BEAT123: generation DeFi protocol for derivatives of real world assets on blockchain.

before discussing further about the ISSUA project, I will discuss a little about DEFI.

DeFi is an acronym for Decentralized Finance. from Blockchain + Cryptocurrency combined

These DeFi are finance applications resulting from the development of Blockchain and Cryptocurrencies. DeFi is predicted to be the next disruptor in the financial industry.

What devices in the blockchain are used to build this DeFi? There are two, namely Smart Contracts and Decentralized Applications or often abbreviated as D'apps.

What are the forms of this DeFi application? Keep on reading this article, because at the end of this article, several forms of DeFi that already exist will be presented. But before that, we will briefly explain the Smart Contract. Smart contract at a glance is in the form of programming about business agreements into Distributed Ledger Technology which is then executed automatically and allows disintermediary.

As we all know, the world is moving very fast in technology, the emergence of blockchain technology has also added value to many people. Blockchain technology and cryptocurrencies have the potential to turn the lives of hundreds of millions of unbanked people around the world in a positive light. In addition to the possibility to make and receive payments without having a bank account and save money without having to fear inflation and government interference, the opportunity to invest in various asset classes such as equities, stock indices, commodities, bonds and crypto assets will open up opportunities for many people. to invest with much higher long-term returns and to diversify risk.

However, currently that opportunity is not available. Centralized solution, with custodial lock…

Decentralized solutions on the other hand have so far suffered from the high volatility of some of these assets. In order to ensure that decentralized derivative products that are issued, reflecting the value of the underlying asset, remain usable at any given time, these assets must be excessively pledged. The example here is Synthetix, which requires a guarantee ratio of 600%. However, this significantly limits returns for investors who help fund the issuance of these derivative assets.

Another significant issue with existing systems like Synthetix is the risk associated with adding assets to the system. If synthetic assets are minted, one needs to take the opposite position — this role is taken by investors. In theory, risk can be diversified and offset by long and short positions. However, in reality this is not the case. While there are ways to offset these risks, they require additional investment, which will further reduce returns. In reality, Synthetix investors who have provided assets to the system will lose money in recent months, if this is not offset by risking prizes, which however need to run out over time.

ISSUAA thus takes a different approach to solving this problem

In this article, I will explain about ISSUA

ABOUT ISUAA PROJECT

ISSUA the next generation DeFi protocol for derivatives of real world assets on blockchain. with ISSUA enables the creation, printing and trading of synthetic assets (ISSUAA assets) that reflect the prices of the underlying real-world assets and provide a unique and highly attractive token for investors and liquidity providers, organized as a decentralized autonomous organization (DAO) and driven by the community governed exclusively through a voting procedure by the holder of the ISSUAA Protocol Token (IPT).

SYSTEM HOW IT WORKS

Minting and burning of derivative assets, which tracks the value of real world financial assets and crypto assets such as indices, stocks, commodities or crypto currencies.

Trading and liquidity providing of these assets on the ISSUAA marketplace.

Governance: Vote on asset prices, DAO grants and the creation of new derivatives

SOLUTION

Minting auxiliary fabricated assets on ISSUAA anticipates that one should store stable coins fixed to the USD. Monetary benefactors get token consolidates, each including one long and one short token. The long token is appended to the improvement of the essential asset and creates with it. The short token conflictingly mirrors the central asset’s worth. Accordingly, no additional plan is expected to expect the risk of a worth change. ISSUAA is expected to reliably have adequate security set up. Taking into account that ISSUAA liquidity providers can offer liquidity to both the long and the short token on a comparative essential asset, they can restrict the expense chances related to the fundamental asset esteem instabilities.

PRINTING PROCESS

The minting process of new derivative ISSUAA Assets is managed by the assetFactory smart contract.

To mint new assets, the “mintassets” function needs to be called, which requires two parameters:

The amount of USD stable coins that will be coverted into new assets

The symbol of the asset that is supposed to be minted.

The amount of new asset tokens to be received is calculated by dividing the amount of USD stable coins by the upper limit, which is defined for each asset.

The user will always receive an identical amount of long and short tokens. The value of these tokens is defined as following:

Long tokens: the value of the underlying asset.

Short tokens: the defined upper limit minus the value of the underlying asset.

The value of 1 long token plus 1 short token thus equals the defined upper limit parameter. Therefore, no over-collateralisation is needed for the ISSUAA protocol, which makes it highly capital efficient.

The only condition, under which the intrinsic value of 1 long token plus 1 short token would not equal the upper limit is the scenario, in which the price of the asset increases to a value higher than the upper limit. In this scenario, the asset will be frozen. This means that the asset can no longer be minted and that long tokens can be burned for the upper limit price.

CONCLUSION

The ISSUAA show is totally decentralized and set up as a DAO. The system is worked around a selective organization token, the Issuaa Protocol Token or IPT. The best load of IPT will amount to 100,000,000 tokens. Thereof, the vast majority of IPTs will be given as compensations to monetary supporters for giving liquidity and projecting a polling form in the ISSUAA DAO organization studies. The issuance speed of IPT starts with 1.8m tokens every week and lessens by 3% consistently, thusly working with that early liquidity providers are remunerated higher while ensuring that the most outrageous load of 100 million IPT tokens will not be outperformed.

Other than its ability as an organization token, the IPT token is clearly associated with the costs which are delivered on the plattform: 0.05% of each trade coordinated on the ISSUAA business focus work to the IPT, making the IPT a value bearing, pay associated organization token with top level all things considered tokenomics for monetary benefactors.

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All main smart contract currently in use by ISSUAA:

Polygon