Top Things You Should Know About DeFi Money Market (DMM)

Top Things You Should Know About DeFi Money Market (DMM)

By MuyAsk | Crypto Truth Lexicon | 19 Aug 2020


Hey guys :) I’m back with another comprehensive Q&A piece, this time for the decentralized financial contracts platform – DeFi Money Market (DMM).

DMM – short for DeFi Money Market – is an Ethereum-powered DeFi protocol that empowers anyone to earn a positive yield (interest) on digital assets backed by a basket of real-world assets brought on-chain into the DeFi space.

Now, before we dive in, the following piece is similar to my latest articles on UMA (UMA), Gnosis (GNO), and Ethereum (ETH), so if you haven’t already seen those, be sure to check them out as well. 

Hope you enjoy!

The list of Q&A is kind of long so first comes the list of questions that I have prepared the answers to:

  1. What is DeFi Money Market (DMM)?
  2. Who and When Created DMM?
  3. What is $DMM Token Used For?
  4. What is mDAI, mUSDC & mETH?
  5. Where does the stable income for DMM Ecosystem come from?
  6. What are some notable DMM Partnerships & Integrations?
  7. Where to Store $DMM?
  8. Where to store mAssets?
  9. Where to Buy & Sell $DMM and mAssets?

1. What is DeFi Money Market (DMM)?

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DeFi Money Market website homepage

Defi Money Market (DMM) is a trust-minimized, transparent, and permissionless protocol that empowers anyone to earn interest on any Ethereum digital asset, backed by a basket of interest-generating real-world assets represented on-chain.

What sets DMM apart from other interest-paying or “yield farming” DeFi protocols is that its users earn interest on crypto through revenue-producing real-world assets (ie. car equity loans, real estate, construction, aviation, etc.) 

The way it works is: 

The DMM platform and ecosystem enables real-asset owners to tap Ethereum digital asset owners for funding, which allows these digital asset owners to lend out their crypto to gain exposure to uncorrelated passive income.

And the benefit for the real-world asset owners is that they get to engage in collateralized borrowing at more competitive rates with a global permissionless reach.

Explaining further:

In the DMM ecosystem, the real-world off-chain assets (like car loans) are brought on-chain with the minting of mTokens, which are transparently backed by these real-world assets. The Ethereum digital asset owners (ie. you own some ETH or DAI) can then lend them out and earn interest by swapping their digital assets for mTokens such as mETH or mDAI.

Both the mTokens and the interest revenue generated from these assets are overcollateralized, thus protecting depositors.

As mTokens are backed by real-world assets, they can offer users a much more stable and reliable ROI on their deposited funds (currently DAI, USDC, ETH) at a stable 6.25% APY. This is what really sets DMM apart from many other on-chain money markets that offer variable interest rates driven by leverage trading. 

Moreover, it should be noted that the backing of mTokens and their valuations can be transparently found on-chain via the DMM Explorer

Additionally, DMM further enhances its security and trust by using Chainlink’s decentralized oracles to bring essential data on-chain that details the ecosystem’s valuation and total active collateralization. 

2. Who and When Created DMM?

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DMM Foundation – Creators of DMM

DeFi Money Market was created by the DMM Foundation in September 2019 and the project’s native governance token $DMG launched on June 24, 2020, via a public token sale. 

The DMM Foundation is an organization comprised of a unique mix of seasoned global experts in Fintech, DeFi, Venture Capital, Governance, Legal & Regulatory, and Academia.

The CEO, Founder, and Board Director of the DMM Foundation is Gregory Keough, a highly educated and experienced professional who’s committed to fixing our broken financial system through the power of DeFi and blockchain technology. 

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(Source)

Keough is a seasoned global executive and entrepreneur with 25+ years of global experience in the digital innovation sector. He’s worked in both large enterprises such as CEO of MasterCard & Telefonica JV.

Prior to founding the DMM Foundation, Keough served as the Founder and Chairmen for the Institute for Blockchain Innovation – a think tank composed of global pioneers in the Digital Securities and Blockchain Payments space. He also founded Blockchain Credit Partners in 2019 and served as the CEO, Chairman, and/or Founder in various other notable companies too. 

