Jerry：Hello everyone, welcome to today's AMA held in the TopoBlock-Coinlist Chinese community.

Jerry：I'm Jerry, the co-founder of TopoBlock and the host of today's AMA.

Jerry：This event is supported by , Lianwen, Block Rhythm, Mars Finance, and Snapfingers.

Jerry：Thanks to the support of the above institutions, the content of AMA will be released to media platforms and all official channels of Standard Protocol and TopoBlock after the end.

Jerry：Today's AMA activity is divided into two parts. The first part is the Jerry dialogue part. The host and the guests have one-on-one questions and answers about the project itself. The second part is free question and answer. Group friends can freely ask guests questions, and guests are free to choose some questions to answer.

Jerry：Before the event starts, let me briefly introduce TopoBlock. Topoblock is a one-stop market consulting service and knowledge sharing platform for the blockchain industry. Focus on finding high-quality projects in Web 3.0 and grow with them.

Jerry：The topic of today's AMA is "The First Collateral Elastic Algorithm Stablecoin Protocol Based on Polkadot Ecology—Standard Protocol", and the guest is Standard Protocol's consultant Momo.

Welcome MoMo to be the guest of Coinlist Chinese community.

Jerry: Could you please briefly introduce the team and what the standard protocol does?

Momo：The Standard protocol is the first synthetic asset-based hybrid mortgage elastic supply stablecoin based on the Polkadot ecosystem, and has obtained the web3 foundation grant. We implemented a hybrid mechanism for minting stablecoins and included a new paradigm for liquidity. Compared with other algorithmic stablecoins, we indirectly adjust the relationship between supply and demand through mortgage rate adjustment, which is more secure in terms of capital adequacy. And Standard realizes leveraged trading and arbitrage through the built-in AMM, becoming a catalyst for financial activities of other parallel chains. Standard can also generate protocols that can be used in synthetic asset markets through decentralized oracles.

In one sentence, Standard is an algorithm-backed stablecoin. It has the characteristics of Dai, but with the elastic supply of Ampleforth. What makes us unique is our system of three token modules, leveraged from the blockchain. Users will mainly participate in Yield farming and liquidity of standard governance tokens. Three words include three token systems, algorithm support and liquidity supply capabilities. The Standard protocol is a Collateralized Rebasable Stablecoin (Collateralized Rebasable Stablecoin) protocol based on Polkadot ecology and synthetic assets. In addition to digital currencies, the types of synthetic assets also include stocks, index funds, commodities and legal currency funds. Standard aims to connect traditional and cryptocurrency markets.

Team: Standard is a global team. We already have very professional and experienced technical development and business development teams in the United States, South Korea, and China. Through our existing partners, we will engage with communities in many different regions such as China, Korea, the United States, the Middle East, Eastern Europe, and Southeast Asia. Also in the process of reaching out to KOLs in Japan and Nigeria. Standard has been supported by some large Polkadot ecological communities such as PolkaKR, PolkaBase, etc. To put it simply, Standard has a global team, the best Substrate development members in Korea, and the top Polkadot community in China.

Jerry:  Algorithmic coins in this round of bull market began to explode in December last year, from Ample to Basis/Frax to Fei later, what do you think are the current problems with algorithmic stable coins? Which of these problems does Standard solve?

Momo：Regarding solutions, Standard was also born with the goal of solving practical problems

The three major dilemmas of algorithmic stablecoins are:

• Prices of algorithmic stablecoins without collateral are unstable and volatile;

• The oracle machine is too centralized and lacks a decentralized ecosystem reward mechanism;

• Auctions in the CDP model are difficult to track and have high barriers, leading to giant whales controlling the auction.

Standard solution:

1. Standard allows cross-chain digital assets as collateral;

2. Standard has implemented a decentralized oracle reward mechanism;

3. Efficient liquidation based on automatic market makers, providing everyone with the opportunity to use MTR stablecoins to purchase assets at a lower price

Jerry:  The most important thing about algorithmic stablecoins is the rebase mechanism. Most of the previous algorithmic coins have experienced systematic capital risks due to entering a "negative spiral". Can you explain to us roughly how the standard protocol maintains system stability? How many modules does Standard have?

