The 5 Defense Mechanisms Comdex Plans on Using to Maintain $CMST Price Peg

Aniel Essien
3 min readMay 29, 2022

The $CMST crypto token by Comdex network, when launched will serve as a stablecoin within the Cosmos ecosystem.

The new Composite ($CMST) token was originally known as USCX.

$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.

$CMST will be used to create liquidity for digital commodities and to provide the stability of prices within the Comdex chain.

To maintain its price peg, $CMST uses some defense mechanisms and we will be looking at them closely.

1 $CMST = US $1

The $CMST is not just a stablecoin, but also an over-collateralized one. It never allows the debts backed by it to be larger than the collateral which you have used to collect the loans. You can mint $CMST via the collaterization of the assets you own within the Cosmos ecosystem.

“Maintaining the peg” is of very foremost importance when talking about a stablecoin. Without the peg being sustained, then it wouldn’t be a stablecoin.

Keeping $CMST Stable

Quite a number of security layers are used to protect the stable integrity of most vital stablecoins like the USDT, USDC, BUSD, etc. Hence, Comdex has outlayed the security layers that the network is using to protect its Composite token — $CMST.

The defense layers work in tandem, meaning in a sequence of one after the other the subsequent will be used when the former doesn’t work anymore.

1. Over-Collaterization

$CMST never allows the debts backed by it to be larger than the collateral which you have used to collect the loans.

Minting the $CMST via collaterals keeps debts under the purchasing power of the stablecoin, increasing liquidity and the ability to clear loans. The $CMST would benefit from a secure advantage of a maintained price peg.

2. The Power of Surplus

To maintain the $CMST token, minting it must be made a priority, in order to boost the constant and surplus distribution of the crypto token. To encourage the mining of the $CMST token, you are able to gain lower interest rates when you get it via collaterals.

3. Stablecoin Reserve

In this reserve, assets associated with the Cosmos ecosystem are being stored (including the $ATOM token) by members of the Comdex community. This security layer is a strategic one for keeping the $CMST pegged price stable.

4. The $HARBOR Token

$HARBOR token is the governance token of the $CMST token’s Composite forum. To boost the circulation of $CMST, it can be used to acquire more of the stablecoin. $HARBOR is used to make decisions on future developments of the $CMST token.

5. Emergency Shutdown

When most of the strategic defense layers have failed to maintain the peg, (there is a 99:1 possibility that it would happen), all the transactions on the $CMST order book would be halted for a moment, and the $HARBOR would be used to repurchase them all.

In addition to $CMST, Comdex has introduced Commodo, the landing and borrowing platform of the Comdex network.

On this platform, the $CMST can be well utilized to provide liquidity out of its surplus circulation, while you get your rewards.

Comdex plans on making the $CMST token a means of loaning and minting other crypto tokens within the Comdex community, and the Cosmos ecosystem at large.

Get ready!

About Comdex

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.

Website Twitter Telegram Medium Reddit Web App Newsroom Newsletter

--

--

Aniel Essien

A realist | a Blockchain Enthusiast | iWriteCoolShit