The MonolithosDAO Platform Organization
Abstract
The MonolithosDAO Platform allows users to generate MCR by leveraging collateral assets approved by MonolithosDAO Governance. MonolithosDAO Governance is the community organized and operated process of managing the various aspects of the MonolithosDAO Platform.
MCR is a decentralized, unbiased, collateral-backed cryptocurrency soft-pegged to the Russian Ruble. Resistant to hyperinflation due to its low volatility, MCR offers economic freedom and opportunity to anyone, anywhere.
This white paper is a reader-friendly description of the Platform, which is built on the Ethereum blockchain. MonolithosDAO is a full-fledged fork of MakerDAO
About MonolithosDAO
MonolithosDAO is an open-source project on the Ethereum blockchain and a Decentralized Autonomous Organization created in 2020 and based on the MakerDAO Protocol. The project is managed by people around the world who hold its governance token, MDT.
Through a system of scientific governance involving Executive Voting and Governance Polling, MDT holders manage the MonolithosDAO Platform and the financial risks of MCR to ensure its stability, transparency, and efficiency. MDT voting weight is proportional to the amount of MDT a voter stakes in the voting contract, DSChief. In other words, the more MDT tokens locked in the contract, the greater the voter's decision-making power.
About the MonolithosDAO Platform
The MonolithosDAO Platform, built on the Ethereum blockchain, enables users to create currency. Current elements of the MonolithosDAO Platform are the MCR stablecoin, MonolithosDAO Collateral Vaults, Oracles, and Voting. MonolithosDAO governs the MonolithosDAO Platform by deciding on key parameters (e.g., stability fees, collateral types/rates, etc.) through the voting power of MDT holders. The MonolithosDAO Platform, one of the largest decentralized applications (dapps) on the Ethereum blockchain, was the first decentralized finance (DeFi) application to earn significant adoption
About the MonolithosDAO Team
The MonolithosDAO Team is part of the global MonolithosDAO community, built and launched the MonolithosDAO Platform in conjunction with a number of outside partners. It is currently working with the MonolithosDAO community to bootstrap decentralized governance of the project and drive it toward complete decentralization.
Bitcoin was created with this goal in mind. But, while Bitcoin succeeds as a cryptocurrency on a number of levels, it is not ideal as a medium of exchange because its fixed supply and speculative nature results in volatility, which prevents it from proliferating as mainstream money.
Welcome to Multi-Collateral MCR (MCD). In MonolithosDAO we believe that blockchain technology provides an unprecedented opportunity to ease the public's growing frustration with — and distrust of — dysfunctional centralized financial systems. By distributing data across a network of computers, the technology allows any group of individuals to embrace transparency rather than central-entity control. The result is an unbiased, transparent, and highly efficient permissionless system — one that can improve current global financial and monetary structures and better serve the public good.
Introduction
The MCR stablecoin, on the other hand, succeeds where Bitcoin fails precisely because MCR is designed to minimize price volatility. A decentralized, unbiased, collateral-backed cryptocurrency that is soft-pegged to the Russian Ruble, MCR's value is in its stability.
In recent years, user adoption of the stablecoins has risen dramatically, and have become a building block for decentralized applications that help expand the DeFi (decentralized finance) movement. More than any other cryptocurrency, stablecoins are able to function like money.
The fact that the idea of stablecoins is gaining popularity is evidenced, in particular, by the example of one of the largest American banks, JPMorgan, which in February 2019 was the first Bank in the world to create and test a digital monetary unit equal to 1 us dollar.
As the cryptocurrency industry grows, other banks, financial services companies, and even governments will create stable digital currencies (e.g., Central Bank Digital Currencies), as will large organizations outside of the finance sector.
The MonolithosDAO Platform
The MonolithosDAO platform is one of the digital applications on the Ethereum blockchain. An experienced development team participated in the creation of MonolithosDAO. MonolithosDAO is a decentralized finance (DeFi) application built on the MakerDAO protocol.
The MCR stablecoin is a decentralized, unbiased, collateral-backed cryptocurrency soft-pegged to the Russian Ruble. MCR is held in cryptocurrency wallets or within platforms, and is supported on Ethereum and other popular blockchains.
The MonolithosDAO Platform is managed by people around the world who hold its governance token, MDT. Through a system of scientific governance involving Executive Voting and Governance Polling, MDT holders govern the Platform and the financial risks of MCR to ensure its stability, transparency, and efficiency. One MDT token locked in a voting contract equals one vote.