Momo：Regarding the rebase mechanism, we are trying a different method from MakerDao's soft peg, the adjustment mechanism of the token supply is not based on the existing supply, but according to the newly minted MTR supply. The issuance ratio of MTR (that is, the reciprocal of the mortgage ratio) is completely determined by governance, within an epsilon range. But when the MTR price exceeds the epsilon range (0.1-0.5%), the emergency shutdown mechanism will be triggered, and MTR will not be minted in the next cycle. Starting from the next cycle, the system will be responsible for adjusting the MTR issuance ratio and stabilizing the peg between the MTR price and the US dollar until the MTR price returns to three quarters of the epsilon range. If the MTR price is higher than the USD, more MTR will be minted in the next cycle. To put it simply, Standard fully trusts the Standard community governance, as long as they set the mortgage ratio well, but when the MTR price exceeds a certain range, the system will take responsibility. The elastic supply mechanism is a line of defense, and the emergency shutdown mechanism can prevent attacks and stabilize the price of the system.

There are 9 modules in total, and the specific information of the modules can refer to the white paper.

Jerry: 4. Can you explain why the three-coin system is used? How to empower MTR, LRT and STND? How is the online STND issued? Is the online format erc20? How will it be migrated to the main network in the future?

Momo：We have three tokens, the stable coin MTR, the liquidity token LTR, and the governance token STND.

MTR is a stable currency generated by the Standard system. Holders can use MTR as a medium of exchange. LTR is a token of a liquidity provider, which represents the share from the AMM module, similar to the LP token in Uniswap. STND is the governance token. Holders of STND can obtain block rewards and participate in governance through stakes. STND is used as a transaction fee. Meter (MTR) is a stablecoin minted by collateralizing digital assets. Similar to Dai, the stablecoin maintains its value at $1. MTR can be used to buy other liquidated assets at a discount, and will only be recalculated if its price deviates sufficiently (>3.5%) from the target peg.

LTR is a liquidity token, which represents the rights and rewards of the AMM module to holders who provide liquidity. Standard has built-in AMMs to facilitate peer-to-peer (P2P) transactions, such as trades liquidating collateral for arbitrage opportunities.

STND is a governance token that can be used to pay fees, earn staking rewards and participate in on-chain governance.

This is why Standard is a stablecoin protocol, but has three tokens.

Standard will launch Gate IEO (officially open at 14:00 on the 28th), and will open transactions on Uniswap and Gate at 22:00 on the 29th.

Currently ERC20. We will announce the main network later, and we are currently in contact with BSC, adhering to our concept of linking everything.

Jerry: We have learned that Standard has a built-in AMM and oracle machine. Does this built-in AMM use the definite product formula of Uniswap? Where does the price of the oracle come from? Is it a centralized oracle or a decentralized oracle?

Momo：The AMM design logic is similar to the Uniswap V2 model, and the price information comes from different oracle clients (such as Binance, Coinbase, HydraDX, etc.), so that the price cannot be manipulated by a single entity.

Decentralized oracle: Different from the existing Oracle centralized price feeding mechanism, Standard randomly selects the price feeder from the pledgers, and then confirms it through the verifier. There is an incentive mechanism for both parties, so as to ensure the ecological participants. enthusiasm;

Jerry:  According to the previous experience with other algorithmic stablecoins, the growth of the entire system can only be guaranteed by allowing the stablecoin to obtain a relatively continuous increase in liquidity. The larger the volume, the higher the security of the system, so we want to know the Standard How is the continuous growth of liquidity planned?

Momo：The biggest risk of stablecoins comes from the rapid price drop, and users liquidate their assets, resulting in a rapid price drop and causing a death spiral. This type of black swan event happened in early 2020. In response to this, Standard adopts an efficient liquidation mechanism based on AMM, that is, when the pledged assets expire, they will be automatically liquidated at a discount through the AMM module, and users can purchase discounted assets for arbitrage. When the bear market is guaranteed, STND holders still have the opportunity to profit. At the same time, the price stability of MTR requires people to pay stability fees, which will lead to weak users' willingness to use. However, in the Yield Farming module, we designed a way to earn STND by staking MTR to motivate users to use MTR. Ensure sufficient liquidity. We allocated 30% of tokens for Yield farming to ensure sufficient liquidity, which is our largest percentage in token allocation.

Jerry: I saw that Standard has cooperated with a bank named Gingko Bank, can you share the cooperation details? Could you tell us about your new partners in the future?

Momo：In terms of partners, we are currently cooperating with a financial institution called Gingko Bank. Ginko Bank has obtained licenses and licenses from the Korean government for encryption transactions. We will access the offline payment module and introduce practical applications, and we already have plans for actual cooperation. This is super good news not only for us, but for the entire DeFi industry. Moreover, we have established a partnership with Plasm Network, a multi-virtual machine scalable smart contract platform on Polkadot, which will introduce a new standard for synthetic assets to the Plasm Network ecology. We are also cooperating with Patract, a Wasm smart contract platform, to support Standard Protocol's access to Wasm contract functions. Finally, we have reached a cooperation with Polkadot's ecological identity protocol Litentry, which means that we will use Litentry's cross-chain authentication technology in the next version update to fully evaluate the contribution value of users in all aspects (for example: collateral value, community maintenance, content production quantity and quality). This will allow users in the Standard Protocol ecosystem to have greater motivation to build on various DApps and enhance the rights of community governance.

