Composite $CMST - Stablecoin of the Cosmos Ecosystem

About Composite $CMST

Since the crypto world is full of tokens whose prices are unstable and unpredictable, it becomes difficult to store assets using those tokens. It is therefore necessary to come up with tokens that have a stable value.

How is $CMST Minted

$CMST can be minted by locking-up Cosmos ecosystem assets as collateral for $1.

How will $CMST maintain its Peg

There have been reported cases of Stablecoins losing their peg against the USD, leading to loss of assets and value. One of such cases is that of an algorithmic stablecoin, TerraUSD (UST), produced by Terraform Labs.

  • If $CMST > $1: Users can mint $CMST for $1 by locking up collaterals and selling the minted $CMST for a price >$1. Protocol lowers borrow interest APR as well as savings APR to ensure minted $CMST adds supply to markets. Backstop: Protocol utilizes surplus $CMST to buy and burn $HARBOR.
  • If $CMST < $1: Users can buy $CMST at a price <$1 to unlock collaterals and pay back their debt cheaply. Protocol increases borrow interest APR as well as savings APR to ensure $CMST supply in markets reduces. Backstop: Protocol mints and sells $HARBOR to buy $CMST.
  • Token Surplus: To maintain the $CMST token, minting it must be made a priority, in order to boost the constant and surplus distribution of the crypto token. To encourage the mining of the $CMST token, you are able to gain lower interest rates when you get it via collaterals.
  • Harbor Protocol: $HARBOR token is the governance token of the $CMST token’s Composite forum. To boost the circulation of $CMST, it can be used to acquire more of the stablecoin. $HARBOR is used to make decisions on future developments of the $CMST token. $HARBOR token was created through the TokenMint module of the Comdex modular chain and is a cosmosSDK-based token rather than a CW20 token so that it could be utilized by other modules like vault, locker, etc.
  • Emergency Shutdown: As a part of additional solvency measures, governance can be used to trigger an emergency shutdown to block the minting of $CMST with a specific collateral asset type or a protocol-wide trigger to temporarily shut down the minting to prevent additional damage.

What happens when markets of collateral assets turn volatile?

Comdex had written an article stating that the minting of $CMST will be achieved by creating over-collateralized CDPs (typically >200% collateralization) of IBC-enabled assets. Users minting $CMST must ensure that their CDPs maintain a minimum collateralization ratio (usually 150%). Supposing a fall in the price of the collateral asset causes the balance to fall below 150%, the protocol begins liquidating the collateral asset to buy and repay $CMST debt until a ratio of 150% is achieved again. These liquidations occur through on-chain auctions of collateral assets in which users can permissionless participate. This mechanism ensures that the protocol debt remains protected against market volatility.

About Comdex

COMDEX’s synthetics protocol unlocks access to a vast set of commodity debt assets and liquidity, making the flow of capital from DeFi to CeFi seamless. Comdex develops possible solutions for the decentralization of finance (DeFi) and the democratization of commodities by handing over to investors the knowledge of a widened scope of asset classes and rewarding features.



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