity is better for both okex and dmm. Additionally, since we are talking about a stable coin, the risk of price fluctuations is mitigated.

I think the maximum amount possible would be ideal … $8m. Better to have a surplus than deficit in the event of favorable demand

8 million should do it!!!

Count me in for $8M.

I agree with @nightbringer 's feedback to provide more info regarding limitations of debt ceilings. I guess higher ceiling on a certain coin would mean lesser potential ceiling for the current/future supposed mToken, is this right? If yes, are there other coins in consideration besides USDK?

But sticking to the original question regardless, pretty sure review has been done in order to provide that $1 - $8mm range so I go for all Max $8mm :grinning:

1 Like

OKEx is a popular exchange and USDK will be a great addition to the platform. I support the $8 million debt ceiling.

I would support the higher ceiling of $8 million for USDK

Maybe starting with a lower debt ceilig which can be gradually increased over time with rising organic demand would be the better approach.

By doing so, we are creating a scarcity to mUSDK that in turn will create a sense of urgency for anyone interested in minting mUSDK.
Would you feel pressed for time and inclined to mint tokens if you saw that there are 7.9 million tokens left to be minted or would you rather jump at an opportunity if there are only 900.000 tokens left?

1 Like

I’m somewhat partial towards @DMG_Agent idea.

Starting with a lower debt ceiling has several advantages and if we could somehow include a clause that automatically raises that ceiling once we hit certain thresholds, we wouldn’t have to revisit this in the immediate future.

For example, if we were to start with a $1M or $2M debt ceiling and, once we hit 90% (or some other number) over a certain time frame (remains at or above 90% for X-number of days or weeks), then there is an automatic increase by another $1M, to a maximum of $8M (or whatever number we want to see).

That way we could create the feeling of scarcity while actually allowing controlled growth over time to accommodate additional investments, while also limiting the risks associated with having too large of a debt ceiling. Otherwise, why stop at an arbitrary $8M?

Now, if the above is a technical problem, well, then, we need to fix that problem, because a system that cannot be automated is a broken system.

3 Likes

I’m leaning towards the 8 million ceiling for two reasons:

  1. We reached the cap on the existing mTokens pretty quick
  2. Adding a high ceiling for a stable coin is fairly low risk.
1 Like

While I agree with point number 2, I have to disagree with point number 1.

If we look at the active supply vs total supply of the stable tokens that have been onboarded, we’re not even close to reaching the cap on the stable coins:

mETH 4956.64/5000 (99.1%) ($2,151,925.26)
mDAI 201,808/3,500,000 (5.7%) ($201,808)
mUSDC 1,044,506/3,500,000 (29.8%) ($1,044,506)
mUSDT 0/8,000,000 (0%) ($1,750,780)

Which makes sense - why would someone realistically want to use a stable coin for a steady 6.25% return? Stable coins are used for making trades and conversions against the volatile coins - not for sitting in a money market account. I wouldn’t do that, would you?

I use my stable coins to safely and quickly exit a coin and then get back into a coin. I’d much rather be putting my volatile coins into the DMM - that way I am earning 6.25% while holding onto a coin that is going to see (hopefully) major growth.

And that also gives me a hedge against that coin’s volatility (even if it goes down some, I’m still earning a return). And if it has a major spike, I don’t just have to sell off my coins in order to have some scratch to spend on the side… If ETH goes to $5,000 a coin and I have 100 coins tied up in DMM, I don’t just have to sell off those tokens to earn money… I can sell off a few coins for some immediate spending money (say I want to buy a boat or some such), but now I’m earning enough money off of my investment ($31,250) that I’m not so eager to just sell everything.

Looking at the current tokens and utilization, the only way to really increase the overall value of our mTokens ecosystem is to increase the cap of and onboard additional volatile tokens. Specifically, we need to be able to mint the top coins as mTokens - BTC, XRP, LTC, etc. That gives us access to a much larger liquidity pool that people are looking to make some steady money off of while waiting for the next bull run.

UPDATE: Edited to add the dollar value of the mTokens because its obvious the mUSDT numbers are FUBAR. Based on the math, mUSDT should be about 1,750,780 active tokens for a utilization rate of 21.8%.

3 Likes

@nightbringer While I do understand your point of people preferring to use stable coins to enter and exit trades. It does not negate the fact that a steady 6.25% is a good return for those that don’t want risk. On the flip side, I completely agree that we need to make mTokens such as mBTC, mXRP, and mLTC to have a much wider offering to those who want to avail benefiting from 6.25% whilst investing in a more volatile basket.