DeFi Growth Market | DGM
Last updated
Last updated
DGM - DeFi Growth Market tracks the expansion and contraction of new DeFi projects and assimilates changes across large cap assets. There are thousands of crypto projects popping up, while not all of them provide value to the ecosphere as a whole, they do pave the way for continued innovation. As such, while the overall market cap of crypto as a whole may largely depend on a wider acceptance rate, there is value to new project introductions. As such, DGM seeks to track the overall expansion rate of innovation across the DeFi space and ratios this growth rate to large cap tokens and overall adoption rates.
As innovation grows - this asset is structured to appreciate in value. However, volatility is baked into the product, therefore it can have wider fluctuations based on total market capitalization and rate of unique growth. As such, it can act as a shorter to mid-term trading tool based on portfolio bias of the aforementioned.
Mints start at 10 USD worth of ISA and will theoretically trade as a summation of new project growth, total market capitalization, and overlap in indirect exposure that leads to crypto market developments. The higher the growth in the area, the more sensitive DGM is to positive moves. The lower the growth, the less sensitive the asset trades. Over time - the range will rise or fall based on growth, but the bias representation will remain consistent.
Like all collateralized products on our platform, sRho is used to secure the short position. DGM utilizes a 1.75:1 collateral ratio to secure the position. A 2.5% mint fee is required to mint DGM - with the minter receiving sDGM in return as a receipt.
A 2.5% fee applies to swapping sDGM. sDGM can be bonded and sold to the Treasury. Short-sellers will also pay interest to the pooled long sDGM at a daily interest rate of 0.2% per day - which will be paid for in sRHO. This daily interest will be calculated at the time of establishing the short by entering the maximum number of days you will be short for. Once the time limit is up - the short contract will expire and the short closed. If DGM is below the price when the short was initiated, the aggregated long pool of DGM will pay the unit count worth of profit to the now closed short holder. The time interest the short paid to the collected pool of longs will then be distributed to the longs proportional to their positional unit count.
However, the interest will only be paid to the long holders that were in the pool at the time the short was established. If a short-seller chooses to close out their position at a loss, the collateral lost will be divided among all long sDGM unit holders that were in the pool at the time the short was established. If the short-seller closes out their position at a profit, the percentage of the profit will be divided amongst all long-holders and the appropriate sDGM units will be transferred to the short-seller as profit.
Shorting above the total float of DGM in the lending pool is prohibited.
