Composite ($CMST): The Over-Collateralized Stablecoin of Comdex
The Comdex network has always been a contributor to decentralized finance solutions for the widened Cosmos ecosystem. Its goal is to make a standing connection between (CeFi) centralized and decentralized finance (DeFi), and this is gradually being achieved.
We may all know that fluctuation-resistant cryptocurrency is essentially required for any decentralized finance solution protocol in the world, because stablecoins are generally stable in price, and they keep the balance of the protocol. This is what the $ATOM token of the Cosmos ecosystem helps to do; then comes the Composite ($CMST) token.
The growth which the Cosmos ecosystem and Comdex network have seen in the past few years is accompanied by the presence of assets and solutions in their decentralized finance protocols. However, the full presence of DeFi has not yet been actualized in the Cosmos ecosystem, and Comdex has been made a decentralized finance layer for the Cosmos ecosystem.
This is where the CMST comes in
CMST at a Glance
The new Composite ($CMST) token was originally known as USCX, which is the forerunner token of the to-be-launched $SHIP token.
$CMST is an over-collateralized stablecoin (featuring price stability) that will be pegged to the US dollars (at US$1 per CMST) and is likewise enabled via the InterBlockchain protocol.
The CMST was launched to create liquidity for digital commodities and to provide the stability of prices within the Comdex chain.
As a stablecoin developed by the Comdex team and inspired by the reputable MakerDAO team, the CMST renders quality purchasing power to the members of the Comdex network. It can be minted by staking any of your Cosmos assets/stablecoin in a locking pool.
One thing to note is that you do not need permission to mint your CMST as an over-collateralized debt asset, meaning that debts centered upon the CMST are always lesser than the collateral utilized to borrow such loans.
You can mint CMST at one US dollar when you lock up your collaterals in a pool, after which you can sell the minted token for $2 or more. You can likewise get CMST for $0.99 or less, to unlock your collaterals and have access to cheap transactions on the blockchain.
However, another fact is that the CMST needs various mechanisms to maintain its stable price of one US dollar, and some of these include over-collateralization and the use of the HARBOR token. The stable price is known as the “peg” of the CMST.
Maintaining the Peg
CMST is controlled by decentralized economic circumstances. Accepting large ranges of Cosmos assets as security pledges against debts, these assets back the CMST token up via the InterBlockchain protocol.
Governance is one sure way of maintaining the CMST peg of one US dollar; it can allow for emergency shutdowns, which are one of the ways of controlling the CMST from crashing below a dollar, by temporarily halting the minting of the token.
The HARBOR token — as mentioned earlier — will be the governance token of the Composite forum. $HARBOR will be used to vote for or against monetary policies concerning the CMST token and will be burned upon usage (to prevent too much circulation).
The trick is that the CMST is used to buy and burn HARBOR, while the HARBOR token does the same to CMST.
Generating its peg value from part of the income and the transaction fees run on the Comdex blockchain, you can also mint the CMST token by using the CMDX token as collateral, thereby providing liquidity.
As time proceeds, the CMST token will be introduced on the Comdex decentralized synthetics exchange as a method of instant payment for commodities; soon.
With intentions to go more global with both upcoming and already high-ranked crypto networks, Comdex aims at diversifying the utilization of collaterals, thereby making investments an easier thing to do.
Join the Comdex community worldwide now, and start getting knowledge of the various earning opportunities available.
Comdex is a decentralized synthetics protocol and a product of the Persistence platform.
Comdex develops possible solutions for the decentralization of finance (DeFi) and the democratization of commodities by handing over to investors the knowledge of a widened scope of asset classes and rewarding features.