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Can 88mph v3 Protocol Actually Power the Next Financial Chapter of DeFi?

Image representing the search for fixed yield rate with the Lunar DeLorean Vehicle; Source: Twitter (@88mphapp)

88mph, a DeFi protocol for providing the fixed term fixed-rate interest, recently announced the launch of its V3 version. 

88mph is a fixed yield protocol

88mph is a decentralised finance protocol. It is an open-source middleware acting as an intermediary between the user and the third party to provide its users with the best-fixed rate of return. Let's briefly understand how 88mph works. The protocol pools the deposits with different maturations and puts the funds in a yield-generating protocol like Aave and Compound. In this way, it earns floating-rate interest.

Here, the debt incurred by the fixed-rate interest of the deposit is offered in the form of floating-rate bonds, which can be bought by someone in exchange for floating-rate interest. Hence, the buyers who buy the floating-rate bonds speculate on the floating-rate yield, which is generated by the protocol and decreases the debt of the pool.

88mph also offers MPH tokens to earn voting rights and the protocol’s revenues.

What V3 upgrade has to offer?

88mph V3 runs on Mainnet and supports USDT, USDC, UNI, DAI, LINK, and leverages under the protocols like Harvest, Compound and Aave.

With the latest upgrade, users will now be able to enjoy a more prominent interest rate oracle and will get the fixed yield rate for the short term deposits and more conservative yield rates for long term deposits. The MPH payback mechanism is removed, and the users can easily top-up, withdraw and roll over their existing V3 deposits.

A new per-deposit system comes with the upgrade, called Yield Tokens (YT). Here, the users can speculate on the future variable rate yields to strengthen the protocol's solvency by purchasing the YT. The users fund a portion of the fixed APR while buying the yield tokens. Note that Yield Tokens are the fungible ERC-20 tokens. Their interest payout gets triggered whenever a fraction of the deposited fund is withdrawn. Users can also trigger the payout manually by using UI.

What is the market trend for MPH tokens after the upgrade?

The price of the MPH token has been decreasing for a week and its currently priced at $39.61 after a decrease of 3.75% over 24-hours.

Closing Thoughts

The upgrade has the interaction with the protocol a lot easier. 88mph protocol mitigates the risk of insolvency by relying on three lines of defence. The v3 upgrade has removed many accountancy burdens and has the help functions to make the integration with 88mph easy. Also, the risks of the smart contracts for 88mph are entirely covered by insurance protocols such as Bridge Mutual and InsuAce.