An Overview of the MonolithosDAO Platform and Its Features
MCR is easy to generate, access, and use. Users generate MCR by depositing collateral assets into Land Vaults within the MonolithosDAO Platform. This is how MCR is entered into circulation and how users gain access to liquidity. Others obtain MCR by buying it from brokers or exchanges, or simply by receiving it as a means of payment.
Once generated, bought, or received, MCR can be used in the same manner as any other cryptocurrency: it can be sent to others, used as payments for goods and services, and even held as savings through a feature of the MonolithosDAO Platform called the MCR Savings Rate.
Every MCR in circulation is directly backed by excess collateral, meaning that the value of the collateral is higher than the value of the MCR debt, and all MCR transactions are publicly viewable on the Ethereum blockchain.
The MCR Stablecoin
What Properties of MCR Function Similarly to Money?
Generally, money has four functions:
2. A medium of exchange
1. A store of value
3. A unit of account
4. A standard of deferred payment
MCR has properties and use cases designed to serve these functions.
MCR as a Store of Value
A store of value is an asset that keeps its value without significant depreciation over time. Because MCR is a stablecoin, it is designed to function as a store of value even in a volatile market.
MCR as a Medium of Exchange
A medium of exchange is anything that represents a standard of value and is used to facilitate the sale, purchase, or exchange (trade) of goods or services. The MCR stablecoin is used around the world for all types of transactional purposes.
MCR as a Unit of Account
A unit of account is a standardized measurement of value used to price goods and services (e.g., RUB, EUR, YEN). Currently, MCR has a target price of 1RUB (1 MCR = 1 RUB). While MCR is not used as a standard measurement of value in the off-chain world, it functions as a unit of account within the MonolithosDAO Platform and some blockchain dapps, whereby MonolithosDAO Platform accounting or pricing of dapp services is in MCR rather than a fiat currency like RUB.
MCR as a Standard of Deferred Payment
MCR is used to settle debts within the MonolithosDAO Platform (e.g., users use MCR to pay the stability fee and close their Vaults). This benefit separates MCR from other stablecoins.
MonolithosDAO Vaults
MCR is generated, backed, and kept stable through collateral assets that are deposited into Land Vaults on the MonolithosDAO Platform. A collateral asset is a digital asset that MDT holders have voted to accept into the Platform.
All accepted collateral assets can be leveraged to generate MCR in the MonolithosDAO Platform through smart contracts called Land Vaults. Users can access the MonolithosDAO Platform and create Vaults through a number of different user interfaces (i.e., network access portals), including Land Borrow and various interfaces built by the community.
To generate MCR, the MonolithosDAO Platform accepts as collateral any Ethereum-based asset that has been approved by MDT holders. MDT holders must also approve specific, corresponding Risk Parameters for each accepted collateral (e.g., more stable assets might get more lenient Risk Parameters, while more risky assets could get stricter Risk Parameters). Detailed information on Risk Parameters is below. These and other decisions of MDT holders are made through the MonolithosDAO decentralized governance process.
Collateral Assets
Creating a Vault is not complicated, but generating MCR does create an obligation to repay the MCR, along with a Stability Fee, in order to withdraw the collateral leveraged and locked inside a Vault.
● Step 1: Create and Collateralize a Vault
A user creates a Vault via the Land Borrow portal or a community-created interface by funding it with a specific type and amount of collateral that will be used to generate MCR. Once funded, a Vault is considered collateralized.
Interacting with a Land Vault
● Step 2: Generate MCR from the Collateralized Vault
The Vault owner initiates a transaction, and then confirms it in his/her unhosted cryptocurrency wallet in order to generate a specific amount of MCR in exchange for keeping the collateral locked in the Vault.
● Pay Down the Debt and the Stability Fee
To retrieve a portion or all of the collateral, a Vault owner must pay down or completely pay back the MCR he/she generated, plus the Stability Fee that continuously accrues on the MCR outstanding. The Stability Fee can only be paid in MCR.
● Step 4: Withdraw Collateral
With the MCR returned and the Stability Fee paid, the Vault owner can withdraw all or some of his/her collateral back to the wallet. Once all MCR is completely returned and all collateral is retrieved, the Vault remains empty until the owner chooses to make another deposit.
Importantly, each collateral asset deposited requires its own Vault. So, some users will own multiple Vaults with different types of collateral and levels of collateralization.
Liquidation of Risky MonolithosDAO Vaults
To ensure there is always enough collateral in the MonolithosDAO Platform to cover the value of all outstanding debt (the amount of MCR outstanding valued at the Target Price), any Land Vault deemed too risky (according to parameters established by MonolithosDAO Governance) is liquidated through automated MonolithosDAO Platform auctions.
