Litepaper

The MBM Token is an operational CeFI to DeFI bridge.

 

MBM Structured Investment Products

MBM is a decentralized protocol for the issuance and settlement of decentralized structured investment products (SIP) built on the Ethereum network. MBM decentralized protocol consists of the Platform, a collateralization pool smart contract, an issuing smart contract, and MBM Token.

The global market for structured products is worth over $7T USD. These products are typically sold through private banks and investment advisors to ultra-high net worth individuals. These are customizable and targeted investments that may be tied to a specific investor’s market expectations, return requirements, and risk profile. Structured products represent pre-packaged investment strategies based on a combination of securities, options, indices, commodities, debt issuance, or foreign currencies and may fulfill an investor’s objectives for capital protection, leverage, and reduced risk exposures while generating a return. While there is a significant market for structured products and a trend towards retail investors in the traditional financial world, these product offerings are largely absent for DeFi assets.

The customized nature of SIPs comes with a relative lack of liquidity which in turn hinders price discovery and limits secondary market trading. As a result, the full returns from complex SIPs are often not realized until the product’s maturity. MBM’s structured product marketplace improves the technology underpinning how SIPs are created, distributed, traded, and managed over their lifecycle. MBM platform issues structured products as NFTs to allow for quicker execution and lower fees, more data and transparency to improve price discovery, and includes an exchange for secondary trading and early redemption.

What is MBM?

MBM Foundation is developing a decentralized application for interacting
with MBM smart contracts and the MBM Platform through its SDK which connects issuing partners, such as exchanges, wallet,s, and traditional finance market members (CeFi) like banks or brokers, so that they may offer MBM’s NFT-based structured products to their clients.

The MBM Platform simplifies and standardizes structured products making the terms (maturity, selection of underlying assets, rates of return) easier to
understand and the issuance of the products faster.

 

The initial products will provide exposure to:
1. Cryptocurrencies
2. Cryptocurrency indexes
3. Inverse Cryptocurrencies
4. Inverse Cryptocurrency indexes
5. Structured notes based on staking APY’s
6. Volatility Indices
7. Strategy Indexes for structured investment products

 

How Does MBM Work?

Issuing a decentralized structured investment product.

MBM Platform allows the issuance of MBM structured investment products. The issuance of MBM Structured Investment Product requires interactions between the MBM collateralization pool smart contract and the MBM smart contract for the product being minted.
An MBM Token holder can mint an MBM Structured Investment Product by locking MBM tokens as collateral in the MBM collateralization pool smart contract. The contract checks that the collateralization ratio meets the requirements for the selected product. Then the MBM collateralization pool smart contract instructs the MBM smart contract to issue a new MBM Structured Investment Product and add it to the user’s wallet.
The MBM token collateralization ratio will vary by product type and will be adjusted from time to time by the community through MBM’s governance structure. The collateralization pool backs the MBM Structured Investment Product and allows MBM Structured Investment Product holders to redeem or exit products by interacting with MBM smart contracts; there is no clearinghouse and counterparty risk is removed. Fees generated for issuing, trading, or exiting MBM Structured Investment Product remain in the collateralization pool to strengthen it. To further strengthen the collateralization pool, MBM token holders may stake their tokens to the pool through the MBM Platform. The MBM community will determine the staking rewards based on market conditions and the term length of the staking agreement.

 

Exiting a decentralized structured investment  product and payouts

If the MBM Structured Investment Product reaches a maturity date, it is redeemed for market value at the maturity date and the MBM tokens staked plus the investment return are sent to the owner’s wallet.

If the MBM Structured Investment Product does not reach a maturity date or if the user chooses to exit the position early, the user burns the MBM Structured Investment Product by sending it to the MBM smart contract. The destination contract returns the market value of the MBM Structured Investment Product in MBM tokens to the owner’s wallet. Alternatively, the owner may trade the MBM Structured Investment Product with another user through the MBM Platform and receive MBM tokens staked plus or minus the investment return of the MBM Structured Investment Product.

