Dollar-pegged stablecoins have become an essential part of crypto due to their lack of volatility as compared to tokens such as Bitcoin and Ether. Users are comfortable with transacting using stablecoins knowing that they hold the same amount of purchasing power today vs. tomorrow. But this is a fallacy. The dollar is controlled by the US government and the Federal Reserve. This means a depreciation of the dollar also means a depreciation of these stablecoins - lowering your purchasing power in real life and metaverse.
MAMA DAO aims to solve this by creating a non-pegged stablecoin called MAMA. By focusing on supply growth rather than price appreciation, MAMA DAO hopes that MAMA can function as a currency that is able to hold its purchasing power regardless of market volatility.
All in all, when you join a DAO, you are joining a community that reflects your values, more than just a memecoin. It’s inevitable that there will be many similar DAOs out there, but eventually, all DAO’s token prices will fall back to the backing of its treasury (the basket of assets), which will be different in different DAOs. It’s also a direct representation of its community where we agree as a DAO on which projects to back in the future. This doesn’t mean DAOs can’t co-exist, but we strive to become the leading DAO that supports the Metaverse and Defi gaming projects on the Polygon network, generating wealth along the way.
No, MAMA is not a stablecoin. Rather, MAMA aspires to become an algorithmic reserve currency backed by other decentralized assets. Similar to the idea of the gold standard, MAMA provides free-floating value its users can always fall back on, simply because of the fractional treasury reserves MAMA draws its intrinsic value from.
DAI is a stablecoin that does not discriminate. Any individual or business can realise the advantages of digital money.
The DAI token lives on the Ethereum blockchain; its stability is unmediated by any central party, and its solvency does not rely on any trusted counterparties. All circulating Dai are generated from Maker Vaults and are backed by a surplus of collateral assets.
Each MAMA is backed by 1 DAI, not pegged to it. Because the treasury backs every MAMA with at least 1 DAI, the protocol would buy back and burn MAMA when it trades below 1 DAI. This has the effect of pushing MAMA price back up to 1 DAI. MAMA could always trade above 1 DAI because there is no upper limit imposed by the protocol. Think pegged == 1, while backed >= 1.
You might say that the MAMA floor price or intrinsic value is 1 DAI. We believe that the actual price will always be 1 DAI + premium, but in the end that is up to the market to decide.
To put it simply, we believe the Polygon network will become the critical backbone to the metaverse and Defi gaming universe as it offers cheaper and more efficient scaling solutions in the ecosystem.
Polygon is a framework for building interconnected blockchain networks. It is the leading layer two scaling solution that helps to solve some of Ethereum’s major limitations through Proof-of-Stake, Optimistic Rollups and ZK Rollups, enabling higher throughput (65k transactions per second with block confirmation time of <2s) and lower transaction costs.
In just one year, the number of Dapps built on Polygon increased 100 times to 3000 Dapps. Many big Web3 platforms have already joined the Polygon network, from NFT marketplace like OpenSea and DeFi protocols like Aave to Metaverse players like Decentraland. It further shows how Polygon’s compatibility with the Ethereum Virtual Machine makes it one of the ideal platforms for developing projects leveraging existing tools.
Polygon is designed to facilitate a future where different blockchains no longer operate as closed-off silos but instead as networks that fit into a broader interconnected landscape — perfect for Metaverse and Gamefi projects to scale and thrive through fast, secure and low-cost transactions
At a high level, MAMA DAO consists of its protocol managed treasury, protocol owned liquidity, bond mechanism (minting), and high staking rewards that are designed to control supply expansion.
Bonding in the "Bond" page generates profit for the protocol, and the treasury uses the profit to mint MAMA and distribute them to stakers. With LP bond, the protocol is able to accumulate liquidity to ensure the system stability.
MAMAs love works best when everyone in the family are staking.
) is the idea that, if everyone see their MAMAs love being the most valuable, it would generate the greatest gain for everyone (from a game theory standpoint). Currently, there are three actions a user can take:
- Staking () =3❣
- Bonding () =1🍭
- Selling () = -1🤕
Staking and minting are considered beneficial to the protocol, while selling is considered detrimental. Staking and selling will also cause a price move, while bonding (minting) does not (we consider buying MAMA from the market as a prerequisite of staking, thus causing a price move). If both actions are beneficial, the actor who moves price also gets half of the benefit (+
). If both actions are contradictory, the bad actor who moves price gets half of the benefit (+
), while the good actor who moves price gets half of the downside (
). If both actions are detrimental, which implies both actors are selling, they both get the worst possible outcome (
Thus, given two actors, all scenarios of what they could do and the effect on the protocol are shown here:
- If we both stake (,❣), it is the best thing for both of us and the protocol (both users gets the MAMA's love).❣
- If one of us stakes and the other one bonds, it is also great because staking takes MAMA off the market and puts it into the protocol, while bonding provides liquidity and DAI for the treasury!
- When one of us sells, it diminishes effort of the other one who stakes or bonds.