The Platform makes the determination after comparing the Liquidation Ratio to the current collateral-to-debt ratio of a Vault. Each Vault type has its own Liquidation Ratio, and each ratio is determined by MDT voters based on the risk profile of the particular collateral asset type.
The auction mechanisms of the MonolithosDAO Platform enable the system to liquidate Vaults even when price information for the collateral is unavailable. At the point of liquidation, the MonolithosDAO Platform takes the liquidated Vault collateral and subsequently sells it using an internal market-based auction mechanism. This is a Collateral Auction.
If enough MCR is bid in the Collateral Auction to fully cover the Vault obligations plus the Liquidation Penalty, that auction converts to a Reverse Collateral Auction in an attempt to sell as little collateral as possible. Any leftover collateral is returned to the original Vault owner.
The MCR received from the Collateral Auction is used to cover the Vault's outstanding obligations, including payment of the Liquidation Penalty fee set by MDT voters for that specific Vault collateral type.
MonolithosDAO Platform Auctions
If the Collateral Auction does not raise enough MCR to cover the Vault's outstanding obligation, the deficit is converted into Platform debt. Platform debt is covered by the MCR in the MonolithosDAO Buffer. If there is not enough MCR in the Buffer, the Platform triggers a Debt Auction. During a Debt Auction, MDT is minted by the system (increasing the amount of MDT in circulation), and then sold to bidders for MCR.
MCR proceeds from the Collateral Auction go into the MonolithosDAO Buffer, which serves as a buffer against an increase of MDT overall supply that could result from future uncovered Collateral Auctions and the accrual of the MCR Savings Rate (discussed in detail below).
If MCR proceeds from auctions and Stability Fee payments exceed the MonolithosDAO Buffer limit (a number set by MonolithosDAO Governance), they are sold through a Surplus Auction. During a Surplus Auction, bidders compete by bidding increasing amounts of MDT to receive a fixed amount of MCR. Once the Surplus Auction has ended, the MonolithosDAO Platform autonomously destroys the MDT collected, thereby reducing the total MDT supply.
A large Vault becomes undercollateralized due to market conditions. An Auction Keeper then detects the undercollateralized Vault opportunity and initiates liquidation of the Vault, which kicks off a Collateral Auction for, say, 50 ETH.
Now, let's say the Auction Keeper bids 5,000 MCR for the 50 ETH to meet this amount. The MCR bid is transferred from the Vault Engine to the Collateral Auction contract. With enough MCR in the Collateral Auction contract to cover the system's debt plus the Liquidation Penalty, the first phase of the Collateral Auction is over.
Each Auction Keeper has a bidding model to assist in winning auctions. A bidding model includes a price at which to bid for the collateral (ETH, in this example). The Auction Keeper uses the token price from its bidding model as the basis for its bids in the first phase of a Collateral Auction, where increasing MCR bids are placed for the set amount of collateral. This amount represents the price of the total MCR wanted from the collateral auction.
Example (Collateral Auction Process):
In order to reach the price defined in its bidding model, the Auction Keeper submits a bid in the second phase of the Collateral Auction. In this phase, the objective is to return as much of the collateral to the Vault owner as the market will allow. The bids that the Auction Keepers place are for fixed MCR amounts and decreasing amounts of ETH. For instance, the bidding model of the Keeper in this example seeks a bid price of 125 MCR per ETH, so it offers 5000 MCR for 40 ETH. Additional MCR for this bid is transferred from the Vault Engine to the Collateral Auction contract. After the bid duration limit is reached and the bid expires, the Auction Keeper claims the winning bid and settles the completed Collateral Auction by collecting the won collateral.
In addition to its smart contract infrastructure, the MonolithosDAO Platform involves groups of external actors to maintain operations: Keepers, Oracles, and Global Settlers (Emergency Oracles), and MonolithosDAO community members. Keepers take advantage of the economic incentives presented by the Platform; Oracles and Global Settlers are external actors with special permissions in the system assigned to them by MDT voters; and MonolithosDAO community members are individuals and organizations that provide services.
Key External Actors
A Keeper is an independent (usually automated) actor that is incentivized by arbitrage opportunities to provide liquidity in various aspects of a decentralized system. In the MonolithosDAO Platform, Keepers are market participants that help MCR maintain its Target Price (₽1): they sell MCR when the market price is above the Target Price, and buy MCR when the market price is below the Target Price. Keepers participate in Surplus Auctions, Debt Auctions, and Collateral Auctions when Land Vaults are liquidated.
