Comdex currently houses a DeFi ecosystem consisting of an overcollateralised stablecoin ($CMST), a DEX (cSwap) and a lending-borrowing platform (Commodo). The existing designs of these platforms treats ATOM as the core asset of liquidity with the highest incentive and importance. This grant proposes to integrate ATOM LSDs from the AEZ into Comdex’s ecosystem of products such that ATOM-LSDs from the AEZ play a crucial role in powering liquidity throughout Comdex’s core set of products, which brings more utility to ATOM-LSDs and ultimately drives more activity to the AEZ.
The grant is divided into three parts, each part proposing changes in our current dApps to integrate stATOM and make it the core liquidity asset in the app.
Part 1- Composite V2- Anew mechanism on Harbor protocol for minting $CMST, modelled after Liquity protocol’s mechanism to mint the $LUSD stablecoin. Composite V2 allows users to mint the $CMST stablecoin at a capital-efficient collateralization rate of 110% with $stATOM as the collateral asset, interest-free.
$CMST minted from Composite V2 is interest-free and capital efficient. Being backed solely by a decentralized asset like $stATOM, it helps usher Cosmos DeFi into a paradigm of fully decentralized stablecoins, devoid of dependence on centralized stablecoins. (More details in the document attached)
Part 2-stATOM as a transit asset on Commodo- Commodo is a lending-borrowing platform on the Comdex chain built using a novel approach of cPools and transit assets to alleviate a lot of the existing problems and vulnerabilities of existing lending borrowing platforms. Lending-assets on Commodo has isolated lending pools (called cPools) which are all paired with ATOM and CMST. For example, an OSMO cPool would contain OSMO-ATOM-CMST as the 3 assets in the pool. Users can then Lend any of the assets and borrow any asset against their lent asset as collateral.
Every individual cPool on Commodo has ATOM and CMST as common assets present across pools. This helps bridge liquidity across cPools and enables cross-pool borrowing lending. For example a user can effectively borrow CMDX against OSMO by the following trail of liquidity: Lend OSMO to the OSMO-ATOM-CMST cPool. Borrow ATOM against the lent OSMO. Lend your borrowed ATOM to the CMDX-ATOM-CMST cPool. Then borrow CMDX against your lent ATOM.
This mechanism safeguards the protocol against extreme market volatilities risks while maintain capital efficiency. ATOM is currently a crucial asset to ensure the protocol functions smoothly. The grant proposes to replace ATOM with stATOM as a transit asset to further strengthen alignment with the AEZ.
Part 3- stATOM as a Master pool asset on cSwap.cSwap is a decentralised, IBC-enabled exchange built on the Comdex chain. It employs a hybrid approach, fusing traditional Automated Market Maker (AMM)-based liquidity pools with an order book-based system, resulting in no bonding periods and high yields for liquidity providers.
cSwap DEX utilises a newly developed incentive mechanism that relies on “master” and “child” pools that are aimed at efficiently building deep liquidity across various pools in the DEX. A high level introduction to cSwap and its mechanism can be found here: https://blog.comdex.one/introduction-to-cswap-an-interchain-dex-on-comdex-c132b2afbcfa
The grant proposes using the stCMDX-stATOM pool as the master pool on cSwap, instead of the current ATOM-CMDX pool
Please refer to the document attached for a detailed and in-depth explanation of each of these products and how the proposed integration would work.
