Mambo Stablecoin philosophy
The Mambo Protocol
The Mambo Stablecoin Protocol (Philosophy)
We changed it from "philosophy" to protocol, since we actually pratice what we write,
no empty philosophical theoretical talk, we are currently producing
Next Genaration Stable DEFI Currencies.
What makes a good currency good
Any currency stands and falls with the trust and confidence people can give into it.
The main thing to do for a stable coin is even not to have it backed 100% by collateral, but to create trust.
Yet you cannot build a Stablecoin on thin aire. The example of the BDO project of bearn.fi stands as a warning. BDO algorythmic stablecoin tries to be pegged to the USD by trading algorithms and ecosystem rewards, not necessary by collateral. It failed. This is a quite different way than the DAI project.
DAI is at this time (July 2021) the best decentralized functioning stablecoin. But it is still pegged on centralized fiat money.
MamboStablecoins (mStables) have in common with DAI that our mStables are backed with other cryptocurrencies as collateral.
But the stabilization mechanism of Mambo is much easier made by seignorage and arbitrage trading - in itself not decentralized. For details how decentralization will be finally reached and how the stabilization mechanism works see below.
In a crazy world where the governments behave like the most irresponsible and unable loosers and criminals, making more an more debts and never paying back any debts, enslaving the people theoretically for centuries by debts and bringing the central banks into the trap of negative interest rates and never ending QE, this way destroying the bond market, in such a crazy system it is really not necessary to think, that a good stablecoin must be fully collateralized by FIAT or other currencies or assets to be trustworthy.
Integrity is besides assets and other currencies the most valuable collateral. The FIAT world is void of integrity.
The blockchain technology and specially the smart contracts give us the possibility to enable trustless transactions.
Such a contract, that makes trustless transactions possible, is actually very trustworthy, so it is irony to use the word trustless.
Blockchain will draw a proof of history, whether there is integrity or not.
Why Mambo Stable Coins (mStables) ?
Why Mambo StableCoins (mStables)?
What makes them different to most of the stablecoins like USDT, BUSD, USDC, DAI, BDO etc.
Most stablecoins issued by Mambo are not directly pegged to FIAT currency, but to the price of very known physical asset of daily use like food, bread, beverages, cars, cigars, and some cool stuff.
Why peg on goods, assets and not on Fiat currency?
By pegging it on price indices of physical goods, the mambo stable coins gain over time the difference of creeping inflation. The official inflation rate is a scam. i.e. the bread price ind Switzerland and Poland grow since January 2018 to March 2021 80-100%. We tracked it.
Mstablecoins protect against inflation.
If we would have issued already a breadcoin back in January 2018, as the Idea was already born, a holder of BREAD would have gained 80-100% profit in comparison to CHF, USD, Euro and PLN and most other Fiat currencies.
Anticipated inflation rate application:
That means, we may uplift the PEG of our stablecoins annually at an assumed minimum inflation rate of 1-3%.
With this we anticipate the eventually happening price jump of the retail price on which the mStablecoin is pegged.
We may make serveral partial rate hikes yearly within the assumed range. This makes those jumps smoother.
Who may be interested in Mambo Stable Coins?
Everyone who wants to protect a part of his portfolio from creeping inflation but wants to park some of the cryptos of profits made into stablecoins. This kind of stableoins are ideal to put into Staking pools for high yield, if offered.
If you plan to buy a car in 2-3 years, best thing to do is to put aside regularly into a Car price pegged coin. (not yet issued (May 2021).
If you like to pay allways about the same for daily food, buy our food price pegged stablecoins and propagate them. Once grocery stores will accept such currencies, everybody can take advantage of such stablecoins for stability.
How will the price behavior of mStables approximately be?
In short term, it behaves very similar to Fiat currency from which the assets price index is taken. But in the long term, as described already, it protects against inflation (most of the time) while Fiat currency looses value, and mStables may loose value in times of deflation (very rare).