- When we both sell, it creates the worst outcome for both of us and the protocol (,🤕)🤕
As the protocol controls the funds in its treasury, MAMA can only be minted or burned by the protocol. This also guarantees that the protocol can always back 1 MAMA with 1 DAI. You can easily define the risk of your investment because you can be confident that the protocol will indefinitely buy MAMA below 1 DAI with the treasury assets until no one is left to sell. You can't trust the FED but you can trust the code.
As the protocol accumulates more Protocol Controlled Value (PCV), more runway is guaranteed for the stakers. This means the stakers can be confident that the current staking APY can be sustained for a longer-term because more funds are available in the treasury.
It is extremely important to understand how early in development the MAMA DAO protocol is. A large amount of discussion has centered around the current price and expected a stable value moving forward. The reality is that these characteristics are not yet determined. The network is currently tuned for expansion of MAMA supply, which when paired with the staking, bonding, and yield mechanics of MAMA DAO, result in a fair amount of volatility.
MAMA could trade at a very high price because the market is ready to pay a hefty premium to capture a percentage of the current market capitalization. However, the price of MAMA could also drop to a large degree if the market sentiment turns bearish. We would expect significant price volatility during our growth phase so please do your own research on whether this project suits your goals.
When you buy and stake MAMA, you capture a percentage of the supply (market cap) which will remain close to a constant. This is because your staked MAMA balance also increases along with the circulating supply. The implication is that if you buy MAMA when the market cap is low, you would be capturing a larger percentage of the market cap.
Rebase is a mechanism by which your staked MAMA balance increases automatically. When new MAMA are minted by the protocol, a large portion of it goes to the stakers. Because stakers only see staked MAMA balance instead of MAMA the protocol utilizes the rebase mechanism to increase the staked MAMA balance so that 1 staked MAMA (sMAMA) is always redeemable for 1 MAMA.
Reward yield is the percentage by which your staked MAMA balance increases on the next epoch. It is also known as rebase rate. You can find this number on the MAMA DAO staking page.
APY stands for annual percentage yield. It measures the real rate of return on your principal by taking into account the effect of compounding interest. In the case of MAMA DAO, your staked MAMA represents your principal, and the compound interest is added periodically on every epoch (8 hours) thanks to the rebase mechanism.
One interesting fact about APY is that your balance will grow not linearly but exponentially over time! Assuming a daily compound interest of 2%, if you start with a balance of 1 MAMA on day 1, after a year, your balance will grow to about 1377.
The APY is calculated from the reward yield (a.k.a rebase rate) using the following equation:
It raises to the power of 1095 because a rebase happens 3 times daily. Consider there are 365 days in a year, this would give a rebase frequency of 365 * 3 = 1095.
Reward yield is determined by the following equation:
The number of MAMA distributed to the staking contract is calculated from MAMA total supply using the following equation:
Note that the reward rate is subject to change by the protocol.
As illustrated above, your MAMA balance will grow exponentially over time thanks to the power of compounding. Let's say you buy a MAMA for $400 now and the market decides that in 1 year's time, the intrinsic value of MAMA will be $2. Assuming a daily compound interest rate of 2%, your balance would grow to about 1377 MAMA by the end of the year, which is worth around $2754. That is a cool $2354 profit! By now, you should understand that you are paying a premium for MAMA now in exchange for a long-term benefit. Thus, you should have a long time horizon to allow your MAMA balance to grow exponentially and make this a worthwhile investment.
There is no clear answer for this, but the intrinsic value can be determined by treasury performance. For example, if the treasury could guarantee to back every MAMA with 100 DAI, the intrinsic value will be 100 DAI. It can also be decided by the future DAO. For example, if the DAO decides to raise the price floor of MAMA, its intrinsic value will rise accordingly.
Let’s say the protocol targets an APY of 100,000%. This would translate to a rebase rate of about 0.6328%, or a daily growth of about 2%. Please refer to the equation above to learn how APY is calculated from the rebase rate.
If there are 100,000 MAMA tokens staked right now, the protocol would need to mint an additional 2000 MAMA to achieve this daily growth. This is achievable if the protocol can bring in at least 2000 DAI daily from bond sales. If the protocol fails to achieve this, the APY of 100,000% cannot be guaranteed.
No. Once you have staked MAMA with MAMA DAO, your staked MAMA (sMAMA) balance will auto-compound on every epoch. That increase in balance represents your rebase rewards.
You can track your rebase rewards by calculating the increase in your staked MAMA balance.
1. Record down the Current Index value on the staking page when you first stake your MAMA. Let's call this the Start Index.
2. After staking for some time, if you want to determine by how much your balance has increased, check the Current Index value again. Let's call this the End Index.
3. By dividing the End Index by Start Index, you would get the ratio by which your staked MAMA balance has increased.
MAMA DAO is currently unaudited. It is a fork of Olympus DAO on the Polygon Network, audits will occur at a later stage.