Published on 
16 April, 2021

Stablecoin Protocol improvements

Money on Chain continues evolving and fulfilling its roadmap to be a standard as a decentralized stablecoin platform for bitcoiners.

This is the reason why Money On Chain is introducing some changes to improve the protocol to better serve the users, making Money On Chain tokens even more attractive.

Disclaimer: This post contains a mention of the leveraged position BTCX, which was removed from the protocol to simplify the Money On Chain model through its decentralized governance process. To learn more about it, we recommend reading the publication Simplification of the Money On Chain model

To make these changes smoother for the user, they are implemented in three progressive stages.

You may be interested in: What is a stablecoin and why is collateral more important than interest rates?

Free redemption rate

The first one has already been done, the FREE REDEMPTION RATE that users had to pay when redeeming DoC or RDOC outside of the settlement has been removed. This is a big incentive for users to adopt the Dollar On Chain Bitcoin Stablecoin (DoC) and Rif Dollar (RDOC). 

Proportional interest rate

The second change will happen in April’s settlement: every time you redeem BTCx or RIFX, the proportional interest rate for pending days until settlement will not be discounted anymore.

Daily settlement

The last improvement is estimated to be implemented in July’s settlement, BTCx and RIFX won’t expire anymore. The BTCx and RIFX leverage will be corrected once a day and the interest rate will be variable, paid every day. This also means that the BTCx interest rate will be such that BPro leverage will tend to 1.1 (same with RIFX and RIFPRO). When BPro leverage goes below 1.1, BTCx rates will rise and vice-versa (same with RIFX and RIFPRO), giving an extra incentive for users to mint BTCx and RIFX while lowering the risk for BPro and RIFPRO hodlers.

These changes in the Protocol make the BPro and RIFPRO leverage tend to 1.1, the DoC and rDoC no longer pay the Free Redemption Rate, and the BTCx and RIFX have a fixed leverage, which drastically reduces the chances of being liquidated, as it would require the price of BTC and RIF, respectively, to drop 50% in a single day.

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