MOV unbanding protocol explanation. What is the MOV unbanding protocol? | By Capital | Capital | June 2021
The MOV unbanding protocol is an encrypted asset interest rate agreement based on Bytom’s main chain and Bytom’s second-tier side chain Vapor. To put it simply, MOV actually implements a lending service like a bank through an interest rate algorithm model based on smart contracts. Users can earn interest through deposits, withdrawals and loans. Of course, unlike the credit risk of traditional finance, the over-mortgage loan used by MOV can reduce the risk of default on the chain.
The advantages of MOV JieDai
Instant lending, instant deposit and withdrawal, instant deposit and withdrawal
MOV is based on the high-performance side chain Vapor with instant confirmation. The depositor can withdraw the principal and interest immediately after depositing the coin, and the borrower can quickly return the borrowed coin and obtain collateral.
Zero on-chain transaction fees, zero deposit service fees
Compared with lending on Ethereum, MOV does not charge any on-chain transaction fees for lending. At the same time, only 10% of the interest on the borrowed currency is charged as a platform service fee, and no fee is charged for the deposit.
The world’s first public auction tool for DeFi lending
The world’s first product interface supports the auction of cleared assets, lowers the threshold for use, and ordinary users can participate. The winners are selected through a random algorithm to ensure efficiency and fairness.
Separation of loan pool and mortgage pool to reduce risks
The MOV loan solution pool is separated from the mortgage pool, and the mortgage pool cannot be used for borrowing again, which greatly reduces the risk and prevents one pool from affecting other pools.
Where does the profit come from?
Like traditional finance, the profit of deposit users is provided by the interest of borrowers. The loan settlement pool is allocated according to the deposit ratio and interest of each deposit user. Through the piecewise function, variable interest rates under different market supply and demand conditions can be constructed, and extreme situations can be flexibly dealt with.
Liquidation and auction
MOV adopts an over-collateralized lending mechanism. In extreme cases, it can provide certain solvency by liquidating mortgage assets.
MOV sets up a liquidation line to decide whether to liquidate. By comparing the mortgage rate and the liquidation line, it sets the risk-free, low-risk, and high-risk assessment levels, and prompts users in time when a risk switch occurs.
When the liquidation line is reached, the system will automatically auction the mortgage assets. Because the user has been reminded through a variety of mechanisms before, the buffer period is no longer set but the auction is directly.
MOV introduces a random algorithm in the clearing agreement, and each bidder has the same bidding probability. At the same time, the security deposit system is adopted to prevent malicious bidding.
It is worth mentioning that MOV will provide the first personalized auction interface tool in the DeFi field. Ordinary users can participate in the auction, and through a certain mechanism to ensure the same probability and opportunity as API users, to further enhance the auction effect.
MOV JieDai guarantees the security of the system and user funds through over-collateralization, separation of loan pool and mortgage pool, all-weather exchange rate monitoring and risk management system.
Over-collateralization is a common practice in the current DeFi lending business. Because the blockchain has a certain degree of anonymity, it is difficult to pursue liability for breach of contract solely through credit lending. At present, loan products such as AAVE and Compound will mix the collateral pool with the loan pool, that is, the user’s collateral will enter its corresponding loan pool, and the collateral can continue to be used as a loan product. Although the efficiency has been improved, the system has also taken more risks. Users have returned the borrowed coins but cannot get back the collateral. MOV separates the two, and the collateral is no longer lent as a loan asset, ensuring that the borrower can get back the collateral immediately after repayment.
MOV will monitor the exchange rate in real time 24 hours a day, find assets that reach the c settlement line in time, and perform liquidation to ensure that there are sufficient funds in the loan pool.
At the same time, MOV and SlowMist reached a strategic cooperation to jointly protect the safety of MOV.
Compared with existing lending products on Ethereum, MOV has natural advantages in terms of performance and cost. At the same time, through innovation, there are also many bright spots in terms of liquidation and security. MOV also integrates BTC, LTC, and DOT ecosystems through cross-chain, supplementing non-Ethereum ecological lending products.