Another attribute worth highlighting is that Keough is fluent in both English and Spanish and has over 20 years of experience working in emerging markets internationally and in developing new digital business models and platforms. 

And to top it all off, Keough is one of the few living recipients of the Central Intelligence Agency's (CIA's) Intelligence Star Medal for extraordinary courage in the line of duty.

DMM Investors and Backers

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Notable Investors; Draper, Goren, and Holm (Source)

Not only does DeFi Money Market have a uniquely diverse and impressive team of members in the DMM Foundation, but it’s also backed by world-class investors including Tim Draper, Alon Goren, Josef Holm, and Stephen McKeon.

These investors are also actively involved with the project and have been backing DMM and working with the team since very early on. 

Tim Draper is a notable billionaire investor known for his investments in technology startups, Bitcoin, and the cryptocurrency space. Draper is the founder of multiple venture capital funds including Draper Fisher Jurvetson (DFJ), Draper Venture Network, Draper Associates, and Draper Goren Holm.

The latter fund, “Draper Goren Holm”, is also co-founded by the other investors included in the name and it’s the fund that’s actively and financially invested in DMM.

3. What is $DMG Token Used For?

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DMM DAO Governance Token (DMG) logo

The native cryptocurrency of DeFi Money Market (DMM) is its DAO Governance Token $DMG

DMG is primarily used as the tool through which the community governs and grows the DMM ecosystem and the underlying protocol. DMG plays a critical role in ensuring the broad participation of DMM’s global community and is essential to mitigating centralized governance risk.

More specifically, DMG effectuates the governance of the ecosystem via the DMM DAO (Decentralized Autonomous Organization), which has control over DMM’s Ethereum smart contracts and its digital assets.

DMG token holders earn the right to govern the parameters of the DMM Protocol as well as governance rights when it comes to decisions regarding the introduction of new assets to the ecosystem.

Additionally, the decentralized community of DMG token holders participating in the governance of the DMM DAO can vote to modify the DMG tokenomics and utility. An example would be to introduce, and vote on, a claim on the excess revenue generated from within the DMM ecosystem. 

Moreover, it should be mentioned that the DMG token is a fork of Compound’s COMP governance token but with added capabilities such as meta-transaction support and a native burn function.

4. What is mDAI, mUSDC & mETH?

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mDAI, mUSDC, and mETH are interest-bearing synthetic tokens that give you exposure to the 6.25% interest that DMM offers. 

When a user deposits ETH, USDC, or DAI into the DMM ecosystem they receive its corresponding mToken. All mTokens are backed by interest-generating real-world assets which initially include car equity loans and will later include assets in aviation, construction, real estate, and more.

mTokens are backed by these real-world assets because when a user deposits crypto funds into the DMM ecosystem, they are converted to fiat and used to transparently purchase a basket of interest-generating real-world assets. 

Currently, this process is centrally performed by the DMM Foundation but the long term goal is for this to be managed by the DMM DAO.

Moreover, mAssets such as mDAI and mUSDC can be swapped back into their original crypto asset at the same value they were sold for. For mETH, however, since ETH is not a stable asset but rather volatile, you will not lose exposure to the ETH once you go from ETH to mETH or during the time that you collect interest.

5. Where does the stable income for DMM Ecosystem come from?

The stable income from the DMM ecosystem comes from interest-generating real-world assets. When a user deposits crypto funds into the DMM ecosystem, they are converted to fiat and used to transparently purchase a basket of interest-generating real-world assets. 

Currently, these assets are limited to car equity loans but will later include assets in aviation, construction, real estate, and more. 

The purchasing of these assets are transparently viewable at the DeFi Money Market Explorer seen here:

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As seen in the screenshot above, you can see various statistics of the DMM ecosystem including 

  • Collateralization levels (all assets are over collateralized to protect depositors)
  • The value of all active assets - $8,792,879
  • The current interest rate paid out to holders of mAssets - 6.25%

Below these stats is a long list of real-world assets (currently car equity loans) that are currently building interest for mAsset holders in the DMM ecosystem:

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In the screenshot above, you can see quick stats on the interest-bearing real-world asset including:

  • The loan ID
  • Last 6 numbers of the vehicles VIN 
  • Status of the loan
  • Value of the active asset
  • Details of what the asset is

Also, you can view the lien (claim or legal right against assets) here as well:

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Since the interest-bearing assets in the DMM ecosystem are real-world assets, DMM offers investors a much more stable and reliable ROI on their deposited funds than existing DeFi applications such as Compound or Aave, which largely depend on cryptocurrency leverage trading.

