Bytom released MOV Stable Financial System Whitepaper, truly realize multi-asset mortgage

On January 15th, Bytom officially released MOV Stable Financial System Whitepaper 1.0 and proposed an innovative stablecoin financial system based on MOV crosschain value exchange protocol.

From basic economic and MOV infrastructure-building perspective, the system consists of a diversified collateral framework, stability mechanism and clearing system. Through the introduction of risk bonds. A brand-new onchain finance and multilateral trading mechanism is constructed on the basis of n the risk control models and theories in the traditional financial industry. The MOV stablecoin system was born, served and beyond cross-chain.

MOV differentiates from other existing stablecoin financial systems in two main aspects:

1. Most of the current stablecoin projects start from the stablecoin itself, constantly telling the story of the stability mechanism and algorithm regulation, earning short-term benefits of replacing currency issuance or participating in the lending market, failing to build a complete ecosystem and the overall supporting facilities that stablecoin should have, which led to shortage of infrastructure dependency, rich collateral framework and application scenario expansion. Therefore such stablecoin system lost its positioning on being a lending matcher or a transaction medium, ignoring the core meaning of establishing a stablecoin- the right of clearing and pricing.

MOV will consider the design philosophy of stablecoins more from its complete ecological architecture and development blueprint, so that infrastructure can promote the construction of stablecoins, and stablecoins push back the evolution of infrastructure, and eventually form a standard pricing unit widely accepted by the ecology.

2. The incentive cycle. MOV stablecoins will fully take into account all the roles of direct and indirect participation in the stable financial system and feedback the earnings of the stable system to the ecological builders to promote the positive operation of the ecosystem scaling.

Below are some highlights of the MOV stable financial system:

  • Multiple Collateral Assets

A set of diversified and qualified collateral frameworks is the prerequisite for the creation of stablecoins. It creates value and liquidity for high-value distributed assets on multiple dimension. The core of stablecoin system is to establish a unified value coupling, pricing and clearing infrastructure. It also means discovering new cross-chain boundaries and truly establishing a stable MOV financial system.

Cross-chain provides a diversified source of qualified mortgage assets for the collateral framework. The first batch of qualified collateral assets include BTC, ETH, USDT and BTM. The four types of digital assets have different liquidity risks and market risks, and the correlation risk between them will not be too high. Users can choose the type of collateral independently. The four types of assets are independently mortgaged and risk is isolated.

  • System Roles and Architecture

The initial stage of the MOV stable financial system will mainly focus on the revenue-generating effect of multi-level synthetic assets (lending market) on users. On-chain financial infrastructure will be built to serve liquidity and application scenarios will not be fixed so that ecological developers and applications can be connected freely.

  • Three-level clearing system

The internal stability mechanism of MOV is based on risk clearing and risk bonds. It not only encourages the market to participate in the spontaneous response to liquidation arbitrage, but also reduces user losses and black swan prevention through risk intervention and reserve mechanism.

  • All-weather Risk Measurement System

In terms of risk management David (1999) and predictive analysis theory, MOV expands the Markov chain model that is widely used in the field of modern financial risk control, and considers the liquidation (default) process as a Markov in a limited state and space. Based on the classic Jarrow-Lando-Turnbull (JLT) model Robert et al. (1997), MOV first proposed and established an on-chain decentralized financial marketto-market (MTM) risk model, exploring the theoretical basis for the orderly development of stablecoin and DeFi.

As on-chain finance based on smart contracts and excessive mortgages has a natural, fair, objective, and unified standard of credit levels, laying a solid foundation for building on-chain credit risk measurement models. MOV draws on and integrates with mainstream modern credit risk measurement ( Rating) model, which combines market risk, credit risk, operational risk and macro factors while reflecting the quality of loans in the stablecoin system and future trends, measures loss distribution, and rationally allocates system assets (portfolio) and parameters.

Here is the link for downloading MOV Stable Financial System Whitepaper 1.0:

https://cdn.bytom.io/res/MOV-Stable-EN.pdf

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