MEXC Research: The Zero Interest Rate Lending Protocol, Maze Protocol
The Maze protocol is the first zero interest rate lending protocol based on blockchain technology. With Maze, lenders can profit with minimal risk, while borrowers can obtain funds without having to pay interest payments permanently.
Maze replaced the traditional interest model with a highly dynamic yield consensus algorithm and integrates innovative and transparent middleware to migrate the revenue calculation workload from the main blockchain.
The protocol is returning the control of monetary policy to users in a way similar to Bitcoin’s liberation of rights to issue money from the central bank. Maze is the world’s first decentralized and over-collateralized general currency market, allowing zero interest rate loans. Lenders put their funds into the asset pool, from which borrowers can initiate loans. The core goal of Maze is to establish a currency market liquidity pool for various crypto assets that can be borrowed without interest, and suppliers can earn the effective interest rate provided by the local MAZE token.
Maze’s core protocol consists of smart contracts that automate the management of a pool of unmanaged assets through the issuance and investment of permanent smart bonds (PSBs).In addition, the protocol automatically manages the issuance and settlement of these on-chain bond instruments (strip bonds in traditional financial terms) and provides liquidity for the crypto market.
Lending Ratio and Liquidation
Deposit: If you do not want to lend assets, you can put them into the reserve pools (the use of reserve pool funds is being planned).
Loan credit: After adding assets as collateral, the assets will be put into the fund pool and allowed for other users to lend. At the same time, the loan credit will be evaluated according to the collateral factors.
Loan: Collateral factors affect the credit limit. If the credit limit is sufficient, 0 interest rate lending can be implemented.
Staked mining: At present, single currency staking is supported. After deposit, you can go to Maze Catteries to collateralize rmtoken/fmtoken (generated during deposit) and obtain MAZE token rewards.
Liquidation: You can monitor accounts as a liquidator, find unhealthy accounts and help with liquidation to prevent insolvency. In return, you can get the liquidation penalty of the loan user.
Lending markets and Mining
Process of Lending and Return
Asset Structure
In MAZE Protocol, it is divided into asset categories (Asset Catteries) and Maze Catteries.
Asset Categories
1. Store and transfer physical assets.
2. For the provided assets, mint the delegation tokens.
3. For the withdrawn assets, the corresponding delegation token is recovered.
Tabby Cattery
It mainly provides stablecoin staking, such as USDT and USDC positions.
Siamese Cattery
It mainly provides support for non-stablecoin staking, such as BNB and ETH positions.
Ragdoll Cattery
· Liquidity pool of MAZE-LP (MAZE-BNB)
· When you provide MAZE-LP to the Catteries, the same amount of pMAZE and lpMAZE will be issued. The lpMAZE token is the farming delegation token, while the pMAZE token is the asset entrustment token.
· This Cattery is only used to manage asset storage and does not involve the token market.
Each substructure of Tabby Cattery and Siamese Cattery consists of a pair of underlying asset pools (reserve pool and capital pool).
Reserve Pool (Reserve pool rMP, can participate in MAZE mining, not in lending)
1. Only used for secure asset storage.
2. Changes in supply will not affect the lending credit.
3. When providing assets, the reserve pool will issue the same number of rtoken and rmtoken. The rtoken is the asset delegation token obtained from the stored assets, and rmtoken is the farming delegation token used to participate in Farming. (For example, once 100 USDT is provided in its reserve pool, 100 rUSDT and 100 rmUSDT will be obtained, and 100 rmUSDT can be used to participate in MAZE mining).
4. When withdrawing assets, the mine pool will recover the same amount of rtoken and rmtoken (for example, if you want to withdraw 100 USDT from its reserve pool, you need to repay 100 rUSDT and 100 rmUSDT at the same time).
Funding Pool (Fund pool fMP, participation in MAZE mining and lending)
1. Users can lend the funds provided by the fund pools.
2. The funds provided in the fund pool will be used as collateral, and the change in the supply of the fund pool will affect the loan credit.
3. When providing assets, the mining pool will issue the same number of ftoken and fmtoken. The rtoken is the asset delegation token obtained from the collateralized assets, and fmtoken is the farming delegation token (For example, once you provide 100 USDT in its capital pool, you will receive 100 fUSDT and 100 fmUSDT in return, and 100 fmUSDT can be used to participate in MAZE mining).
4. When you withdraw assets, the fund pool will recover the same amount of ftoken and fmtoken (For example, if you want to withdraw 100 USDT from its fund pool, you need to repay 100 fUSDT and 100 fmUSDT at the same time).
