Multiplier Finance started its journey as a licensed CeFi lender in 2019 with regulated financial licenses obtained (SRO Switzerland VQF 10075 and Hong Kong Money Lenders License 1702/2019). It later formed a strong alliance with reputed security industry leaders such as Coinbase Custody and JUMIO KYC/AML.
Later in 2021 Q1, it launched its 3rd protocol called Multi-Chain Lend (MCL), which is a fork of Aave that will support flash loans on Binance Smart Chain.
The native token of Multiplier Finance, MXX, is an ERC-20 token. MXX tokens are not pre-mined and can only be minted through transactions that provide liquidity in the platform or by depositing assets into the SSB contract. MXX holders who mint MXX through transactions are incentivized and have voting power that they can use to participate in the network’s governance activities.
To maintain a stable and fair pricing system, the MXX protocol uses mFactor, an internal price factor that determines and updates the price of assets periodically. Currently, the MXX token can be traded on Uniswap and Bilaxy.
Below are the different applications currently supported by the Multiplier Finance platform:
- MXX to bMXX Converter
- Multi-Chain Lend (MCL)
- Simplified Stable Bonds
- CeFi Lending Platform
MXX to bMXX Converter
The Multiplier protocol is based on Ethereum whereas MCL is built on BSC. Thus, the Multiplier Finance platform has built a conversion platform that will allow the token holders to convert their MXX (ERC-20) into bMXX (BEP-20) tokens in a ratio of 100:1.
Multi-Chain Lend (MCL) is an Aave-forked, non-custodial lending protocol on Binance Smart Chain (BSC) that will offer unique lending and borrowing opportunities like flash loans to its users. It is the first project to offer flash loans on BSC. Being on Binance Smart Chain, it offers faster transactions and low gas fees. Compared to Aave, it includes higher incentives and different platform fees. bMXX, a BEP-20 token, is the native governance token of MCL. We will explain more about MCL in detail in our next article.
CeFi Lending Platform
Multiplier Finance had a CeFi platform. However, new user signups and rewards (MXX minting, APY) are currently disabled on it, and users are advised to migrate their assets to the DeFi platform.
Simplified Stable Bonds Contracts (SSB Contracts)
Multiplier Finance allows the users to create their SSB contracts using this application. Users can select any asset supported by the platform to create a contract and set its interest rate and tenure. The platform currently allows you to create an SSB contract using only one asset. However, if you wish, you can create multiple contracts for the different assets. Users can create as many contracts as they want. There is no restriction on the number of contracts that a user can create or hold. However, it is dependent on the number of MXX tokens that are left for minting.
During SSB contract creation, users are required to provide a burning fee in the form of MXX. Later, the burn fee is sent to their official burn address and removed permanently from the ecosystem. This process led to reducing the overall total token supply of MXX. This burn amount is currently set at 8%.
Below is the chart showing the tenure, burn rate, APY, and effective yield corresponding to SSB contract creation, but these may vary with time. Read the link here to know more about SSB and contract creation.
If the user wishes to withdraw their asset before the maturity period, they can do it by paying the burn fee. And the burn fee is calculated based on the percentage of the current MXX minted throughout the contract.
SSB application ended last year.
TakoSwap is an Ethereum-based automated market-making (AMM) decentralized exchange (DEX) by Multiplier Finance. It is a fork of SushiSwap and Uniswap with some additional AMM design structure in terms of price curves and contributor rewards.
TakoSwap will be fully operated and governed by the community members. The Tako tokens will be completely distributed to the Tako community, with no team allocation, no pre-mining, and no initial public sale. TakoSwap is fully audited by Bramah Systems.
TakoSwap offers the following facilities to the users:
- TakoSwap Exchange
- TakoSwap Liquidity Pools
- TakoSwap Farm
MXX Token Burn Mechanism
Multiplier Finance has two types of burn fees in their ecosystem:
- Burn fee during contract creation
- Burn fee during contract early redemption
Every week, these burn fees are sent to an official burn address, thereby reducing the overall token supply. Below are the steps that are followed during the burn process:
Stage 1: MXX is transferred to the official burn address – 0x19B292c1a84379Aab41564283e7f75bF20e45f91
Stage 2: The MXX in the burn address is periodically burned and announced publicly.
Stage 3: The maximum supply of MXX tokens will be reduced accordingly on etherscan.io.
- Token issuance entity: Multiplier
- Token name: Multiplier Token
- Token ticker: MXX
- Token distribution mechanisms: No pre-mining, no pre-sale, and no ICO. Only through minting.
- Total token supply: 9,000,000,000 MXX
Over the year, Multiplier has evolved from a crypto lending platform to a cross-chain DeFi platform. It has multiple products in its suite, like an AMM DEX, SSB contract creation, cross-chain token converter, and, most importantly, MCL, which allows you to get secure lending and borrowing on Binance Smart Chain with faster transactions and low gas fees. The platform’s native token, the MXX token, is a deflationary token, which means it will be burned over time. Thus, reducing the overall token supply, and thereby increasing the token price.
Resources: Multiplier Protocol Whitepaper
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