The Platform derives its internal collateral prices from a decentralized Oracle infrastructure that consists of a broad set of individual nodes called Oracle Feeds. MDT voters choose a set of trusted Feeds to deliver price information to the system through Ethereum transactions. They also control how many Feeds are in the set.
The MonolithosDAO Platform requires real-time information about the market price of the collateral assets in Land Vaults in order to know when to trigger Liquidations.
Keepers
To protect the system from an attacker attempting to gain control of a majority of the Oracles, the MonolithosDAO Platform receives price inputs through the Oracle Security Module (OSM), not from the Oracles directly. The OSM, which is a layer of defense between the Oracles and the Platform, delays a price for one hour, allowing Emergency Oracles or a MonolithosDAO Governance vote to freeze an Oracle if it is compromised. Decisions regarding Emergency Oracles and the price delay duration are made by MDT holders.
Emergency Oracles are selected by MDT voters and act as a last line of defense against an attack on the governance process or on other Oracles. Emergency Oracles are able to freeze individual Oracles (e.g., ETH and BAT Oracles) to mitigate the risk of a large number of users trying to withdraw their assets from the MonolithosDAO Platform in a short period of time, as they have the authority to unilaterally trigger an Emergency Shutdown.
Price Oracles
Emergency Oracles
DAO teams consist of individuals and service providers, who may be contracted through MonolithosDAO Governance to provide specific services to MonolithosDAO. Members of DAO teams are independent market actors and are not employed by the MonolithosDAO Team.
Examples of DAO team member roles are the Governance Facilitator, who supports the communication infrastructure and processes of governance, and Risk Team members, who support MonolithosDAO Governance with financial risk research and draft proposals for onboarding new collateral and regulating existing collateral.
The flexibility of MonolithosDAO Governance allows the MonolithosDAO community to adapt the DAO team framework to suit the services needed by the ecosystem based on real-world performance and emerging challenges.
DAO Teams
While the MonolithosDAO Team has bootstrapped MonolithosDAO Governance to date, it is anticipated that the DAO will take full control, conduct MDT votes, and fill these varied DAO team roles in the near future.
The MCR Savings Rate (DSR) allows any MCR holder to earn savings automatically and natively by locking their MCR into the DSR contract in the MonolithosDAO Platform. It can be accessed via the Land Save portal or through various gateways into the MonolithosDAO Platform. Users aren't required to deposit a minimum amount to earn the DSR, and they can withdraw any or all of their MCR from the DSR contract at any time.
The MCR Savings Rate
The DSR is a global system parameter that determines the amount MCR holders earn on their savings over time. When the market price of MCR deviates from the Target Price due to changing market dynamics, MDT holders can mitigate the price instability by voting to modify the DSR accordingly:
1. If the market price of MCR is above 1 RUB, MDT holders can choose to gradually decrease the DSR, which will reduce demand and should reduce the market price of MCR toward the 1 RUB Target Price.
2. If the market price of MCR is below 1 RUB, MDT holders can choose to gradually increase the DSR, which will stimulate demand and should increase the market price of MCR toward the 1 RUB Target Price.
Initially, adjustment of the DSR will depend on a weekly process, whereby MDT holders first evaluate and discuss public market data and proprietary data provided by market participants, and then vote on whether an adjustment is necessary or not. The long-term plan includes implementation of the DSR Adjustment Module, an Instant Access Module that directly controls both the DSR and the Base Rate.
This module allows for easy adjustment of the DSR (within strict size and frequency boundaries set by MDT holders) by an MDT holder on behalf of the larger group of MDT holders. The motivation behind this plan is to enable nimble responses to rapidly changing market conditions, and to avoid overuse of the standard governance process of Executive Voting and Governance Polling.
The MDT token — the governance token of the MonolithosDAO Platform — allows those who hold it to vote on changes to the MonolithosDAO Platform. Note that anyone, not only MDT holders, can submit proposals for an MDT vote.
In practice, the MonolithosDAO Governance process includes proposal polling and Executive Voting. Proposal polling is conducted to establish a rough consensus of community sentiment before any Executive Votes are cast. This helps to ensure that governance decisions are considered throughtfully and reached by consensus prior to the voting process itself. Executive Voting is held to approve (or not) changes to the state of the system. An example of an Executive Vote could be a vote to ratify Risk Parameters for a newly accepted collateral type.
