MOR is a relatively new stablecoin, or digital asset pegged 1-to-1 to widely-used fiat currencies, that has been deployed on Binance Smart Chain or BSC. MOR aims to be soft-pegged to the US dollar via different incentives and supporting mechanisms. A soft peg means that the stablecoin should be approximately equal to 1 USD, though not always exactly.
The MOR stablecoin is expected to maintain a fairly close peg to the $1.00 price point, which is required so that traders are able to leverage up on yield farming opportunities, while also maintaining considerably low, fixed interest rates. The digital tokens are minted via a stablecoin using a set exchange rate, or by providing collateral via standard tokens or vault tokens with their own set of guidelines, depending on the level of risk of the actual token.
The primary goal of MOR is to achieve greater capital efficiency, so that investors may utilize it to leverage up a long position on supported collaterals. This is quite useful for yielding collaterals because users are actually getting paid to borrow assets—which is something users might not find in the traditional financial space.
MOR Stablecoin May be Used for Wide Range of Economic Activities
Stablecoins have grown tremendously in terms of their market cap and overall rate of adoption because they allow crypto investors to engage in transactions in a seamless manner.
As explained by its developers, MOR gets minted by borrowers interested in acquiring loans with their digital asset holdings serving as collateral. MOR may be used for various economic activities like leveraging strategic yield farming positions.
According to its development team, there are three main ways in which the token can generate profits for buybacking Wheat and GRO.
- Mint/Redeem Fees: After MOR is minted or redeemed, there’s a small fee that’s charged.
- Stability Fees: These are essentially the borrowing rates that traders need to pay when issuing MOR with their collateral.
- Liquidation Buffer: After a particular user is liquidated, additional MOR tokens get burned and the number of such tokens removed from circulation is more than what was minted when the user had opened up their position. This process aims to increase the system surplus.
MOR’s developers say that it’s the very first stablecoin that may be borrowed or minted with tokens that are currently generating yield as collateral. For example, a user may take their yield-earning stkCAKE tokens, borrow MOR tokens with them, use their MOR to acquire additional CAKE tokens, stake them to obtain stkCAKE, and simply repeat these steps until their preferred risk level is reached— without having to acquire additional capital to obtain that extra stkCAKE.
MOR Is Suitable for Long-term Stablecoin Holders
MOR is particularly suitable for users who are interested in holding stablecoins: It has a 102% minimum collateralization ratio for stable pairs (50x maximum leverage). This enables users to easily jump in and go from a 10% yield on stablecoins into “hundreds, even thousands, of percentage points.”
For stkBUSD/USDC on PancakeSwap LP, the typical yield is around 10% APY, the Minimum Collateralization Ratio is 102% (50x maximum leverage). That basically means that a users’ maximum yield with 50x leverage will be approximately 1,180% APY for their stablecoins.
WHEAT vaults are notably the only BSC-based initiative that has been carefully audited by ConsenSys Diligence (MOR utilizes these vaults for yielding collaterals). Currently the contract portion of MOR is being audited by HashEx. Once this is complete, MOR will be a fully-audited protocol. MOR x Wheat are developed to have a robust revenue structure that is able to seamlessly support buybacks and burns of WHEAT & GRO (the ecosystem’s governance token).
While the firm intends to focus on MOR, it may be worth pointing out that their yield optimizer, Wheat, is the one of the only multi-layered yield optimizers currently available—which means that Wheat is created atop other yield optimizers such as PCS and Autofarm.
This enables Wheat vaults to compound on a more regular basis, and thus provide considerably greater APYs compared to major yield optimizers like Autofarm, Bunny, and Beefy.
Providing More Sustainable APYs
Growth DeFi has been tracking and publishing their APYs and the competitors’ APYs since Wheat’s launch in April, and Wheat has demonstrated that it has a far more sustainable and significantly greater APYs than various other yield optimizers (sometimes over 50% APY).
As mentioned, Wheat has been audited by ConsenSys Diligence, which is the same auditing firm that performed audits for Uniswap, 1inch, AAVE, and Bancor.
Wheat is notably the only BSC initiative that has undergone a ConsenSys audit. The audit was scheduled over a 3-week period and was quite extensive. The changes that have been suggested by ConsenSys will now be included with the upcoming launch of MOR, but there were no major issues identified by ConsenSys during their inspection.