MAI (MIMATIC) is a locked-collateral and non-custodial stablecoin. That means MAI holders own and control the funds.
To explain, they back the MIMATIC stablecoins with approved collateral or vaults. Approved collateral includes static tokens such as Chainlink (LINK) and Curve (CRV), and DeFI assets such as Beefy Finance (BIFI), Yearn Finance (YFI), and AAVE (AAVE).
Users can make MAI by depositing collateral in vaults and minting MAI against it. They will not charge on vaults that mint MAI. Vaults can hold MAI debt long-term without accruing costs.
How MAI (MIMATIC) retains its value
They peg MAI to the US Dollar through interest bearing stable collateral vaults. To keep MAI’s dollar peg they increase the debt ceilings for stable vaults. In contrast, stablecoins such as Tether (USDT) are pegged to fiat currency they hold in bank or trust accounts.
MAI holders can engage in risk-free arbitrage through Anchor if the MAI price falls below 99₵ or rises above $1.01. They set the liquidation ratio at 150% to ensure that a minimum collateral to debt ratio.
To give MAI value, they overcollateralize the vaults at rates of 130% to 150% depending on assets. Ideally, that means that assets will always back MAI stablecoins. Hence, the developers claim they can issue more stablecoins as the collateral value falls and fewer stablecoins as the collateral value falls.
Plus, Mai’s collateral to debt ratio decreases when the market price falls and increases when the market price increases.
Anchor allows uses to mint MAI with stablecoins and redeem stablecoins through MAI. Anchor collects a 1% minting fee when you create a MAI. There is a ceiling of $1.01 and a floor of 99₵ to keep MAI’s price close to the US Dollar.
Similarly, they claim that if MAI’s price falls to 95₵, a MAI user can buy MAI with USD Coin (USDC) and sell it to the Swap for 99₵. Thus the MAI user can make a 4% profit by selling MAI.
What is Mai Finance?
They built MAI with the QiDAO Protocol. Mai Finance is the frontend/dashboard for the QiDAO Protocol. Mai Fiance is an open-sourced and on-custodial stablecoin protocol for extracting value from priced assets.
QiDAO is a decentralized autonomous organization protocol that allows users to hold crypto but spend its value. They call QiDAO an overcollaterialized stablecoin protocol. The builders claim QiDAO is not an algorithmic stablecoin.
Users can borrow stablecoins at 0% interest through QiDAO without selling crypto. Plus, users can leverage crypto positions through QiDAO.
Users can borrow stablecoins at 0% interest through QiDAO without selling crypto. Plus, users can leverage crypto positions through QiDAO.
Some assets MAI leverages include wETH (WETH), Bitcoin (BTC), and Aavegotchi (GHST).
What Value Does Mai Finance offer?
The claim Mai Finance had $75.702 million in assets on 25 August 2022. Those assets included $8.332 million in Fantom (FTM), $28.234 million worth of Polygon (MATIC), $4.169 million worth of Avalanche (AVAX), $442.793 worth of Cronos (CRO), and $4.864 million worth of Moonriver (MOVR) on 24 August 2022.
CoinMarketCap gave the MAI (MIMATIC) stablecoin a 99.95₵ Coin Price, and a $126,175 24-Hour Market Volume on 25 August 2022. MAI was CoinMarketCap’s 3,670th largest cryptocurrency on 25 August 2022.
In contrast, CoinGecko gave MAI (MIMATIC) a 99.245₵ Coin Price, a $54.077 million Market Cap, and a $333,337 24-Hour Trading Volume on 14August 2022. They based those numbers on a Circulating Supply of 54..330 million MIMATIC and a Total Supply of 297.902 million MIMATIC.
How MAI could achieve widespread use
I think MAI (MIMATIC) is an interesting stablecoin that could offer enormous value because it allows people to use stablecoins as collateral for lines of credit. I think MAI could offer enormous value if it achieves widespread use.
I believe MAI could achieve widespread use because people want to make purchases with stablecoins. Yet, there are no good ways to use many stablecoins that make purchases. Hence, MAI could solve a genuine problem and offer a service real people can use. In particular, MAI could create stable pricing structures for NFT marketplaces, games, or blockchain stores.
For example, people could use MAI to make purchases from ecommerce platforms. Additionally, blockchain projects could use MAI to pay contributors or freelancers in spendable money.
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