Any voter-approved modifications to the governance variables of the Platform will likely not take effect immediately in the future; rather, they could be delayed by as much as 24 hours if voters choose to activate the Governance Security Module (GSM). The delay would give MDT holders the opportunity to protect the system, if necessary, against a malicious governance proposal (e.g., a proposal that alters collateral parameters contrary to established monetary policies or that allows for security mechanisms to be disabled) by triggering a Shutdown.
Governance of the MonolithosDAO Platform
At a technical level, smart contracts manage each type of vote. A Proposal Contract is a smart contract with one or more valid governance actions programmed into it. It can only be executed once. When executed, it immediately applies its changes to the internal governance variables of the MonolithosDAO Platform. After execution, the Proposal Contract cannot be reused.
Any Ethereum Address can deploy valid Proposal Contracts. MDT token holders can then cast approval votes for the proposal that they want to elect as the Active Proposal. The Ethereum address that has the highest number of approval votes is elected as the Active Proposal. The Active Proposal is empowered to gain administrative access to the internal governance variables of the MonolithosDAO Platform, and then modify them.
Use of the MDT Token in MonolithosDAO Governance
Polling and Executive Voting
In addition to its role in MonolithosDAO Governance, the MDT token has a complementary role as the recapitalization resource of the MonolithosDAO Platform. If the system debt exceeds the surplus, the MDT token supply may increase through a Debt Auction (see above) to recapitalize the system. This risk inclines MDT holders to align and responsibly govern the MonolithosDAO ecosystem to avoid excessive risk-taking.
MDT holders can vote to do the following:
MDT holders can also allocate funds from the MonolithosDAO Buffer to pay for various infrastructure needs and services, including Oracle infrastructure and collateral risk management research. The funds in the MonolithosDAO Buffer are revenues from Stability Fees, Liquidation Fees, and other income streams.
The governance mechanism of the MonolithosDAO Platform is designed to be as flexible as possible, and upgradeable. Should the system mature under the guidance of the community, more advanced forms of Proposal Contracts could, in theory, be used, including Proposal Contracts that are bundled. For example, one proposal contract may contain both an adjustment of a Stability Fee and an adjustment of the DSR. Nonetheless, those revisions will remain for MDT holders to decide.
The MDT Token's Role in Recapitalization
MDT Holder Responsibilities
● MDT holders can vote to do the following;
● Change the Risk Parameters of one or more existing collateral asset types, or add new Risk Parameters to one or more existing collateral asset types;
● Modify the MCR Savings Rate;
● Choose the set of Oracle Feeds;
● Choose the set of Emergency Oracles;
● Trigger Emergency Shutdown;
● Upgrade the system;
Each Land Vault type (e.g., ETH Vault and BAT Vault) has its own unique set of Risk Parameters that enforce usage. The parameters are determined based on the risk profile of the collateral, and are directly controlled by MDT holders through voting.
The Key Risk Parameters for Land Vaults are:
Risk Parameters Controlled by MonolithosDAO Governance
● Debt Ceiling: A Debt Ceiling is the maximum amount of debt that can be created by a single collateral type. MonolithosDAO Governance assigns every collateral type a Debt Ceiling, which is used to ensure sufficient diversification of the MonolithosDAO Platform collateral portfolio. Once a collateral type has reached its Debt Ceiling, it becomes impossible to create more debt unless some existing users pay back all or a portion of their Vault debt.
● Stability Fee: The Stability Fee is an annual percentage yield calculated on top of how much MCR has been generated against a Vault's collateral. The fee is paid in MCR only, and then sent into the MonolithosDAO Buffer.
● Liquidation Ratio: A low Liquidation Ratio means MonolithosDAO Governance expects low price volatility of the collateral; a high Liquidation Ratio means high volatility is expected.
● Liquidation Penalty: The Liquidation Penalty is a fee added to a Vault's total outstanding generated MCR when a Liquidation occurs. The Liquidation Penalty is used to encourage Vault owners to keep appropriate collateral levels.
● Collateral Auction Duration: The maximum duration of Collateral auctions is specific to Land Vaults. Debt and Surplus auction durations are global system parameters.
● Auction Bid Duration: Amount of time before an individual bid expires and closes the auction.
● Auction Step Size: This Risk Parameter exists to incentivize early bidders in auctions, and prevent abuse by bidding a tiny amount above an existing bid.
The successful operation of the MonolithosDAO Platform depends on MonolithosDAO Governance taking necessary steps to mitigate risks. Some of those risks are identified below, each followed by a mitigation plan.
One of the greatest risks to the MonolithosDAO Platform is a malicious actor — a programmer, for example, who discovers a vulnerability in the deployed smart contracts, and then uses it to break the Platform or steal from it.
