Imagine a DeFi lending ecosystem designed to ensure lenders and borrowers are never at the mercy of each other. Many platforms in the DeFi lending market have variable borrow fees, and this puts borrowers in a tough spot. One of the major issues for these borrowers is that when they borrow from lenders, they have a “borrow annual percentage yield (APY).” Every borrower wants a borrow fee that is relatively fixed.
To solve this problem, Growth DeFi is launching a first-of-its-kind token known as MOR. With the MOR token, borrowers can borrow without the fear of having the borrow fees skyrocket at any point.
The MOR Token
MOR is the first overcollateralized token that allows you to eran yield while you borrow at the same time. The token is a stablecoin that is softly pegged against the United States dollar. It can be borrowed and minted with other tokens already earning yield as collateral. The token is designed to stay close to the $1 price point to help users take out loans and leverage yield farming positions while keeping interest rates low.
MOR can be minted through a stablecoin using a fixed exchange rate with BUSD or by offering collateral in standard tokens and vault tokens. The major purposes of the MOR token are to maximize capital efficiency and ensure that lending rates are stable.
How MOR Ensures Stability of Lending Fees
One of the major issues of many DeFi lending platforms is variable lending fees. If a user is leverage farming, he would want a borrow fee that is not constantly changing and can skyrocket at any given point. Often, the skyrocketing lending fees result from increased demand to borrow and a decrease in lending deposits. To tackle this problem, MOR has a fixed stability fee. This fee can only be changed through a voting process passed through the decentralized autonomous organization (DAO).
For MOR, the borrowing fee has been replaced by a stability fee of 5%, which only changes through voting. With this, it becomes easier for users to identify their profit levels earlier, without having to worry about fee variations. It also ensures that users get consistent returns from all their activities. For instance, if a user is leverage yield farming on a pair like BUSD/USDC on PancakeSwap, his stability fee is fixed to 5%. Therefore, he can calculate his profit based on that figure, unlike having a 3% lending rate today and 15% lending tomorrow. In the end, MOR borrowers are never at the mercy of lenders.
Notable Features of MOR Token
MOR is the only stablecoin that lets users leverage their yield-earning tokens. You can borrow the token or mint it with tokens that are already earning yield as collateral. For example, you can borrow MOR tokens with your yield-earning stkCAKE tokens, use the MOR to get more CAKE tokens, and then stake them to get stkCAKE. You can repeat the process until you reach your desired risk level. All these are done without requiring more capital to acquire the additional stkCAKE.
With a 102% minimum collateralization ratio/50x max leverage, you can join in and make a standard 10% yield on stablecoins into many more percentage points. For example, BUSD/USDC pairs on PancakeSwap have a typical APY of 10%, and the minimum collateralization ratio is 102%. It means that a user’s maximum yield with 50x leverage would be up to 1,180% APY for his stablecoins.
With MOR, users can earn yields on their collateral even while they borrow a stablecoin with the same collateral. This is not obtainable with any other DeFi token or protocol. Since users can borrow against their collateral and get paid doing so, there is higher profit for the borrower.