Eric Su (AMA host at t.me/amaroom):
Welcome to the AMA of Defi Money Market. Here with us is Corey one of their co-founders.
Corey Caplan: It’s a pleasure to be here, Eric!
Eric: Can you introduce yourself? your role in the project too and all.
Sure thing. So I’m a software engineer by trade and have been involved in the crypto space since ~2015. Overall I spend my time building things, staying updated on the ecosystem and helping run operations.
Originally I worked on Dolomite, a DEX built on top of Loopring v2 which paved the way nicely from an experience perspective to work on DMM and build the protocol.
Right now, I’m the CTO of DMM and a co-founder of the project.
excellent! so in your own words. what is DMM?
To me, DMM is a protocol to earn stable interest on crypto-based deposits.
The way that we achieve the stable interest is the interesting part that we, as a team, are super excited about!
What is this Stable Interest?
Good question — to our team, our goal is to provide interest whose yield is good (many multipliers above typical money market funds or savings accounts in the traditional world) and whose rates don’t change for at least 12–18 months, allowing individuals to project forward with a high-degree of certainty of what their financial outlook may be.
How do you achieve this kind of yield?
We achieve this by tethering into real-world assets that have underpinned the financial system for many, many years, but bringing it to crypto to be able to take advantage of the benefits such a new and disruptive technology offers.
The yield is achieved specifically by looking for highly stable and low-risk subsegments of the market and building an ecosystem around them. The first was with vehicles in the US, which I’m happy to dive more deeply into.
Vehicles? interesting. why that first and what are others being considered next.
So the first thing I’d say is that it’s not to be confused with things like subprime lending. We actually are in the subsegment of “car equity lines of credit” in which the owner of the car must own it outright and actually uses the equity in the car to take out the loan. It’s the same process actually as Maker with CDPs in that the CDP owner must own their ETH and put it up as collateral to mint DAI. This segment in particular is 10s of billions of dollars in the US and showcases just one area in which we can operate.
Looking beyond vehicles, we’re looking at aviation and real estate as two top contenders to be tokenized next.
Won’t this involve more work for the org. compared to a fully digital asset?
Overall, there were a lot of benefits for us choosing vehicles as the first asset type. Between all of the cofounders, there’s about 40+ years of experience in working with this asset class and dealing with the nuances of tricky things like liquidations, expansion, digitizing and automating the process to drive down cost and lower risk, etc.
Makes sense now. So DMM is a DAO, can you explain what that is and why did the group decide to be under that form of organization?
Yes but we think it’s a necessary step to fully realize our vision.
Great question! We operate as essentially a fully digital organization or DAO, which grants some large benefits for us when it comes to operations.
For one, it allows us to onboard potentially massive and international communities to participate as well as align incentives. We are using our governance token, DMG, to do just this. It’ll serve as the glue that binds the community together to help govern the system appropriately.
What is the DMG token and what does it do?
The DMG token is a governance token that binds the entire DMM ecosystem together. At its core, it allows individuals to help come to important decisions that shape the ecosystem as well as reap the benefits of the system as it grows and operates efficiently.
For example, the revenue being generated by the DAO today will be issued to token holders as revenue.
Our plan is to run our first DMG-token-based vote toward the conclusion of our public sale for the token.
COMMUNITY CLAIMED QUESTIONS
Why are the rates for auto loans 6.25%+ ? My last auto loan was 2%. Why is Lien information like owner, VIN, etc. redacted? This information is supposed to be publicly available, any reasons for anonymization?
These loans, as I said earlier, are car equity lines of credit, like the Maker CDP I described earlier. The cost to take out one of these loans is much higher than the 6.25% we are paying, making it sustainable.
The lien’s personal information is redacted because of privacy reasons for the lien’s vehicle’s holder
Can you tell us about your collaboration with Chainlink?
How exactly will DMM Use Chainlink Oracles to Maintain a Fully Collateralized, Transparent, and Trust Minimized Money Market?
Chainlink is such an important piece to our ecosystem. Under normal circumstances, bringing this data on-chain would require a ton of trust in a centralized entity. Should this entity (in this case the DMM DAO) decide to act maliciously, it could crater the entire op.
With Chainlink, we are able to trustlessly and autonomously bring our data on-chain through their oracle network. The applications for this are extremely far and wide and the community will be excited to see the many ways we’ll work together to create trust in such a new area of DeFi.
Hello Mr @Corey3 , Can you explain How can the DMM Foundation manage portfolio assets?
The DAO is the entity that will run, manage, and sustain the project in the long run. It’s basically a digital organization in which the members contribute remotely to the organization’s success. Typically, it uses our protocol’s smart contracts to engage in trustless agreements with other parties or other DAO members to ensure sound operation.
