We are glad to announce that oBTC has joined 88mph as a new asset. This is a new alternative to “oBTC — Interest-Bearing BTC” after Boring Farm, Curve, Harvest, and ForTube. It is always the goal of this decentralized pegged-coin to offer oBTC more interest-bearing scenarios.
What is 88mph and how to obtain fixed-rate interest on it
88mph is a protocol that provides fixed-rate yield-generation opportunities. It has currently supported DeFi protocols including Aave, Compound and Yearn. You can buy floating rate bonds for arbitrage opportunities. MPH is the governance token of 88mph, which can be obtained through liquidity mining. You can also get protocol fees and mining rewards by staking MPH.
After BoringDAO’s partnership with 88mph, now community members can choose to deposit two assets, oBTC or Curve oBTC liquidity pool LP tokens, to 88mph to receive fixed-rate interest and MPH tokens. Options in cycles include choices ranging from 7 to 365 days. Of course, the longer the period, the higher the reward.
The fixed rate option is relatively conservative, but the most attractive thing for users is that while depositing assets to 88mph, they can linearly unlock MPH within 7 days. The APY is very impressive, which is about 80%-90% now. If you withdraw these MPH tokens directly, 30% of them will be deducted. That is, it ended up with about 50%-60%. Of course, if you don’t withdraw MPH and continue to participate in staking, you can also get Dai, Comp, and Farm rewards, which will bring an additional bonus of about 3.2% APY. (Data from https://88mph.app/, Jan.18 2021)
The whole process is as follows:
If you choose to Stake MPH, the overall APY will be: 5%+3.2%+80%=88.2%.
In addition, if you need long-term token-based interest, and there is a need for “discounting”, you can deposit oBTC to 88mph for a long period of time and then get a discount rate of about 56%. And there is an additional token-based interest rate of about 5%. This is a very good choice. In addition, each bond will have its Non — Fungible Token (NFT), which can also be traded.
How 88mph works
88mph is super cool, and its product contracts are code audited multiple times by organizations including Quantstamp.
From the perspective of mechanism, 88mph is a fairly risky product which would cause a pool-wide insolvency event. But this is resolved by 88mph through pooling the deposits together. Here is a brief explanation of the interest payment mechanism of 88mph: 88mph will generate a continuous inflow of interest due to continuous farmers. If no abnormal situation occurs, the continuous inflow of interest can continue to support the fixed interest payment.
At the moment, 88mph uses a linear model for determining the fixed interest rate offered to depositors. 88mph keeps track of the Exponential Moving Average (EMA) of the underlying yield protocol’s APY over roughly a monthly window, and offers a certain percent of the EMA as the fixed rate, which is very reasonable. Interest payments can be made if the interest rate does not remain lower than the average level for too long.
And 88mph has designed floating-rate bonds to guarantee the settlement if interest rates are consistently low for a long time. Not only do floating-rate bonds significantly reduces the risk of depositing into 88mph, it also provides a brand new financial product that allows users to long the interest rates of lending protocols. Under the 88mph scheme, investments in floating-rate bonds are profitable as long as the interest rate does not fall to 25% of the value of the initial floating-rate bonds. If the rate rose after a deposit, 88mph provides even more profits than the interest promised to the user. This is to motivate people to buy Floating-rate bonds.
In summary, 88mph brings a brand new interest rate option to oBTC with high yield, stable rates, and flexible cycles. And by adding an asset pool on 88mph, oBTC mortgage scenarios are enriched. Let’s enjoy BTC’s speed racer journey at 88 miles per hour!
BoringDAO is a decentralized asset bridge project, runs as a DAO. BoringDAO can allow any blockchain with smart contracts such as Ethereum to become a Layer2 solution for Bitcoin, making BTC, LTC and other assets programmable. With “Tunnel Mechanism” and “Triple Pledging”, BoringDAO enables BTC, LTC and other blockchain assets seamlessly engage in Ethereum and other blockchain networks, and enables users to seamlessly access decentralized protocols.