Risk and Mitigation Responsibilities of Governance
In the worst-case scenario, all decentralized digital assets held as collateral in the Platform are stolen, and recovery is impossible.
Mitigation: The MonolithosDAO Team's highest priority is the security of the MonolithosDAO Platform, and the strongest defense of the Platform is Formal Verification. The MCR codebase was the first codebase of a decentralized application to be formally verified.
In addition to formal system verification, contracted security audits by the best security organizations in the blockchain industry, third-party (independent) audits, and bug bounties are part of the Team's security roadmap. To review the formal verification report and various MonolithosDAO Platform audits, visit MonolithosDAO's Multi-Collateral MCR Security Github repository.
These security measures provide a strong defense system; however, they are not infallible. Even with formal verification, the mathematical modeling of intended behaviors may be incorrect, or the assumptions behind the intended behavior itself may be incorrect.
A malicious attack on the smart contract infrastructure by a bad actor
A black swan event is a rare and critical surprise attack on a system. For the MonolithosDAO Platform, examples of a black swan event include:
Please note that this list of potential "black swans" is not exhaustive and not intended to capture the extent of such possibilities.
A black swan event
● An attack on the collateral types that back MCR;
● A large, unexpected price decrease of one or more collateral types;
● A highly coordinated Oracle attack;
● A malicious MonolithosDAO Governance proposal.
Mitigation: While no one solution is failsafe, the careful design of the MonolithosDAO Platform (the Liquidation Ratio, Debt Ceilings, the Governance Security Module, the Oracle Security Module, Emergency Shutdown, etc.) in conjunction with good governance (e.g., swift reaction in a crisis, thoughtful risk parameters, etc.) help to prevent or mitigate potentially severe consequences of an attack.
Oracle price feed problems or irrational market dynamics that cause variations in the price of MCR for an extended period of time can occur. If confidence in the system is lost, rate adjustments or even MDT dilution could reach extreme levels and still not bring enough liquidity and stability to the market.
Mitigation: MonolithosDAO Governance incentivizes a sufficiently large capital pool to act as Keepers of the market in order to maximize rationality and market efficiency, and allow the MCR supply to grow at a steady pace without major market shocks. As a last resort, Emergency Shutdown can be triggered to release collateral to MCR holders, with their MCR claims valued at the Target Price.
Unforeseen pricing errors and market irrationality
The MonolithosDAO Platform is a complex decentralized system. As a result of its complexity, there is a risk that inexperienced cryptocurrency users will abandon the Platform in favor of systems that may be easier to use and understand.
Mitigation: While MCR is easy to generate and use for most crypto enthusiasts and the Keepers that use it for margin trading, newcomers might find the Platform difficult to understand and navigate. Although MCR is designed in such a way that users need not comprehend the underlying mechanics of the MonolithosDAO Platform in order to benefit from it, the documentation and numerous resources consistently provided by the MonolithosDAO community and the MonolithosDAO Team help to ensure onboarding is as uncomplicated as possible.
User Abandonment for Less Complicated Solutions
The MonolithosDAO Team currently plays a role, along with independent actors, in maintaining the MonolithosDAO Platform and expanding its usage worldwide, while facilitating Governance. However, the MonolithosDAO Team plans to dissolve once MonolithosDAO can manage Governance completely on its own. Should MonolithosDAO fail to sufficiently take the reins upon the MonolithosDAO Team's dissolution, the future health of the MonolithosDAO Platform could be at risk.
Mitigation: MDT holders are incentivized to prepare for the Team's dissolution after it completes "gradual decentralization" of the project. Moreover, successful management of the system should result in sufficient funds for governance to allocate to the continued maintenance and improvement of the MonolithosDAO Platform.
Dissolution of The MonolithosDAO Team
General Issues with Experimental Technology
Users of the MonolithosDAO Platform (including but not limited to MCR and MDT holders) understand and accept that the software, technology, and technical concepts and theories applicable to the MonolithosDAO Platform are still unproven and there is no warranty that the technology will be uninterrupted or error-free. There is an inherent risk that the technology could contain weaknesses, vulnerabilities, or bugs causing, among other things, the complete failure of the MonolithosDAO Platform and/or its component parts.
Mitigation: See "A malicious attack on the smart contract infrastructure by a bad actor" above. The Mitigation section there explains the technical auditing in place to ensure the MonolithosDAO Platform functions as intended.
The MCR Target Price is used to determine the value of collateral assets MCR holders receive in the case of an Emergency Shutdown. The Target Price for MCR is 1 RUB, translating to a 1:1 RUB soft peg.
