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Briefly describe the implementation principle of the DeFi fixed-rate lending agreement 88mph and the role of the token MPH

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Instead of losing money, LP made a small profit, and recorded a security breach attack that was a blessing in disguise.

Original title: "Although it has been attacked by security vulnerabilities, this project named "88mph" still has something remarkable"

Original source: Lianwen, LeftOfCenter

Just started liquidity mining for two days of fixed interest encryption Lending agreement 88mph, the attack was shut down urgently due to contract loopholes. Fortunately, the project team responded quickly and transferred the funds safely, and completed the loophole repair in less than 24 hours, and announced The second round of liquidity mining will be restarted at 4 am on November 21, Beijing time , the newly launched liquidity mining will also last for 14 days, and 88,000 MPH tokens will be distributed to participating users.

Quite dramatically, as the team froze $100,000 worth of assets that the attacker had placed in the MPH bond Therefore, this attack not only did not cause users to suffer losses, but also allowed the first batch of participants to obtain an unexpected "reward". At present, the claim interface has been launched, and 88mph liquidity providers can click here Apply for ETH.

In this head-to-head confrontation with hackers, the 88mph development team effectively protected the property safety of users through timely responses, and completed the Instead of fixing bugs, it won word of mouth for the project. However, this security incident once again sounded the alarm for the market. High-profit DeFi games also breed high risks. Even experienced developers and contracts that have passed the audit cannot guarantee 100% security.

The beginning and end of the 88mph attack

On November 16, the fixed-interest encrypted lending protocol 88mph was launched Liquidity mining.

According to the official announcement, this liquidity mining will last for 14 days. Users can obtain their native token MPH by depositing and purchasing floating rate bonds. 88mph will distribute a total of 88,000 MPH through this mining plan, and the daily distribution is about 6285 MPH.

Two days after the liquidity mining started, an attacker exploited MPHMinter’s contract loopholes to try to steal all of its assets in the Uniswap liquidity pool ETH, as a result, was discovered by the famous white hat samczsun and notified the project party.

The developer immediately suspended the liquidity mining, transferred the funds in the ETH/MPH pool to the governance multi-signature wallet to keep the funds safe, and The vulnerability was permanently fixed in less than 24 hours.

At the same time, since the development team froze the attacker's $100,000 worth of assets placed in the MPH bond contract, and decided to transfer these additional The proceeds are distributed to liquidity providers, and the ETH airdropped to liquidity providers includes the principal and part of the attacker's ETH. In other words, this time the attack on the user's property not only caused no loss, but also made a small profit.

As of now, 88mph has announced that it will restart the second round of liquidity mining at 4 am on November 21, Beijing time. The newly launched liquidity Mining will also last for 14 days and 88,000 MPH tokens will be distributed to participating users.

It is worth mentioning that The developer of 88mph Zefram Lou has a solid background and has been involved in the core development of multiple blockchain applications including Betoken . He is good at Ethereum dApp development and is proficient in Python, Java, and Web Developed with iOS, keen on blockchain, machine learning, virtual/augmented/mixed reality, etc., involved in projects including anti-whale DAO organization WhalerDAO , the non-destructive donation protocol PoolDAI and the DAO platform Fantastic12.

In fact, the 88mph has already passed Quantstamp's safety audit earlier. According to Quantstamp Safety Audit Report, 88mph The deposit and bond smart contracts have been audited by Quantstamp, and its liquidity mining and staking contracts are forked from Synthetix. Ownership of all contracts has been transferred to the Timelock contract. (Timelock contract address: 0x4027d912A19E3Cd540FB580aF6A9088eAC738566#code)

During this security audit, Quantstamp found a total of 16 problems, of which 2 were high-risk resolved), 1 medium risk issue (resolved), 8 low risk issues (resolved), and 3 information risk issues (resolved).

Despite being attacked by a security breach, this project named

It can be seen that only the deposit and bond smart contracts passed the security audit of Quantstamp, and the attack was caused by the MPHMinter contract vulnerability.

This reminds us once again that when participating in high-return DeFi mining strategy games, security should be regarded as the top priority. Even if the team has rich development experience and the contract has passed the audit, it cannot guarantee 100% security.< /p>

However, excluding the safety risks, this project named "88mph" still has something remarkable. The following briefly introduces the uniqueness of 88mph Based on its location, implementation principle, unique economic model, and security risks, is the liquidity mining of this project worth participating in?

What the hell is 88mph?

88mph is a new fixed-interest encrypted lending protocol that allows users to deposit a variety of encrypted assets to earn fixed-rate interest. At this time, depositors can get An NFT token that represents deposited funds on its own behalf, while maintaining unlimited liquidity. This is different from most encryption protocols with floating interest. The currently supported encrypted tokens are aUSDC, cUSDC, cUNI, yUSD and ycrvSBTC.