Jerry：8. What are the plans for community growth and ecological construction? For example, some community reward activities, hackathon competitions and so on.

We have launched an ambassador program, which will help us a lot in building regional communities and enable us to better communicate with local investors and users.

Momo：Regarding rewards, our token model includes incentive tokens for developers, and implements the STND reward scheme for community developers. At the same time, we will also give token incentives to early community participants and regional ambassadors.

Jerry：Thank you Momo for your wonderful sharing. This is the end of our first phase of AMA. Now we will start the second session, a free question and answer session. The guests will choose 3 questions to answer, and the small partners who are selected will get Polkastarter’s IDO A copy of the white list, because the deadline for the white list is at noon today, so the questions have been selected in advance in the morning, and now I will answer the questions of the friends.

Friends question:Some time ago, the well-known algorithmic stablecoin project FEI caused a large number of investors to suffer serious losses due to various reasons. Does the standard project have any specific measures to prevent things like FEI from happening? What is the specific difference between standard and fei?

Momo：Both our elastic supply mechanism and AMM DEX can prevent such events from happening. The issuance ratio of MTR (that is, the reciprocal of the mortgage ratio) is completely determined by governance, within an epsilon range. But when the MTR price exceeds the epsilon range (0.1-0.5%), the emergency shutdown mechanism will be triggered, and MTR will not be minted in the next cycle. From the next cycle, the system will be responsible for adjusting the issuance ratio of MTR, and the emergency shutdown mechanism can prevent attacks and stabilize the price of the system.

In addition, Standard adopts an efficient liquidation mechanism based on AMM, that is, when the pledged assets expire, they will be automatically liquidated at a discount through the AMM module, and users can purchase discounted assets for arbitrage. Sufficient liquidity can be guaranteed. Avoid the selling pressure event after Fei has a loophole.

Friends question:Is only STND ERC20? LTR and MTR only in substrate?

Momo:  Currently yes, but we may propose other platform implementations, deploy plasma in evm, or deploy in cosmwasm, but we currently cannot afford to maintain the system in ETH. Maybe after Ethereum 2.0 comes out, there will be lower gas fees. I believe that the chain bridge will fully support the two-way bridge to realize the flow of assets between Standard substrate and Ethereum.

Friends question:Can algorithmic stablecoins really achieve long-term viability? Will

algorithmic stablecoins always be subject to extreme expansionary and

contractionary cycles?

Momo：The core of this stablecoin mechanism lies in AMM DEX, for example: AMM DEX has always been open, and only METER is used for stablecoins. Its function is: when the price of collateral plummets and reaches the liquidation line, for example, when the price of 1ETH is 1500USDT, the mortgage generates 1000METER (mortgage rate 150%), and the specified liquidation rate is 120%, then when the price of ETH is 1200USDT, 1ETH will automatically enter from the vault DEX is charged into the ETH-METER pool, and users can purchase this part of ETH at a price of 1200METER or even lower to realize arbitrage. As long as the purchase price of the user exceeds 1000 METER and can cover the number of METER generated by the earliest user mortgage ETH, it is equivalent to the completion of liquidation.

In another case, the price of METER plummets to 0.95USDT or below, triggering the first threshold. We adjust the mechanism to adjust the number of newly generated METER by adjusting the mortgage rate of the newly added ETH collateral. Lower, such as 0.9USDT, we trigger the second threshold, that is, the entire mortgage asset sector is shut down (the DEX sector is still operating). But generally speaking, because we have DEX, if the price of METER is as low as 0.99USDT, users can also use METER to buy ETH at a low price (we use our own oracle to feed the price), which is equivalent to 1500USDT of ETH. You use 1500METER that is 1500*0.99USDT to buy and you can buy it, and then you withdraw ETH and then sell it into USDT and then buy METER, which can be used for arbitrage, so as to ensure that the entire METER price returns to normal.

Jerry：This is the end of today's AMA, thanks again to Momo for the wonderful sharing.

In the future, TopoBlock will share high-quality knowledge and content with you on major platforms. Please stay tuned to the TopoBlock-Coinlist Chinese community and @Topoblock. We will continue to output high-quality content on Coinlist and other public offering platforms in the group in the near future. All the content of this AMA will also be released on all official channels, so stay tuned!