Currently the Gold pegged Stablecoins may suffer this. But those are a kind of old system pegged stablecoins. The gold, silver or platine price is not very useful for daily life price stability. It’s not a good or complete replacement for Fiat money.
The family of Mambo Stable Coins, so calles mStables will build trust on it’s own history, later with the use of trading robots, which will trade the currency toward the pegged index price. The first few stable coins issued by our developers will at the beginning be traded manually with one or two trading accounts. This trading or stabilization account will make seignorage trades on a DEX like zilswap (or pancakeswap) using the liquidity pools to push the price direction pegged price.
The Goal of this traders is to maintain the pegged price and build up collateral and increase liquidity with the potential profits made.
Mambo.li opened in June 2021 MAFRE, MamboSwap Automated Fixed Rates Exchange where it is possible to buy the mStables at the pegged price with fixed rates without slippage, no matter how much liquidity is in the market. This makes it possible for everybody to buy the mStables at the pegged price, in case the AMM liquidity pool went far above the pegged price – before an arbitrage trader or our trader pushed it down again.
MamboSwap enables everybody trustless interactions (swaps) with a smart contract based on the reference fixe rate. The fix rate is adjusted with latency, as it is needed. But not in realtime. Since MamboSwap normally swaps only between stablecoins, there is not much volatility and normally it is enough to control and adjust rates once or twice daily, if necessary.
The Tokens exchanged buy selling the mStables are used as collateral and to fund the liquidity pool. Profits above an collateralization goal may be distributed to LP Providers, Stakers and Holders.
MamboSwap ILO’s will make it possible to launch new stablecoins 100% fair at a fixed rate for everybody. MamboSwap can although be used to launch speculativ tokens 100% fair at fixed rates for small and big investors. Thanks to MamboSwaps fixed rates and possibility to limit daily swap amount per account, it will be possible to launch any token totally fair. Small investors will have to get their full intented share at the same price as big investors.
We aim to collateralize the mStables with at least 150% over time. ZIL, gZil, stream, carb, zwap, xsgd, pillar, mambo and some cryptocurrencies outside of zilliqa, like busd, bnb, monero and others will serve as collateral. For details read in the respectiv stablecoin section. The general market situation will influence which cryptos are taken as collateral.
Very important to know is that some of the stable coins may be put into the liquidity pool at a much lower price than the pegged price goal. This gives in the beginning a very good occasion to be traded as a speculative token until it reaches the aimed price and until the lower price band is backed near the aimed peg price. And this price goal gives you a very clear information, of how many % value growth is yet to be expected.
One or Two Stabilazation Trading Accounts
Those trading accounts are funded with as much mStabels as needed (elastic), adapted to demand.
This is a kind of seignorage. (Profits made buy the fact, that the issuer of the currency has a better price than the market, he has an unbeatable advantage.) As long as this advantage is not abused, one can trust in such currency. A part of the profits made by seignorage trading will we distributed to LP providers, holders or stakers. Another part to build up liquidity in the pool.
In the beginning the trades are made manually by our team, but it is aimed to be replaced completely by robots if possible, and the expierience we make with the first set of stable coins, will help program those robots usefully and painless for every hodler.
Stabilazation accounts trade to produce price stability and profits for buiding up collateral. This may look like unfair price manipulations, but once it is known and accepted, that they are essential part for the stabilization of the stablecoin, they will help build trust into the stability of the stablecoin. Those stabilization accounts will normally not trade aggressively. They may fight hard against whales invasion. If the price moves more than 5% they may become active.
Those who buy mStables at a price near the lower price band have low risk of losing money. Since this price is supported by our Stabilization Trading Accounts (STA).
We will publish the lower band price that is backed by collateral. This lower band price is steadfastly growing until it reaches the peg price goal.
If massive demand or whales trading puts the price higher than the peg, the STA or (later) trader robots will trade it back to the peg price. This will be done with irregular latency, sometimes fast or immediate, sometimes with a long enough delay to give occasions to the market to make arbitrage trades.
