The stablecoin, which are currencies pegged 1-to-1 with major fiat currencies or other real-world assets, is supposed to remain close to the $1.00 price point so that traders or investors may take advantage of yield farming opportunities while keeping interest rates relatively low.
The MOR tokens may be minted via a stablecoin using a fixed or pre-determined exchange rate or by offering collateral in the form of regular tokens and vault tokens with their specifications, depending on the risk level of the underlying token itself.
Providing Greater Capital Efficiency
The primary purpose of MOR is to provide greater capital efficiency so that users may utilize it to enter a long position on supported collaterals. This may be particularly useful for yielding collaterals because users basically get paid to borrow funds.
MOR is issued by borrowers who want to obtain a loan using their cryptocurrency holdings as collateral. MOR may be utilized for various other business activities such as taking positions on certain yield farming opportunities.
There are three key ways in which the token holder can make profits for buybacking Wheat and GRO.
- Mint/Redeem Fees: Each time that MOR is minted or redeemed, a relatively small fee is applied.
- Stability Fees: These are the borrow rates that traders have to pay when issuing MOR using their collateral.
- Liquidation Buffer: Every time a user gets liquidated, more MOR gets burned than the amount that had been minted when the user first opened up the position. This approach increases the system surplus.
The developers of MOR claim that it’s the first stablecoin that may be borrowed or minted with tokens that are generating yield as collateral. For instance, a trader may take their yield-earning stkCAKE tokens to borrow MOR. After that, they can use their MOR to acquire additional CAKE tokens, stake them for more stkCAKE. What is more, traders can simply repeat the process until their preferred risk level is reached — without requiring additional funds or capital to obtain that extra stkCAKE.
MOR might also be quite suitable for individuals interested in holding stablecoins: With a 102% minimum collateralization ratio on stable pairs (50x maximum leverage), traders can join in and convert a standard sub-10% yield on stablecoins into hundreds (even thousands) of percentage points APY.
For instance, for stkBUSD/USDC on PancakeSwap LP, with a typical yield of 10% APY, the Minimum Collateralization Ratio is 102% (50x maximum leverage) — which means the max yield with 50x leverage will be around 1,180% APY for users’ stablecoins.
BSC-based WHEAT Vaults Audited by ConsenSys Diligence
MOR utilizes the vault structure of Growth DeFi’s Wheat vaults. MOR x WHEAT is developed to have a certain revenue structure that aims to support buybacks and burns of WHEAT & GRO (the governance token of the ecosystem).
Although the firm aims to focus on MOR, it may be worth noting that Wheat, their yield optimizer, might be the only multi-layered yield optimizer in the market. This means that Wheat has been developed on top of other yield optimizers (PCS and Autofarm, for example).
This enables Growth DeFi vaults to Compound on a more frequent basis from multiple sources, which means they can generate considerably higher APYs compared to major yield optimizers (like Autofarm, Bunny, Beefy, to name a few).
Growth DeFi has been keeping track of their APYs and their competitors’ APYs since Wheat’s launch in April, and Wheat has shown to be significantly more sustainable and consistent. It also offers greater APYs when compared to the various other yield optimizers (at times, it can be more than 50% APY higher).
Especially notable is that Wheat has been audited by ConsenSys Diligence, the auditing company that carried out audits for AAVE, Bancor, Uniswap, and 1inch.
The audit was carried out over an extensive 3-week period and was quite rigorous and comprehensive. The changes recommended by ConsenSys are now incorporated into the vaults with the introduction of MOR. However, it should be noted that there were no serious issues identified by ConsenSys that affected users’ funds.