That is to say, if you deposit 100 DAI at 88mph with a fixed annualized APY of 10%, the storage period is 1 year, and after 1 year expires , you can get 110 DAI.

How does 88mph manage to always provide a fixed rate of return for such a volatile cryptoasset? Does 88mph always guarantee acceptance of fixed rate interest for depositors? Is there a risk?

Understanding these questions requires an understanding of how 88mph works.

Implementation principle

In fact, when users deposit encrypted assets (USDC/UNI/ yCRV/crvSBTC), 88mph will invest these funds in various DeFi income agreements such as Compound, Aave and yEarn to earn floating income, thereby providing a source of funds for storing users' fixed interest.

You may ask, the interest of these DeFi income agreements is floating, what if the income generated is less than the fixed interest payable to storage users?

88mph solves this problem by aggregating all deposits in one fund pool, which means 88mph will put all stored funds into a separate pool, once the deposit period After the end, the user can withdraw the deposit from it.

What are the benefits of putting all deposit funds in a separate pool?

The first benefit is to balance the risks. Since there are many different protocol tokens in the pool, when the floating rate APY of one protocol falls, it is possible that the floating rate APY of another protocol is rising. This will be offset by gains from rising APY. Thereby reducing the risk of bankruptcy and improving the stability of interest rates of various encrypted assets in the 88mph system.

Second benefit is staying solvent at 88mph. The maturity dates of the various deposits in a pool overlap, that is, when a deposit with an earlier maturity has a deficit in income, another deposit with a later maturity can be used to pay the former’s income difference. While this by itself does not directly solve the debt problem, the combination of risk balance and the volatility of floating rates helps to maintain solvency at 88mph.

What if something worse happens? That is, if the floating interest rate APY drops to a very low level and maintains this value for a long time, then the fixed interest rate value generated based on the higher floating interest rate will have a deficit at the beginning, and it may not be able to accept the interest income of the depositor on the maturity date, and the time is enough In the long run, it may even lead to the bankruptcy of the entire pool.

For this reason, 88mph also provides a mechanism of "floating rate bonds". Floating-rate bonds are purchased to cover liabilities incurred on one or more deposits in the pool, and in exchange, bond buyers receive the proceeds generated by those deposits.

For example, if Kevin's one-year deposit interest generation is insufficient, it brings a 5 token interest debt deficit (5% fixed interest rate) to 88mph , at which point Chad buys a floating rate note on the debt and fills the debt.

At this point, the risk return that Chad can obtain is the floating rate return generated by these 105 tokens. Since the 88mph fixed rate gain is equal to 75% of the initial floating rate, Chad will always make a profit as long as the average floating rate does not fall by more than 25% during the lifetime of Kevin's deposit, and if the floating rate rises, his profit will be increase. Chad is essentially long the floating rate.

Of course, in order to ensure the security of the system and encourage the purchase of "floating rate bonds", 88mph also adopted the MPH token reward plan, that is, buying "floating rate bonds" to earn Take MPH tokens.

What are MPH Tokens used for?

88mph The core business is to provide fixed-interest encrypted lending services, allowing users to lend a variety of encrypted assets to obtain stable interest income. The floating interest rate of the token is calculated as a benchmark (75%), which meets the needs of DeFi users who want to seek stable annualized income. On the other hand, the "floating rate bond" provides a certain degree of insurance mechanism. To provide a more stable security guarantee for the system, in fact, this is relative to providing risk stratification, so that users with higher risk preferences have the opportunity to obtain higher returns while taking certain risks.

The above two functions are the key points for 88mph to generate long-term value, that is to say, only the more its core business is used, the greater the value generated. Thus generating a positive cycle based on the entire ecosystem.

In order to encourage more people to use these core businesses, 88mph launched this liquidity mining plan (initial token distribution), as long as the two cores of the platform are used Business (time deposits with fixed interest and purchase of floating rate bonds), you can get MPH token rewards, time deposits are rewarded with MPH tokens based on the proportion of interest income generated by deposits, while floating rate bond purchases are based on the proportion of the purchase amount Make rewards.

Despite being attacked by a security breach, this project named

The tokens currently supported by 88mph are aUSDC, cUSDC, cUNI, yUSD and ycrvSBTC, and there are 7 options for the fixed storage period from the shortest 7 days to the longest 1 year.

However, unlike most mining projects, the holding of MPH tokens is not permanent, but only valid within the validity period of the business. Once it expires, depositors can Get back the principal and fixed interest income. At this time, the equity certificate NFT is destroyed, and 90% of the MPH reward tokens need to be returned to the governance treasury.

