In the summer of 2020, the MCR stablecoin was launched. In this article, we will tell you what makes it unique and what it can be useful for.
What is MCR
MCR is the first decentralized stablecoin pegged to the Russian ruble. Its value is secured by the cryptocurrency locked in the smart-contract of the MonolithosDAO. This community driven DeFi platform issues MCR stablecoins. Such type of governance means that the creators don’t have the technical ability to influence the project after launch. For example, they can’t change the size of commissions or block stablecoins on someone’s wallet.
Any decisions on MonolithosDAO and MCR are made through a vote among the owners of MDT governance tokens. At these votings, the community determined which cryptocurrency can be used as collateral and set the fees on the platform. MDT tokens for voting can either be obtained for using MonolithosDAO, or bought on cryptocurrency platforms.
How MCR stablecoins are created
MCR stablecoins are created on the MonolithosDAO platform using cryptocurrency collateral. To issue MCR, you must leave a collateral in ETH or WBTC on the platform. The amount of the collateral must be at least 125% of the amount of MCR created. Since the stablecoin is pegged to the Russian ruble, the collateral percentage is calculated in Russian rubles. For example, if you want to issue 1000 MCR, your collateral in ETH or WBTC must be at least 1250 Russian rubles.
For the issue of MCR, the platform charges a 4% stability fee of the amount of stablecoins issued. This stability fee is automatically deducted from the collateral the moment you return the MCR. It is impossible to return your collateral and not pay the 4% stability fee.
If the rate of the collateralized cryptocurrency falls and the percentage of collateral for your issued stablecoins falls below 125%, then you will still have MCR stablecoins. What happens to the cryptocurrency collateral in that case:
- the whole amount of the debt will be sold at auction to pay it off;
- 4% will be debited as a stability fee;
- 7% will be debited as a liquidation fee;
- the remaining collateral amount will be returned to the wallet.
What is MCR suitable for
First, you can fix some of your assets in stablecoins. To do this, you leave ETH or WBTC as collateral on the MonolithosDAO platform and create MCR stablecoins. If the rate of the collateralized cryptocurrency falls, then you will still have created stablecoins, which will retain their value. And if the rate of the collateralized cryptocurrency grows, then you can issue even more MCR stablecoins or withdraw part of the collateral to your wallet and use it in any other way. For example, you can spend these MCR stablecoins to buy more ETH or WBTC and earn profit on their growth. On the one hand, you protect your assets against a fall in the cryptocurrency’s exchange rate. On the other hand, you keep the opportunity to earn money on the growth of the exchange rate.
Secondly, if you trade on several platforms, you can transfer funds between them in MCR stablecoins. These stablecoins run on the Ethereum blockchain and are transferred faster than Russian rubles through the banking system.
MCR is the first decentralized stablecoin of the Russian ruble. Its value is secured by a cryptocurrency collateral on the MonolithosDAO platform.
You can issue MCR stablecoins yourself. To do this, you will need to leave a collateral in the smart contract of the MonolithosDAO platform in the amount of 125% of the amount of MCR stablecoins issued. In November 2020, ETH or WBTC are accepted as collateralized cryptocurrencies.
MCR stablecoins have 2 uses:
- protection against falling cryptocurrency rates;
- fast transfer of funds between cryptocurrency platforms.