5.2 Gringgotts Bank
Apple Bank is the workshop to mint the mcAsset of the Magic Cube platform. Users can mint new mcAsset tokens against their deposited collateral (USDM) via Magic Cube smart contracts.
5.2.1 USDM (USD of Magic) , The Algorithmic Stablecoin
USDM (USD of Magic), created by burning the MGP token, is the algorithmic stablecoin of Magic Cube ecosystem. Unlike the current algorithmic stablecoin generated by the rebase elastic supply algorithm on top of Ethereum, USDM is designed to encourage users to use arbitrage to stabilize currency prices.
The Logic of Minting USDM
  • When 1 USDM > $1, user can burn 1USD of MGP to mint 1USDM, at this time, because USDM is premium, so selling 1USDM can get more than 1 USD for arbitrage. At the same time the selling pressure brings the premium USTDM closer to USD.
  • When 1USDM < $1, user can burn 1 USDM to mint 1 USD of MGP. At this time, user's minting cost is actually less than 1 USD, so after getting 1 USD of MGP, the user sell MGP for arbitrage. At the same time, the supply of USTDM decreases, forcing the discounted USDM closer to the USD.
Following this logic, the price of USDM will fluctuate around a stable value after deducting the commission.
5.2.2 The Logic of Minting mcAssets
Anyone can mint mcAssets by staking USDM as the collateral. It is in the form of excess-collateralization ratio that the value of the staked USDM is required to be at least X% of the mined mcAsset. That’s to say, X% is the minimum staking ratio. For example, if the real-time trading of stock Y is $1,000 at a given time, then minting 1 mcY will require at least X%*$1,000 of USDM.
The minting contract implements the logic of an Excess Collateralized Debt Position (CDP). With this logic, users can mint new mAsset tokens based on the USDM they have deposited as collateral. The current price of the collateral and minted assets read from the Crystal Ball Oracle contracts determines the C-ratio of each CDP. The smart contract for assets minting also contains the logic to liquidate CDPs with C-ratio below the minimum value required for assets minting by auction.
The main mcAssets minted on the Magic Cube platform include virtual assets such as stocks and cryptocurrencies, and real physical assets including real estate. In the first phase, we mainly support stock and cryptocurrency assets, for example, Apple's stock APPL is reflected as mcAPPL, BTC as mcBTC…etc.
5.2.3 Burn mcAssets
To burn the minted synthetic assets, the issuer must burn the amount of mcAssets initially issued to unlock the staked stablecoin USDM.
If all outstanding minted mcAsset tokens are burnt, the smart contract will automatically closes the mint position and the collateral will be automatically redeemed to the minter.
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