If the MBM Structured Investment Product pays a periodic coupon, the coupon will be paid in MBM tokens and added to the owner’s collateralization stake. If the resulting collateralization ratio exceeds the required amount, the user may withdraw the excess to their wallet.

 

Oracles and Marking-to-market

The valuation of traditional structured products is complex and products are not marked-to-mark on a continuous basis. This lack of price transparency limits the products’ liquidity and trading in secondary markets. MBM Structured Investment Products will be valued using on-chain price oracles supplied by Chainlink. The capacity to mark-to-market on a continuous basis improves the price transparency of MBM Structured Investment Products and improves the liquidity and traceability needed for secondary trading for the products.

 

MBM Token

MBM Token (ERC-20) are utility tokens designed to ensure the settlement of
payments on the MBM platform and to be used as collateral locked in smart contracts to support the issuance of MBM Structured Investment Products. At the time of issuance ownership of MBM tokens grants the right to:

  • become a member of the MBM platform and community
  • to stake MBM tokens through the MBM smart contracts and receiving staking rewards
  • to access a fiat-to-crypto gateway on-ramp through MBM Platform and receive a discount on payment processing fees

In the future, MBM tokens will also be used:

  1.  As smart contract locked collateral for the issuance of MBM Structured Investment Product
  2.  For participation in DAO-style community governance mechanism;
  3. To pay coupons, interest, and staking reward income earned by holders of MBM Structured Investment Products; and
  4. For profit-sharing with institutional issuing partners who integrate the MBM Platform through its SDK.

 

When the white-labeled SDK is available to issuing partners, MBM tokens will
be held by the issuing partners and the use of the tokens will be obfuscated
from the traditional banking clients of the issuing partners.

 

Why hold MBM Tokens?

MBM token holders will have access to the MBM Platform and will be able to earn a return by yield farming the tokens or creating MBM Structured Investment Products. The expansion of the MBM service offering and the growth of the MBM user base will increase demand for the MBM token. As institutional partners and issuing partners onboard the MBM Platform, they will create a supply and demand cycle when they sell more MBM Structured Investment Products and require MBM tokens to add to the MBM collateralization pool.

 

Roadmap

We are already building a product and our development team has already produced a working platform. Over the next four quarters, we will develop, launch and refine our structured products platform and launch the MBM Platform SDK for issuing partners.

 

MBM Foundation Roadmap

Go-to-Market Strategy

Initially, contributors will be able to create MBM Structured Investment Products by staking their MBM tokens as collateral using the MBM Platform for accessing the MBM Structured Investment Product issuing smart contracts. The MBM Platform and its associated wallet include a fiat-to-crypto gateway onramp and allow users to store cryptocurrency in custodial and non-custodial wallets.

 

The MBM Foundation is also developing an SDK for the MBM Platform. Centralized exchanges, DEX, wallets, and other protocols that integrate the SDK will be able to offer MBM Structured Investment Products to their users.

The Foundation also bridges CeFi and DeFi by partnering with traditional finance markets members who will market the co-branded or white-labeled MBM Structured Investment Products available to their clients.

 

Use of Funds

The use of funds for the ongoing development of the MBM Platform.

 

Token Allocation

At launch, there will be 640,000,000 MBM tokens. We are making available for contributors 90,240,000 (14.1%) through the initial listing campaign.

Team and Advisor tokens will be locked up and will vest over a 12-month period. Only a portion of the Team Tokens will be granted at the time of the initial offering and the remainder will be granted over time as the core MBM Foundation team expands.

 

To encourage the adoption of MBM Marketing and Community Building tokens will be disbursed to end-users and financial institution anchors.

The MBM Foundation will hold 61.9% of the tokens. We will store a cold wallet
treasury of MBM tokens to provide last-resort insurance from a catastrophic
event. Half of the Foundation’s allocation (198,080,000 tokens) will be
locked up in a smart contract for a 36-month period.