Right now, the DMM Foundation is helping get the DAO off the ground. Think of them as “training wheels” for the bike basically. This allows for a smoother transition and the ability to be careful with such bleeding-edge tech and methodologies
In the tokenization strategy implemented in the DMM Project you use “mTokens” which allow that the balance of every depositor increase! Can you explain in more detail how mTokens work to make this possible and what role do they play in the interest stream?
mTokens are the representation of your underlying token balance, as it accrues interest in the protocol. So you are able to freely transfer, use, or trade mTokens. This makes them composable with the rest of the ecosystem.
Aura II Aksia: How do you evaluate the support from the community ? What is your strategy to marketing and for Mass Adoption ? What message do you want to send to community through AMA to day ?] #dmmama
Overall our strategy revolves around the alignment of incentives and usage of DMG + mAssets to bind the community together.
Regardless of your individual skillset, there are a number of ways for people to get involved with our project and play a role. As we mature, the action of doing w/e role it is becomes increasingly more valuable because of the value being provided back to the ecosystem via DMG/mToken.
Overall, I think the call to action for community growth is simple, because our protocol is just earning interest at the end of the day. However, earning interest is a beautiful thing when things work smoothly and keeps the system attractive!
What is the biggest challenge DeFi Money Market Ecosystem wants to solve? And what is the purpose?
The biggest challenge we want to solve is offering greater financial inclusion and democratization of access to capital.
Each area of the world has its own unique challenges with access capital. Some are systemic problems, while others are circumstantial. Overall, we think the use of crypto and running as a DAO enables us to have a more efficient and broader reach than any other similar traditional company on the planet.
What happens in the scenario that a vehicle below liquidation level cannot be reclaimed? How is the event of default handled ?
This part is actually handled by a loan servicer and not the DMM DAO. In case of default, the servicer would trivially reposes the vehicle and sell it to recover the principals + interest. Because one of our critiera for taking on an asset is the loan’s value must be less than the value of the asset, we can guarantee the ability to recover funds in case of default.
What are the ways for DMM project to generate revenue in the long run? What is the progress of business development and what are some of your commercial partnerships? #dmmama
Revenue generation is really simple. The more we grow mTokens, the more revenue we can generate.
What’s nice is that minting and holding mTokens is as simple as wanting to earn the interest that’s offered by the protocol. It’s not like opening a Maker CDP in which you may want to lever long on ETH cause of the current sentiment in the market. Quite different. We view our solutions as much more universal (although of course Maker’s has merit and a strong use case, just different)
The opening of 2020 is very chaotic considering coronavirus broke out globally, all kinds of assets experienced significant shocks.What do you think about the influence of this toward defi?
I think it’ll naturally bring more people into the system. People are seeing the problems w/ traditionally ran systems. In the US, stimulus checks were sent to the wrong people, deceased people, some people got it twice, etc. There’s very little transparency or accountability. DeFi fixes that and offers a better/safer yield, for the most part, over traditional finance.
Can you share some more insights on DMM as to the long term plans of the project keeping in mind the stakeholders interest & adoption in the real world without compromising on regulatory front?#Dmmama
The long-term really focuses on protocol sustainability as well as a healthy model running for the Principals and Affiliates we elude to in the upcoming token economics doc we’ll be releasing soon.
Essentially, these Principals and Affiliates are responsible for being the gatekeepers of introducing new assets. Keeping them properly incentivized to introduce and help manage inbound of new assets is paramount. As such, we’re dividing them by geographic region so they can remain experts of regulatory, operations, etc. for their particular area.
This idea of Principals and Affiliates was taken from Greg’s time at Mastercard and seeing how well their company runs on a global scale while continuing to grow and capture the market.
What is the spotlight of Dmm to convince users to invest in long-term investments? #dmmama
I think the nature of the project being long-term will naturally influence that. The fact that contracts that bind real world assets to their payments are > 1 year in duration and other aspects of the project will make it inherently clear that there’s value in staying in the long-run
How the integration with #Chainlink will introduce more transparency to the end-to-end process? #dmmama”
For this, Chainlink is heavily used for watching the movement of funds from end-to-end in the process. Additionally, it’s the independent service provider that can take the real-world assets that we have contractual rights to, and publish them on-chain to be verified so people can trust the data’s value
How does DMM plan to successfully attract investors and traders? What is DMM’s strategy for that?
Having multiple years of experience running and building a DEX, I can confidently say this will be a fun area of the project to tackle. We understand not just the importance but also what’s required to keep the token liquid, safe, and widely accessible. While we can’t make 100% gaurantees with it for obvious reasons, we have market making bots, pools, etc ready to be deployed post-sale to kick off a liquid and safe secondary market.
This is important for other areas of the project to be successful, like the DMG Principals and Affiliates that need to purchase large chunks of DMG to participate.
What are the biggest obstacles to your project when you implement it to the real world, and what is your plan on overcome these problems ?
