Lending is considered one of the most essential DeFi stacks in an ecosystem. Lending and borrowing boost capital efficiency by allowing users to leverage their position. Besides Anchor, Mars Protocol is another promising lending platform in the Terra ecosystem when offering some outstanding features.
In this article, let’s find out more about Mars Protocol’s potential to become an integral building block on Terra.
What is Mars Protocol?
Mars Protocol is a Lending Protocol on Terra. It is defined as a “bank” of the future by being non-custodial, open-source, transparent, algorithmic, and community-governed.
Mars Protocol is the first protocol on Terra to offer 2 types of borrowing: collateralized and uncollateralized borrowing. And the uncollateralized borrowing feature is expected to increase the borrowers’ demand, utilization rates, and returns for Mars lenders.
How does Mars Protocol work?
There are 4 main stakeholders on Mars Protocol:
- Lenders: Deposit assets into Mars liquidity pools. The lender can deposit to earn interest rate only or to borrow from Mars Protocol.
- Borrowers (collateralized): Borrow from Mars Protocol by depositing assets into Mars Money Market.
- Borrowers (uncollateralized): Smart contracts that borrow from Mars Protocol without depositing assets. The credit line of each smart contract must be approved by governance and a credit limit will be set to mitigate risks for Mars Protocol.
- Council: Stake MARS to earn protocol fees and participate in governance.
Some people may want to know more about how Mars Protocol makes uncollateralized borrowing possible in such a highly volatile market, so I will explain more about this feature in this part. There are 2 parties participating in this money market:
- Borrowers: While collateralized borrowing is a B2C (business-to-customer) service, uncollateralized is a B2B (business-to-business) service. This means that not everyone has access to this type of borrowing but only whitelisted protocols/ projects, which mitigates the risk of default for lenders.
- Lenders (Users): Anyone can supply this type of loan. The advantage of participating in this type of borrowing is that lenders will earn higher interest than collateralized borrowing while still having certain security from the protocol.
From that mechanism, as retail lenders, we can benefit from higher interest rates when joining the uncollateralized borrowing market.
What is MARS token?
MARS is the native token of Mars Protocol. It is a tool for Mars Protocol to build the incentive program and government system for the development of the protocol.
At the time of writing, Mars Protocol has not released its token yet. Once the token is released, I will update this article as soon as possible.
Detailed information about MARS token
MARS Price Today
MARS Key Metrics
- Token Name: Mars Protocol
- Ticker: MARS
- Blockchain: Updating...
- Token Standard: Updating...
- Contract: Updating...
- Token type: Governance, Utility
- Total Supply: 100M MARS
- Circulating Supply: Updating...
MARS Token Allocation
- Community: 55%
- Team & Advisors: 20%
- Investors: 10%
- Reserves: 10%
- Initial Airdrop: 5%
MARS Token Sales
MARS will be distributed to the community through a lockdrop event.
MARS Release Schedule
MARS Token Use Cases
MARS holder can stake their MARS to receive xMARS for the following purposes:
- Earn revenue from the protocol
- Share risk with the protocol: 30% of xMARS can be sold in case of a shortfall event
How to get MARS token
At this moment, you can join the lockdrop event of Mars Protocol to get MARS tokens when they are released
How to buy MARS token
How to store MARS token
Mars Protocol Roadmap
Team, Investors, and Partners
Is Mars Protocol (MARS) a good investment?
I hope that from all the mentioned information, you can get a basic understanding of Mars Protocol to start researching more about this project. It is hard to tell firmly whether any project/ token is a good investment or not. However, I will provide you with some key highlights of Mars Protocol so that you can do your own research and make your own investment decisions.
- Terra’s TVL has reached an ATH of $10.14B. The blockchain is showing a sign of booming in the 4th Quarter of 2021 when many new projects will be launched soon.
- Among several projects which will be launched in the 4th Quarter, Mars Protocol is one of the most-expected projects. It has been retweeted many times by Do Kwon - the founder of Terra.
- Mars Protocol is built by Delphi Digital so we can expect that it is a legit project.
- The lending landscape on Terra is still relatively small compared to other blockchains, so Mars Protocol has a high chance to take the lead in the market as a first-mover.
- On Terra: Anchor.
- On other blockchains: Aave, Compound (Ethereum), Solend (Solana),...
That is all you need to know about Mars Protocol. If you want to have more information about this project, feel free to comment down below.