MDT voters are also able to instantly trigger an Emergency Shutdown by depositing MDT into the Emergency Shutdown Module (ESM), if enough MDT voters believe it is necessary. This prevents the Governance Security Module (if active) from delaying Shutdown proposals before they are executed. With Emergency Shutdown, the moment a quorum is reached, the Shutdown takes effect with no delay.
Emergency Shutdown (or, simply, Shutdown) serves two main purposes. First, it is used during emergencies as a last-resort mechanism to protect the MonolithosDAO Platform against attacks on its infrastructure and directly enforce the MCR Target Price. Emergencies could include malicious governance actions, hacking, security breaches, and long-term market irrationality. Second, Shutdown is used to facilitate a MonolithosDAO Platform system upgrade. The Shutdown process can only be controlled by MonolithosDAO Governance.
Price Stability Mechanisms
There are three phases of Emergency Shutdown:
When initiated, Shutdown prevents further Vault creation and manipulation of existing Vaults, and freezes the Price Feeds. The frozen feeds ensure that all users are able to withdraw the net value of assets to which they are entitled. Effectively, it allows Land Vault owners to immediately withdraw the collateral in their Vault that is not actively backing debt.
After Shutdown is triggered, Collateral Auctions begin and must be completed within a specific amount of time. That time period is determined by MonolithosDAO Governance to be slightly longer than the duration of the longest Collateral Auction. This guarantees that no auctions are outstanding at the end of the auction processing period.
The MCR Target Price
Emergency Shutdown
1. The MonolithosDAO Platform shuts down Vault owners withdraw assets
2. Post-Emergency Shutdown auction processing
At the end of the auction processing period, MCR holders use their MCR to claim collateral directly at a fixed rate that corresponds to the calculated value of their assets based on the MCR Target Price. For example, if the ETH/RUB Price Ratio is 15,000, and a user holds 75,000 MCR at the Target Price of 1 RUB when Emergency Shutdown is activated, The user will be able to claim exactly 5 ETH from the MonolithosDAO Platform after the auction processing period.
3. MCR holders claim their remaining collateral
There is no time limit for when a final claim can be made. MCR holders will get a proportional claim to each collateral type that exists in the collateral portfolio. Note that MCR holders could be at risk of a haircut, whereby they do not receive the full value of their MCR holdings at the Target Price of 1 RUB per MCR. This is due to risks related to declines in collateral value and to Vault owners having the right to retrieve their excess collateral before MCR holders may claim the remaining collateral.
A cryptocurrency with price stability serves as an important medium of exchange for many decentralized applications. As such, the potential market for MCR is at least as large as the entire decentralized blockchain industry. But the promise of MCR extends well beyond that into other industries.
The following is a non-exhaustive list of current and immediate markets for the MCR stablecoin.
Addressable Market
● Working capital, hedging, and collateralized leverage. Land Vaults allow for permissionless trading by users, who can use the MCR generated against Vault collateral for working capital. To date, there have been numerous instances where Vault owners use their MCR to buy additional ETH (same asset as their collateral), thereby creating a leveraged but fully collateralized position.
● Merchant receipts, cross-border transactions, and remittances. Foreign exchange volatility mitigation and a lack of intermediaries mean the transaction costs of international trade are significantly reduced when using MCR.
● Charities and NGOs when using transparent distributed ledger technology.
● Gaming. For blockchain game developers, MCR is the currency of choice. With MCR, game developers integrate not only a currency, but also an entire economy. The composability of MCR allows games to create new player behavior schemes based around decentralized finance.
● Prediction markets. Using a volatile cryptocurrency when making an unrelated prediction only increases one's risk when placing the bet. Long-term bets become especially infeasible if the bettor must also gamble on the future price of the volatile asset used to place the bet. That said, the MCR stablecoin would be a natural choice for use in prediction markets.
The Future of the MonolithosDAO Platform: Increased Adoption and Full Decentralization
Should MDT holders approve new assets as collateral, those assets will be subject to the same risk requirements, parameters, and safety measures as MCR (e.g., Liquidation Ratios, Stability Fees, Savings Rates, Debt Ceilings, etc.).
MonolithosDAO was the first project to run reliable Oracles on the Ethereum blockchain. As a result, many decentralized applications use MonolithosDAO Oracles to ensure the security of their systems and to provide up-to-date price data in a robust manner. This confidence in MonolithosDAO and the MonolithosDAO Platform means that MonolithosDAO Governance can expand the core Oracle infrastructure service to better suit the needs of decentralized applications.