Maze Catteries
The savings delegation token is stored and used as the calculation basis of Farming. Rewards are generated based on cycles, not blocks.
Maze Catteries is a series of smart contracts used to store rmtokens, fmtokens, and lpMAZE to calculate the rewards in each Farm. It needs to be staked manually. At present, the Asset Catteries in the testnet provide automatic re-investment. For example, after the funds are deposited into the reserve pool, a rmtoken will be automatically generated to participate in mining.
MAZE
Maze Protocol Native Token: MAZE
Total supply: no fixed upper limit, mainly produced by mining
The MAZE produced by mining will first come from Ragdoll Cattery which will produce 5% of the global production and the remaining 95% will be distributed to the participants of Tabby Cattery and Siamese Cattery. The distribution ratio between Tabby Cattery and Siamese Cattery will be determined by community governance.
Layered Harvest Regulator
It is responsible for adjusting the value distribution balance of each pool or asset.
Supply Value Ratio Balance (SVRB)
The purpose of SVRB is to keep the value balance between MAZE and stablecoins in the Tabby Cattery.
When the proportion of MAZE in the Tabby Cattery decreases to 26%, 80% of the reward will be distributed to the MAZE providers and 20% to the stablecoin providers.
This ratio will not persist because the imbalance of yield will lead to more MAZE deposits. Due to the increase of MAZE, the overall yield begin to decline. When the value ratio approaches 1:1, the reward ratio tends to balance again.
Simple Value Weighted Distribution (SVWD)
Allocation share of different currencies in each Cattery:
For example, the USDT Cattery has a supply of $3 million USD, and the BUSD Cattery has a supply of $2 million USD. In this round, 50 MAZE will be awarded for stablecoin positions, 30 MAZE for USDT positions, and 20 MAZE for BUSD positions.
Funding Occupancy Ratio Balancing (FORB)
The Funding Occupation Ratio Balancing (FORB) aims to encourage the supply of assets from more Funding pools when necessary.
In a Funding pool, the proportion of fund occupation value determines the harvest distribution proportion between the fund pool and the reserve pool. When more assets are occupied, more MAZE proceeds will be rewarded to the Funding supplier.
FORB is applied in each pair of Funding and Reserve.
The FORB curve:
The Practical Value of MAZE:
Used for liquidity mining
Used for staked mining
Used for lending tokens
Participation in project voting governance
Neko Network Testnet
Similar to Polkadot’s canary network Kusama, Maze first deployed an experimental testnet, Neko, which has the same principle and mode as MAZE.
Neko has the same function as Maze’s design, and the native token is NEKO. Neko’s goals include verifying the feasibility of the product in the real world under controllable risk and become a long-term test platform for new functions in the future. This means that Neko has faster version updates than Maze. Of course, as a testnet, Neko’s operation will be relatively centralized.
Tokenomics
Token: NEKO
Total supply: No fixed upper limit, through ISO initial release + subsequent mining output
Mining (start mining output after ISO)
10 minutes as the one-week cycle, and the cycle output is 500 NEKO tokens
ISO release (current progress):
1. The project first establishes initial liquidity in DEX (10000 tokens, BNB-NEKO)
2. The team deposited part of NEKO into the asset pool as a mining reward (4,032,000 tokens)
3. During the ISO period, users can deposit the supported currencies for NEKO mining (BTC/ETH, etc.)
4. For loan users, the lender can obtain relevant delegated equity tokens through the deposited asset to conduct NEKO mining and receive incentives. The borrower can enjoy the lending experience with 0 interest rate.
5. If the user re-invests the NEKO obtained from mining, part of the re-invested NEKO will be withdrawn from the pool and burned by the team (the burning proportion during ISO is 100%)
6. The assets of NEKO mining during the ISO period will be locked for 3 months, but the assets can be re-invested.
7. When all 4,032,000 NEKO tokens in the pool are mined, the ISO process ends.
NEKO’s current locked position value and liquidity pool scale
Project evaluation:
Value:
Zero-interest rate lending provides a friendlier way of capital utilization for the DEFI market.
The borrower can obtain income through staked mining or liquidity mining, and the security of funds is guaranteed through isolation.
The liquidator can obtain liquidation rewards through the liquidation of non-performing accounts to help reduce non-performing loans and reduce the overall risk.
The platform ensures the interests of investors and mining participants by burning and limiting the mining of native tokens.
Possible risks:
At present, only the testnet is online, and some changes may occur after the mainnet goes online and governance is added.
There is no limit on the total amount, and the price may fluctuate greatly with the increase of liquidity.
The overall model has not been verified by sufficient data, including the loan credit model, liquidation strategy, and loan mining balance income.
