To help understanding Standard protocol, Alice, a cryptocurrency holder is introduced. Just like MakerDAO's vaults, Standard generates its stablecoin meter(MTR) by collaterizing other digital assets. One of the key ways a Vault owner can use the Meter(MTR) she generates is to purchase more collateral—typically DOT. If the price of DOT increases, the Vault owner stands to profit. She can also borrow from the Vault as a form of decentralized leverage. Because Standard Vaults require a minimum of 150% collateralization, the maximum leverage available is 3x, not taking into account transaction fees or slippage.
Consider the following paraphrased from MakerDAO's example:
Assume one DOT is $100. Alice deposits 15 DOT, worth $1,500, to her Vault. She generates 1,000 Meter(MTR) against it (the maximum possible given the 150% collateralization requirement), and then uses the Meter(MTR) generated to purchase 10 DOT, which she deposits back into her Vault.
Alice can now generate a further 667 Meter(MTR) against the extra $1,000 in DOT collateral. Purchasing $667 of DOT allows her to generate a further 444 Meter(MTR). Repeating this process provides a further 296 Meter(MTR), then 198 Meter(MTR), 131 Meter(MTR), 88 Meter(MTR), and 59 Meter(MTR). Ultimately a total of 1,500 Meter(MTR) can be generated against the original 15 DOT, enabling Alice to leverage her initial stake by 200%.
The risks of falling DOT prices are also amplified; if Alice does not keep her Vault adequately collateralized in a right amount of time, it will be liquidated. Hopefully, the Its contents are auctioned, but Standard approaches different way to process the collateral.
In addition to recapitalizing a Standard Vault with generated Meter(MTR), the token can be used to make purchases. One option is to use Meter(MTR) to purchase other cryptocurrencies in Meter(MTR) market in a cheaper price than those available from Hydra dx.
Why are digital assets cheaper from meter market than other exchanges?
Because liquidations from expired vault goes to markets, Meter(MTR) holders can purchase other digital assets in cheaper price.
Or you can hold/earn, spend, donate, lend, and trade Meter(MTR). The community will grow with teams that provides use cases of Meter(MTR).
Visit our Discord to discuss for a comprehensive list of services that allow you to hold/earn, spend, donate, lend, and trade Meter(MTR).
Support the Meter Economy
Aiming to become the most-used cryptocurrency in the Polkadot DeFi space, Meter(MTR) will become a gateway to a wide range of initiatives, from financial services to charities. Engaging with the many different products and services that have integrated Meter(MTR) offers opportunities to help you manage and trade your crypto assets, as well as develop and expand the Standard ecosystem and the crypto sector as a whole. Simply by spending Meter(MTR) you are adding liquidity to the token, growing the global Meter(MTR) economy, and raising the profile of Meter(MTR) and its many advantages over conventional alternatives:
Decentralization. Meter(MTR) is transferred peer-to-peer to anyone, anywhere in the world, with no third-party interference.
Accessibility. Anyone with an internet connection can access Meter(MTR) via various wallet solutions in Polkadot ecosystem, including Mathwallet, Speckle, etc.
Speed. Transactions generally take just a few seconds with PoS network.
Low cost. Transfer fees are typically just a few cents.