I’d say some of the important ones mainly boil down to decision making of deciding which areas of the world to tackle first that offer strong yield while hitting our strict criteria for listing assets.
Greg has been fantastic with identifying unique opportunities and bringing a lot of different potential deals to the table. His days as the CEO between a Mastercard and Telefonica joint venture really came in handy.
On the other hand, it’ll be a challenge to bring together incentives in such a new way to build this kind of DAO. While the revenue/growth path for the DAO is clear, building it will be difficult yet rewarding. We’re up for the challenge!
How does DMM understand the development of public chains? What is DMM development based on these insights?
Directly, no. But that’s okay because our specialty isn’t in creating layer 2 solutions for scaling,. We’re hyper focused on our mission and delegate other problems beyond that to the talented teams in the space.
With that being said, we’re working closely with Loopring and it could be feasible to leverage their scalability tech in the future.
For Me, Security is most important /.. So the que is — What are the security measurements of dolomite Platform? How we can trust on dolomite Platform in terms of Funds Security ?
I think the security problems, for the most part, are a result of poorly engineered projects that haven’t been well-reviewed or audited prior or during launch. Aside from having many years of experience doing software engineering, it’s our responsibility to stay updated on the latest with smart contract development as well its problems so we can avoid facing similar issues.
We engaged SECBIT to do a full audit of our system and we took that auditing process very seriously. For us, it wasn’t a similar marketing spend of using an audit to be attractive. The audit report adequately highlights the careful considerations that were made to keep the protocol usable and secure.
What is the DMM concept?
How was it designed?
It was designed to be as simple and usable as possible. The mToken’s are easy to interact with, have a ton of uility, and play well with other dapps.
The DMG token has a clear growth model as well that’s a function of our network size.
There are lot of Project with the same Mindset,
How will You make the DMM Ecosystem as trust-minimized, transparent & permissionless?
We see the trust-minimized part as being the most difficult part of the process because we deal with real-world assets. Our general approach is self aware because we know how difficult it is to be trust-minimized and play in the real world. That’s why we think a truly decentralized DAO could pull it off when it plugs into the right connections
Can you explain how Decentralized Leverage works, especially in defi? Can other dApps associated with your services be built from your DeFi?
Decentralized leverage doesn’t relate to our project because we aren’t in the business of offering leverage.
On the other hand interacting with our dapp is *extremely* easy because all aspects of the protocol are tokenized. This allows our tokens to be used in a wide variety of systems quite seamlessly
Mít Tơ Trader:
I so exciting with DeFi so can you explain what are the Importance of a Oracles in the DeFi Ecosystem?
I touched on this lightly earlier but oracles are *the* thing that allows us to take our off-chain data about the real-world assets and push that data to the DAO, on chain, in a trustless manner.
It’s the thing that allows us to work with all of the DAO holders and community members without having to natively trust each other, because the smart contracts + oracles handle this for us.
Why aren’t tokens pegged 1:1 with mtokens? If i have to spend 1.02 USDC to get 1 mUSDC, I’m not really making 6.25% interest since my mUSDC cost is higher. Also, the 2 token prices fluctuate which ca be an issue when it is time to convert back.
The exchange rate between the mToken and the underlying token actually is irrelevant when it comes to accruing interest. If you are able to swap 1 DAI for 1mDAI or 0.00001 mDAI, all that matters is that after 1 year, the mDAI is worth >= 1.0625 DAI.
That’s how the tokens work. The exchange rate changing allows for time to be accounted for with interest payments
Have you looked at Band or Tellor too?
We explored Band briefly but it didn’t seem cover as many use-cases as we needed. We, as individuals, had a long-standing relationship with the Chainlink team too which made us feel confident that they’d be able to deliver on new feature requests (and trust me, there were/are a lot of those) so we can build out our solution in the most optimal way. As opposed to having to cater to the oracle provider itself.
Ok! @Corey3 Thanks for this AMA. Congrats on the closing of the private sale. They raised $2m in 8 days folks!
Public sale is when?
Thanks!! And it’s on June 22. It’ll be hosted on dmg.defimoneymarket.com and mesa.eth.link
The DMG dashboard will migrate to our governance dashboard. The trading is powered by Loopring/Dolomite and Mesa was created by Gnosis and is ran by the dxDAO.
The dxDAO is a decentralized org (DAO) that we’re working closely with to enrich the governance and decentralization of the project. We gave them a grant in DMG to get them involved and we’re happy to be working with them!
Please invite the AMA room fam to your official tg and twitter.
Sure! Our Telegram is https://t.me/DmmOfficial
And Twitter is https://twitter.com/DMMDAO
Happy to engage with you all further outside of the AMA. We’re actively growing and excited by the community that’s forming around us :)
Thanks @Corey3 great project and glad we have dived deep in it today
Thanks to everyone for participating!