If the concept is understood and accepted by the market, the price should be about the pegged price by market players who take the arbitrage role or who even run themselves trading robots to do it.
It may become a contest between trading robots among robots and human arbitrage traders. That would be the ideal and funny situation.
A very important point to know is: The stablecoins are mintable. If there is high demand, it will be minted new coins to meet the demand without giving up the the index price peg.
There will be minted or made avaiable only as much new coins for the stabilization traders, as is needed for smooth stabilization.
Selling higher than the pegged price will produce important collateral.
A part of the profit of over colllateralization will be used to put into the liquidity pool, another part for the reserve account and another part to supply collateral to other mStables and the last part as profit for LP Providers (only if collateral is above 150%).
If the demand shrinks, liquidity will be taken out of the pool into the reserve account or may be burnt completely.
NO Burning Enforcement: It will be impossible by smart contract to burn out of other accounts than the burners. This makes law enforcement burn by corrupt totalitarian regimes as we currently face them, impossible.
2 Arbitrage Situations:
Important to know, specially for whales traders: Since the stabilization trader accounts of the stable coin can be funded by newly minted coins, or coins transferred from reserve into circulation, they cannot be beaten by no means.
There is no way one can trade a mambo stable coin higher as 103-105% of the pegged price long term. If no arbitrage traders will press the price back, the stablecoin trader account will do it for sure.
Everybody can buy an mStable on MamboSwap at the pegged price and sell it on DEX (zilswap) for a profit, should the price be above peg. On your own risk, since sippage on the DEX or volatilty can eliminate the aimed margin.
And there is no way that the price can be traded below the lower band price, that is backed by collateral for a long time. In this case funds of the collateral maybe used to trade it back up and / or liquidity will be taken out of the pool to bring it back to the lower band price. Everybody can buy an mStable on Zilswap cheap if it is below our sell back price and sell it for a profit on MamboSwap fixed rate.
On your own risk, since sippage on the DEX or volatility can eliminate the aimed profit margin.
The goal is, that this stabilization is finally made fully by robots. For future mStables we may consider to code it into the smart contract, but this is very risky. One tuning mistake in the code, and the coin would have to be replace. Nobody likes this.
We will not use the word treasury for it. Stable Coins in the Reserve Account are NOT counted to be in circulation. To have fast reaction time for market movements, there may be a sufficient high amount of coins preminted and ready to be distributed into the liquidity pool or to the assigned stabilization trader accounts.
Did we mention whitepaper? This Mambo protocoll for mStables is part of the specific whitepaper and tokenomy of each stablecoin issued by Mambo.
Who are we?
We are not a company. We are enthusiastic visionaries for a less corrupt trustless trade with Stables not controlled by corrupt and brutal Big Brother.
We remember well what evil Big Brother did to the founder of Etherdelta, the first DEX, or to e-btc, where they have stolen allthough our money.
Most of the core team are anonymous and will stay anonymous.
Remember, our concept can be copied and multiplied by others. Hopefully.
Nobody can destroy a good concept, never. The truth, righteousness and integrity overcomes the corruption of Big Brother and Tech Giants.
Of course we will take a small part of the issued tokens for development and yet a smaller part for creator an if there are sponsors, a small part for them.
We will take Trading fees profits of the liquidity pool into the core team pocket. That’s the business model. The more the project is accepted as being serious and trustwothy, the more fees profit we will make. We may personally take part of the trading in the liquidity pool as well with amounts not succeeding 5% of the pool per day.
A small part is for Education, Marketing and Security.
The big part is distributed to the Liquidity Pool and the stabilization trading account(s) and MAFRE.
MStablecoins in the the following accounts are not to be considered in circulation, since they are not sold yet:
Distributor, Burner/Minter, Stabilization, MAFRE. Even our share in Zilswap DEX is not to be considered in circulation, since it is only offered, but not sold.
Details to each Token in the specific tokenomy of the Token.