TiTi Protocol, a multi-asset reserve stablecoin based on decentralized Monopoly Auto Market Maker mechanism.
TiTi Protocol aims to bring a new type of elastic supply algorithm stablecoin solution to DeFi and Web3 that incorporates the Multi-Assets-Reserve mechanism.
Compared with the existing stablecoin, such as USDT, DAI, FEI, etc., TiTi Protocol has six major advantages: decentralized, high capital utilization, more stable efficient guaranteed by risk-proof reserves and multi-asset reserves, resistance to volatility risks.
Its stablecoin TiTi will become a new type of trading medium in the cryptocurrency world, while meeting the investment needs of different investors.
TiTi stable theory
The core of reserve assets endorsed algorithmic stablecoins hinges on the market circulation shall consistently reflect actual market demand. Besides, as a stablecoin pegging to 1 dollar, for the most time, the currency price should stay at 1 dollar enhancing the users' trust. Therefore, the most straightforward idea occur to us: One Protocol can issue stable assets at a price of no less than 1 dollar and repurchase stable assets at a price of no more than 1 dollar. The whole fund obtained from the issuance or sale of assets will be sent to Protocol Reserve Value. The Protocol Reserve Value bears sufficient funds when users redeem or repurchase assets with issued stablecoin. Thus, the protocol can maintain the price at 1 dollar at any time to increase the user's sense of trust in the Protocol.
Monopoly Auto Market Maker System : primary maket for TiTi mint and redeem
Monopoly automatic market maker, plays an important role in TiTi Protocol because compared with the mortgage, casting, or auction, users have the most precise understanding of the transaction process and principles. It is the core mechanism for adjusting the TiTi circulation, which makes a primary TiTi market through specific trading strategies to maintain stability. Users can exchange their assets for another kind of asset they need at the agreed price. In the process of exchange, users only care about two factors, price and trading slippage. In this way, protocol complexity embodies in indicators that are easy for them to understand. The protocol makes it very easy for users to understand how the protocol effectively adjust the two factors, thus gaining trust, which dramatically reduces the user's education costs and avoids unnecessary market panics.
Therefore, TiTi Protocol can be seen as a M-AMM that adjusts the TiTi market circulation actively and effectively. The M-AMM always provides users with bilateral orders for TiTi bid & ask at 1 dollar. When there are more buying demands, TiTi price will push up. It means that the market's demand for TiTi has increased. In response, the protocol will mint more TiTi tokens into the market，increasing ask orders. In contrast, when there are more sell demands, TiTi's price will fall down, it means that the market demand for TiTi is reducing. As a result, the protocol will use the funds accumulated during the previous TiTi issuance to enhance TiTi bid & ask depth. Based on this assumption, the following architecture was designed to ensure sufficient funds to repurchase TiTi at any time, and the market circulation always reflects the genuine demands of users. At the same time, TiTi's inflation and deflation will not affect the value of TiTi in circulation. In TiTi Protocol, the process of updating each round of bid & ask is called the ReOrders mechanism.
The core mechanism of TiTi Protocol is to always use a specific price, assumed to be 1 dollar in this case, as the benchmark to provide the market with fully symmetrical bilateral TiTi bid & ask orders. The mechanism regularly reshapes the order book via established rules, keeping the price peg to 1 dollar. We call the process of restoring the form of the order book the ReOrders mechanism.
As can be seen from the figure, TiTi Protocol provides bilateral orders to the market at the price of 1 dollar in the initial state. After bunches of market transactions, if more users buy TiTi, a price gap > 1 dollar will be created in the orderbook. Hence, TiTi Protocol predicts that users have increased demand for TiTi and will mint more TiTi tokens to fill the gap in the previous order book. At the same time, TiTi Protocol will receive more USDC due to previous purchases. This part of the USDC obtained will be fully used in the buy order as the protocol reserve. Therefore, the market depth of the TiTi-USDC M-AMM will increase, which can optimizes the user's slippage experience when trading.
In contrast, if more users sell TiTi, there will be a price under 1 dollar in the order book. Hence, TiTi Protocol predicts that the user's demand for TiTi is reducing, more TiTi will be buyback through the Protocol and then burned to reduce TiTi market circulation. Thanks to Uniswap for bringing in an automatic market maker mechanism based on the constant function for the DEFI ecosystem, the CFMM. It dramatically reduces the cost of cognition and the use of the market maker mechanism for cryptocurrency users. Therefore, in engineering implementation, TiTi learn from and modify Uniswap's AMM mechanism to implement the ReOrders function in TiTi Protocol.
Market Maker Fund (MMF)
Market Maker Fund (MMF) is a decentralized single-asset yield farming products issued by TiTi Protocol with PAV as the source of dividends. MMF aims to raise more market-making funds and increase market-making depth to further reduce user transaction slippage and enhance the protocol anti-risk ability.
Besides, in the process of marketing make, the profit generated by the user is raised immediately. All the users' funds will enter the M-AMM and be used for market-making in TiTi Protocol.
Risk Reserve (Multi-Asset)
TITI Protocol is highly scalable and supports multiple assets in market making, thereby increasing the scale of funds, meeting the needs of users for multi-token transactions and avoiding single-point risks introduced by the violent fluctuation. The protocol adjusts the proportion of each market-making fund through community governance to improve risk-proof ability and capture alpha benefits.
As mentioned above, part of PAV will be allocated to the Rainy Day Fund to deal with the possible future risks of the protocol in extreme situation , black swan or the grey richo etc. Risk Reserve will be managed through decentralized governance and be used only after the community on-chain governance.
1) Open and Transparent: TiTi Protocol is fully realized through smart contracts on the chain, and the mechanism is open and transparent;
2) High capital efficiency: Compared with over-collateralized stablecoins, TiTi Protocol has a higher capital efficiency;
3) Stronger stable capability: TiTi Protocol brings a new type of elastic supply algorithm stablecoin solution that incorporates the Multi-Assets-Reserve mechanism. The stabilization mechanism does not rely too much on the algorithm and is more efficient which ensures that there is sufficient value support behind each TiTi token;
4) Anti-Volatility risk: By introducing the multi-assets reserve mechanism, the protocol amortizes the risk of individual asset fluctuations, thereby enhancing the risk resistance of the entire system. At the same time, the protocol introduces financial products such as MMF, which creates new game models, to further guarantees the stability of TiTi;
5) Scalability: The architecture design of TiTi Protocol is easy to expand by introducing new type of reserve and the governance mechanism can effectively improve the protocol’s risk control ability during expansion process;
> Website: https://titi.finance
> Docs: https://docs.titi.finance/
> Twitter: https://twitter.com/TiTiProtocol
> Discord: https://discord.com/invite/fWyj7rwvR3
> Medium: https://titiprotocol.medium.com/
> telegram: https://t.me/titiprotocol