6. What are some notable DMM Partnerships & Integrations?

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DMM has the following partnerships and integrations:

  • Huobi
  • Chainlink 
  • Draper Venture Framework
  • Coinbase
  • Fortmatic
  • Portis
  • Trust Wallet
  • Dubai International Financial Centre
  • dxDAO
  • Totle
  • Blocknative
  • Zerion

Details of some of the most notable DMM partnerships and integrations are summarized below:

Chainlink
(source)

DMM is using Chainlink’s decentralized oracles to reliably and securely obtain accurate information about the real-world interest-bearing assets that back mAssets and publicize it on-chain.

Chainlink has two roles in the DMM ecosystem:

  1. Tracking the conversion of cryptocurrency loans to fiat currency 
  2. Documenting on-chain how that fiat is allocated to real-world assets to produce income

Coinbase
(source)

DMM has partnered with Coinbase to enable users to seamlessly connect their Coinbase Wallet mobile app via WalletLink to the DeFi Money Market and earn a stable 6.25% from interest-generating real-world assets. 

Draper Venture Framework
(source)

Tim Draper's venture studio has purchased a stake in DMM's governance token. In a statement the billionaire investor said:

“Many crypto and traditional investors are looking for stable, secure passive income. Gregory Keough and the team at the DMM Foundation leverage blockchain to allow users to earn passive income.”

7. Where to Store $DMG?

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DeFi Money Market app (source)

DeFi Money Market’s DAO Governance Token (DMG) is an ERC-20 token residing on top of the public Ethereum blockchain. That said, you can store DMG in any ERC-20 token supported wallet.

However, the best wallets for storing DMG are non-custodial Web3 wallets that provide seamless access to the latest DeFi applications. More specifically, Web3 wallets that seamlessly connect with the native DeFi Money Market dapp. 

Popular DMM (DMG) DeFi Wallets:

  • Coinbase Wallet (mobile)
  • Metamask (web)
  • Trust Wallet (mobile)
  • Argent (mobile)

In addition to the above-listed wallets, DMM (DMG) can be stored on a wide variety of other reputable wallets supporting ERC-20 tokens.

8. Where to store mAssets?

All mAssets are ERC-20 compliant tokens that can be easily stored, managed, and transferred from any standard Ethereum wallet. That said mAssets can be stored in any of the popular DMG wallets listed above and many more ERC-20 token supported wallets. 

9. Where to Buy & Sell $DMG and mAssets?

DMM (DMG) can be bought and sold on a peer-to-peer (P2P) basis but the most popular way to buy, sell, or trade DMG is through cryptocurrency exchanges.

You can buy DMG with cryptocurrency or fiat currency at the following top exchanges. In most cases, you will be able to buy DMG with ETH or stablecoins.

  • Uniswap - WETH, USDT
  • Balancer - WETH, JRT
  • 1inch Exchange - ETH, USDT
  • OKEx - USDT
  • FTX - USD, USDT

In addition to the exchanges listed above, DMM (DMG) is also traded on a few other exchanges and platforms that enable people to buy, sell, or trade cryptocurrencies.

Where to Buy & Sell mAssets?

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DeFi Money Market app (source)

mAssets can be bought and sold (swapped) via the DeFi Money Market App. Using the app, users can simply connect their Web3 cryptocurrency wallet (such as metamask) and swap ETH to mETH, DAI to mDAI, USDC to mUSDC, and vice versa. 

The DMM app has an intuitive user interface that’s simple and easy to use, allowing users to swap between crypto-assets and mAssets in mere seconds. 

Hope you enjoyed that read :) Let me know if I have missed something in the comments.


MuyAsk
MuyAsk

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