Also That is to say, before the deposit business expires, you can use these rewarded MPH tokens to do various operations to earn income. For example, you can participate in liquidity mining activities to get more token rewards. According to the plan, Liquidity providers can provide liquidity for the MPH/ETH trading pair on Uniswap, and at the same time stake the LP token of the trading pair on 88mph to earn MPH token rewards. Within 14 days of the mining validity period, 88mph will be distributed in total 88,000 MPH, with a daily allocation of approximately 6285 MPH.

During the 14-day validity period of liquidity mining, MPH token holders can provide Earn more MPH tokens through liquidity, or stake these MPH tokens on the platform to earn more income. The source of income includes the farming income of other related protocols (such as Compound and Curve), as well as the fees generated on the 88mph protocol (per A withdrawal of 88mph will deduct 10% from the interest as a protocol fee), and the reward is issued in the form of DAI . Essentially, the MPH token is a production-type token with a validity period that only participates in the core functions of the platform Operations can only be borrowed. During this period, you can use it to maximize your benefits.

Although it has been attacked by a security breach, this project named

In addition, 88mph uses NFT as user deposit and purchase certificate, each deposit and bond purchase Every behavior will generate an NFT certificate, and the holder has the authority to withdraw the principal and obtain interest. The composability of Ethereum endows the NFT with unlimited possibilities. For example, the NFT can be used as collateral for loans on loan platforms such as RocketNFT, and the loan can be repaid after the deposit matures.

Extended reading: Panoramic interpretation of the next encryption investment boom NFT

It is foreseeable that after the end of a round of liquidity mining, basically mining Most of the obtained MPH tokens will flow into the governance fund. At this time, the purchase of floating rate bonds will no longer have MPH token rewards, but only limited to deposit function rewards. Then the next round of 14-day liquidity mining will be restarted.

Team, Governance & Product Roadmap

88mph of Aave second round of ecological grants A project of , and has passed the Quantstamp security audit.

As one of the Aave Ecological Funding Programs, the protocol supported by 88mph bears the brunt of Aave, but only supports one of the token assets, aUSDC, among which Token assets include cUSDC, cUNI, yUSD, and ycrvSBTC. The team says it will integrate more assets from Aave V2 and Curve.

In addition, 88mph plans to launch a smarter fixed rate APY strategy. In addition, 88mph plans to develop more NFT application potential, to integrate deposit NFT as an asset certificate into more Opensea or Rarible for sale, to borrow more assets on Nftfi mortgage, etc.

Governance

Same as most mining projects, 88mph encourages users to perform core operations Governance token rewards can be obtained. The difference is that the 88mph token reward has a time limit and is only valid during the business period, but after the expiration, you have to return 90% of the tokens to the Governance treasury (address 0x56f34826Cc63151f74FA8f701E4f73C5EAae52AD). 88mph plans to integrate Snapshot to activate community governance, integrate protocol parameters into the governance module, and MPH holders will have voting rights to decide how to dispose of these funds.

That is to say, after each user operation, only 10% of the tokens are actually obtained. If you want to get 100% of the tokens, you have to spend additional money Buy back 90%, or use a greater (10 times) effort to mine, get back tokens, and have a greater proportion of governance rights. The result of this design mechanism is that users either perform more operations or spend more money to buy tokens in order to obtain voting tokens with a greater proportion of governance authority.

In the 88mph ecosystem, MPH tokens are endowed with governance functions, holding MPH tokens can vote on various community proposals, including but not limited to protocol parameter changes , return ratio of MPH tokens (currently 90%), new incentives, capital efficiency strategies and growth, etc. In addition, MPH tokens are also endowed with various interest-generating functions, whether it is pledging interest (rewarding DAI) or providing liquidity interest (rewarding MPH tokens), you can get more income.

It can be said that the MPH token is not only a governance equity token, but also a production token, which is equivalent to a production tool, but The use of this production tool is limited in time. For holders, "renting" means that time is tight, which will promote them to do their best to produce income and maximize income. On the other hand, if their own production income continues to grow organically for a period of time, then , The income cultivation of this lease mechanism is also conducive to promoting the extension of business by existing users, and to a certain extent can promote the organic growth of the core business of the platform.

Development Fund

Every time a deposit operation or bond purchase occurs, it will be minted MPH, at the same time, the system will mint an additional 10% of MPH tokens based on the newly generated MPH tokens, and send them to the developer fund to pay for the future development and maintenance of the protocol.

Decentralized finance is still in its early stages, high yield On the other hand, you need to bear high risks. High risks not only mean that frequent attacks may make you lose everything, but also, as a decentralized capital-guaranteed wealth management service, there is also the risk of interest rate fluctuations. Income bonds) Whether the asset scale can meet the system requirements remains to be verified by time.