Asset Expansion
The MonolithosDAO Platform allows users to generate MCR, a stable store of value that lives entirely on the blockchain. MCR is a decentralized stablecoin that is not issued or administered by any centralized actor or trusted intermediary or counterparty. It is unbiased and borderless — available to anyone, anywhere.
All MCR is backed by a surplus of collateral that has been individually escrowed into audited and publicly viewable Ethereum smart contracts. Anyone with an internet connection can monitor the health of the system anytime at MCRstats.com.
With hundreds of partnerships and one of the strongest developer communities in the cryptocurrency space, MonolithosDAO has become the engine of the decentralized finance (DeFi) movement. MonolithosDAO is unlocking the power of the blockchain to deliver on the promise of economic empowerment today. For more information, visit the MonolithosDAO website.
Conclusion
Evolving Oracles
The MonolithosDAO Platform can be used by anyone, anywhere, without any restrictions or personal-information requirements. Below are a few examples of how MCR is used around the world.
According to the Findex World Bank international database, in 2017 about 1.7 billion adults in the world did not have access to banking services. According to a survey conducted by the Federal Deposit Insurance Corporation (FDIC) in 2017, in the US alone, about 32 million households have insufficient access to banking services or do not have it at all. This means that either they don't have a bank account at all, or they regularly use an alternative to traditional banks (for example, they take loans for salaries or loans in pawnshops). MCR can provide all these people with access to the global economy; they only need an internet connection. As a fair stablecoin, MCR allows everyone to gain financial independence, regardless of location or circumstances.
APPENDIX
Land Borrow allows users to access the MonolithosDAO Platform and generate MCR by locking their collateral in a Land Vault. Notably, users do not need to access any third-party intermediary to generate MCR. Vaults offer individuals and businesses opportunities to create liquidity on their assets simply, quickly, and at relatively low cost.
MCR holders everywhere can better power their journeys to financial inclusion by taking advantage of the MCR Savings Rate, which, as detailed earlier, builds on the value of MCR by allowing users to earn on the MCR they hold and protect their savings from inflation.
MCR Use-Case Benefits and Examples
MCR Offers Financial Independence for Everyone
Self-Sovereign Money Generation
Savings Earned Automatically
For example, if Bob has 100,000 MCR locked in the DSR contract, and the DSR set by MonolithosDAO Governance is 6% per year, Bob will earn savings of 6,000 MCR over 12 months. Additionally, because exchanges and blockchain projects can integrate the DSR into their own platforms, it presents new opportunities for cryptocurrency traders, entrepreneurs, and established businesses to increase their MCR savings and MCR operating capital. Due to this attractive mechanism, Market Makers, for example, may choose to hold their idle inventory in MCR and lock it in the DSR.
Cross-border remittances, whether for the purchase of goods or services or to simply send money to family and friends, can mean high service and transfer fees, long delivery timelines, and frustrating exchange issues due to inflation. The MCR stablecoin is used around the world as a medium of exchange because people have confidence in its value and efficiency.
Remittance users benefit from MCR in the following ways:
Fast, Low-cost Remittances
● Low-cost domestic and international transfers. MCR provides immediate cost savings, as low gas fees replace high bank and wire service fees. Low cost allows for more frequent transactions.
● Anytime service. MCR doesn't rely on bank-like hours of operation. The MonolithosDAO Platform can be accessed 24/7/365.
● Convenient on/off ramps. Users can take advantage of the many fiat on and off ramps that exchange fiat currencies to MCR. These options allow users to bridge the gap between the fiat and cryptocurrency world, and easily cash out MCR holdings in their local currencies.
● Increased security and confidence. The blockchain offers high levels of security and consumer trust.
As noted above, MCR is both a readily accessible store of value and a powerful medium of exchange. As such, it can help protect traders from volatility. For example, it provides traders with a simple way to maneuver between positions smoothly and remain active in the market without having to cash out and repeat an on-ramp/off-ramp cycle.
Stability in Volatile Markets
As more and more users become aware of MCR's value as a stablecoin, more developers are integrating it into the dapps they build on the Ethereum blockchain. As such, MCR is helping to power a more robust ecosystem. In short, MCR allows dapp developers to offer a stable method of exchange to their users who would rather not buy and sell goods and services using speculative assets.
Additionally, because MCR can be used to pay for gas in the Ethereum ecosystem, by creating DeFi dapps that accept MCR instead of ETH, developers offer users a smoother onboarding experience and a better overall experience.
System and Community Resources
MCR as an Ecosystem Driver and DeFi Builder