What Is MCDEX Token (MCB)?
Mai Protocol v3 is a fully permission less protocol for decentralized perpetual swaps. It is designed to prioritize censorship resistance, security, self-custody, and to function without any trusted intermediaries. The innovation of MCDEX Token is highly capital efficient, thus providing lower slippage and costs for traders. Within the same liquidity in the pool, MCDEX AMM is over 1000x more efficient than traditional XYK AMM. MCDEX protocol allows anyone to create any market, which dramatically increases market diversification. The AMM price shifts according to its position.
When MCDEX Token longs, the AMM price will be lower than the index price, and vice versa when AMM shorts. In other word, the market is out of balance at this point, so the market price will shift relative to the index. In this case, the protocol will charge funding payment from the positions opposite to AMM and the traders with the same position of AMM will also receive the funding payment. AMM always receives funding payment as long as it holds positions. The funding rate is positively correlated with AMM’s position size, i.e. the more position AMM holds, the further away the market price deviates, causing a higher funding payment.
MCDEX Token Storage Key Points
|Coin Name||MCDEX Token|
|Circulating Supply||1,854,177.55 MCB|
|Source Code||Click Here To View Source Code|
|Explorers||Click Here To View Explorers|
|Twitter Page||Click Here To Visit Twitter Group|
|Whitepaper||Click Here To View|
|Official Project Website||Click Here To Visit Project Website|
The goal of this protocol is to allow anyone to create and trade in any perpetual market. To start with, anyone can create their own perpetual market with the price feed of underlying asset and choose any ERC20 as collateral. Secondly, we have designed an MCDEX Token for the perpetual market and this AMM also has better capital efficiency. Moreover, AMM solves the liquidity problem – anyone can provide liquidity to AMM by depositing assets in the pool and get reasonable market making profit. At last, anyone can trade perpetual swaps permissionlessly. Traders’ assets are in the smart contract in a noncustodial way and the process of trading are conducted on chain completely.
How to become an Operator
Create a perpetual swap and set the initial parameters (such as margin rate, AMM risk parameters, etc.). The MCDEX Token of perpetual swap has a set of risk parameters. By adjusting these parameters, an operator is able to change AMM’s market making risk, market depth, slippage, and spread etc. The protocol defines an Oracle interface so that the currently available Oracles can be applied in this protocol. An operator can provide their own Oracle data to perpetual swaps as well. The operator can initiate the governance process to change the range of the risk parameters.
Perpetual MAY has a Base Funding Rate setting, which aims to account for the difference in interest rates of the base and quote currencies. When AMM holds zero position, or AMM longs and Base Funding Rate is negative, or AMM shorts and Base Funding Rate is positive, the Base Funding Rate will be added to the funding rate.
Traders are the major participants in the market. Traders realize PNL by trading against MCDEX Token and they are always the taker. In this protocol, all trades must go through AMM, and traders can’t bypass AMM to trade amongst themselves. For every trade, traders need to pay a certain amount of transaction fee. In addition, trader will pay or receive funding payment according to the funding rate policy. Keeper is an auxiliary role. Anyone can be a keeper to take over accounts with insufficient margin. A group of whitelisted keepers can liquidate the accounts through AMM.
On one hand, funding payment can prevent more traders from becoming the counter party of AMM, which could lead to a further price deviation. On the other hand, a high funding rate will attract more LP to add liquidity or open the same position with AMM. Based on the AMM design, both adding liquidity to MCDEX Token and trading against AMM which reduces the AMM’s position size will decrease price deviation. In such a way, funding payment will push the market price back to the index.
A delegator is a special role. There could be a delegator for every margin account. A delegator can operate over the account to trade (directly against AMM or through a broker), but they can’t withdraw fund from the account. The goal of delegator is to separate hot and cold wallets and realize the custody of trading strategies. Since all trades must go through AMM, the market reaches balance when AMM doesn’t have any position. At this point AMM will provide the best bid and the best ask price around the index, then the current market price is close to the index.
Margin & PNL
MCDEX Token Due to the permission less nature of this protocol, anyone can create any perpetual swaps of different risk levels. To prevent the spread of risk across different perpetual swaps, the protocol uses isolated margin mechanism – each perpetual swap owned by a trader has its own independent margin account, and the PNL of this account won’t affect other margin accounts they trade.