TiTi & Stablcecoin series II : Solution & Innovation by TiTi
I will introduce Major Innovation brought by TiTi Protocol firstly.
TiTi Protocol mainly uses the four innovative mechanisms to achieve the advantages mentioned above. Let me briefly describe these innovative points.
Innovation one, monopoly auto market make mechanism. This is a new paradigm for issuance of algorithmic stablecoins designed by TiTi team. It is mainly responsible for establishing a TiUSD primary market, and constantly capturing the changes in TiUSD’s supply and demand situation, Besides, an open market-making strategy is adopted to achieve stability.
Innovation two. Open market-making strategy, or what we called ReOrders. We use this market-making strategy to adjust TiUSD’s market circulation to achieve stability of TiUSD while avoiding risks. It is completely decentralized. Moreover, an artful design has been made in the engineering realization, which greatly reduces the gas consumption.
Innovation three. We designed a new investment subject based on the characteristics of the Protocol, decentralized market-making fund (MMF). Through MMF, we introduced a new game relationship to the system, which not only optimizes the user experience, but also can stabilize the market volatility risk of reserves and enhance the robustness of the Protocol.
Innovation four. This innovation is that TiTi Protocol is a protocol with multi-asset expansion capabilities. At the same time, we also designed a set of models based on on-chain governance to actively control the composition of reserve assets to enrich the means of the Protocol dealing with risks.
In the following pages, I will illustrate all the innovations in details by starting with architecture.
Solution Technical Architecture
The diagram shows the overview of TiTi’s architecture.The four core innovation are already available as described above. M-AMM and Reorders will make sure TiUSD recover to 1 USD and realize the price stability at $1; MMF helps the user Protocol to improve the robustness.
There are some others modules : The Rainy Day Fund is useful for extreme situations. In the secondary market, arbitrageurs equalize the spread in whole DeFi system.
If you look at TiTi at another angel, TiTi can works as a DeFi intermediate component.
As we can see that there are three roles in our protocol. Through these three roles, TiTi Protocol is integrated into the current DeFi ecosystem.
Role one are users who have a demand for TiUSD stablecoins. These users obtain TiUSD tokens through transactions in M-AMM and circulate them to other DeFi components according to their needs, including trading platforms such as Uniswap and Compound.
The second role is individual investors, which are potential participants of market-making funds. The investors obtains the new value of the Protocol generated by M-AMM during the market-making process by stake their crypto assets into the market-making fund. This part of users can also be some yield aggregation platforms. As for the source of the added value of this Protocol, I will talk about it in details below.
The third and most crucial role is the arbitrageur. As TiUSD circulates, multiple secondary markets will be formed in the market, in uniswap, sushi-swap, curve, etc. There may be a price difference among these secondary markets and the primary market mentioned above. In this case, arbitrageurs are will flatten this part of the price difference, so as to ensure that the price of TiUSD in the entire DeFi ecosystem is relatively stable.
Meanwhile, we also set up a risk reserve mechanism called Rainy Day Fund to deal with potential risks in the system. I will elaborate on the four core mechanisms respectively In TiTi&Stablecoin Series III: M-AMM & Reorders.
