AMA with IronFinance
Below you will find a transcript of the AMA between CosmicSwap and IronFinance that took place on the 10th of June.
Azure, 19:01
Alright so we’re ready to start, you’re not muted, we’re hosting the AMA with @IronFinance
Azure, 19:01
Welcome @bluestar1509 How are you doing
ironstar, 19:02
hi guys, cool. good to be here. many gifs and stickers. funny
ironstar, 19:02
glad to see our upcoming partnership on polygon and great to have you on Polygon soon. multi-chain is the way to go. sooner or later.
Azure, 19:02
Yea everyone’s been excited for the AMA
Azure, 19:03
[In reply to ironstar]
I’m all for it
Azure, 19:03
Ok so do you want to start off with a few words on who you are, and what your role is with IronFinance?
ironstar, 19:03
if idk the answer i will counter-AMA ;))
Azure, 19:04
[In reply to ironstar]
[ 💪 Sticker ]
ironstar, 19:04
yes sure i am the co-founder at iron.finance
ironstar, 19:04
we started off in March on BSC and moved to Polygon on 17th May. our current tvl is 800m$ combined and we perform better on Polygon currently.
ironstar, 19:04
Total Value Locked
$845,307,906
(it moved $45M in a few hours)
Azure, 19:05
WOW very impressive
ironstar, 19:05
our mission is simple. to establish ourselves as the #1 algorithmic stablecoin on polygon, bsc and further.
Azure, 19:05
Very ambitious
Azure, 19:05
I love it
Azure, 19:06
Ok so lets get start
Azure, 19:06
One of the key aspects of IRON Finance is the IRON stablecoin. How does that work? How does it keep pegged? How does it get created?
ironstar, 19:08
We believe we have the best algorithmic stablecoin protocol on Polygon and BSC, if not broader. While we are just 3 months young, we have already been very well battle-tested. As well as audited, our second audit by Peckshield is underway. Most recently, during the BTC crash on 19 May 2021 ($43k>$30k), we “outperformed” the most popular stablecoins in terms of price stability. Our IRON stablecoin is partially backed by USDC/BUSD and dynamically by our share-token (TITAN on Polygon and STEEL on BSC).
ironstar, 19:09
@AzureDev will add a link (i can’t, np)
Azure, 19:09
https://ironfinance.medium.com/iron-peg-analysis-bitcoin-crash-on-19-may-2021-6f0ed7999eb7
Entropy Man.exe, 19:10
[In reply to Azure]
A key part of our price stability mechanism is the mint and redeem functions. You can always mint/redeem IRON on iron.finance directly for approximately $1 (minus any fees), so when the market price deviates from $1 then this creates a profitable arbitrage opportunity, which many of our users are more than happy to take advantage of.
raccoon, 19:11
[In reply to Azure]
Well, then I will post my answer too.
IRON is a partially collateralised stablecoin which has been sustaining a very tight peg to the US Dollar thanks to it fractional reserve model, allowing redemptions for arbitrage and for price stabilisation as well. The redeeming function ensures that users can safely rely on the the collateral behind IRON tokens and should the price of IRON start to deviate downwards from the ideal $1.00 price, any user is free to take on the arbitrage opportunity and redeem IRON for collateral, which in turn not only can increase the price of IRON, pushing it back to the preferred peg but also reduces the supply as the redeemed IRON is burned and removed from the circulating supply. Similarly, if the price goes above $1.00, anyone is free to take on the other side of the arbitrage opportunity and mint IRON potentially cheaper than what you can buy it for and sell it on the open market for a hassle-free profit. This in turn increases the supply and places selling pressure on the market to push the price back to $1.00
Revolutionary Spaces, 19:12
As well, minting takes the volatile token (Titan/Steel) off the market. Hodlers benefit either way!
Azure, 19:12
wow very smart
Azure, 19:13
Which leads me to my next question
Azure, 19:13
Your IRON stablecoin is created with USDC and TITAN (Polygon) / STEEL (BSC) as collateral. Do these have other uses?
raccoon, 19:13
[In reply to Azure]
Both TITAN and STEEL is a share-token, a governance token and a token used by the protocol as collateral in a dynamic way. By incentivising purchases and staking of these tokens, we create a constant demand for them, so the IRON redeeming function can rely on the STEEL and TITAN market whenever needed. In exchange for this contribution from the users, the protocol pays the profit it makes from the IRON minting and redeeming fees to the STEEL/TITAN staking pool and in the case of IRON on Polygon, max. 75% of the USDC collateral behind IRON token is invested to generate a more sustainable passive income to the eco system that we can pass onto the TITAN/STEEL staking pool to even further incentivise purchases and staking, because staking reduces the effective circulating supply. Last but not least, these two tokens are burned when they’re used to mint IRON tokens and minted when IRON is redeemed.
Azure, 19:14
I was looking on your website, app.iron.finance, but I didn’t fully understand what dragonball was, can you please explain
raccoon, 19:16
[In reply to Azure]
Sure, it’s probably the very first real-style lottery, initially launched on the BSC then became live on Polygon as well. In short, you can choose your own numbers from two tables, 4 from table A and 1 from table B and you can win with your numbers in any order, so it’s like a real lottery ticket that you buy at your petrol station. All the ticket revenue is used to increase the prize fund and a 30% tax is charged on the winners. 70% of this tax is used to burn TITAN tokens and 30% goes straight back to the prize fund for the next round.
raccoon, 19:17
[In reply to raccoon]
Even better, 1 ticket costs only 2 IRON ($2) and the prize is denominated in IRON as well, so it’s a cool stablecoin lottery.
Revolutionary Spaces, 19:17
Everything is verified as random using Chainlink. No ones won the big pool just yet, but we’ve had several winners on the second and third tier.
Azure, 19:18
[In reply to Revolutionary Spaces]
Nice very impressive
Revolutionary Spaces, 19:18
https://docs.iron.finance/products/dragonball-lottery ← learn more
Azure, 19:18
Talk to me about DiamondHand. What is DIAMOND? How does these synthetics work and what are they used for?
raccoon, 19:19
[In reply to Azure]
The model behind our synths (dTokens) are the very same that you have read above about IRON, that is how they have been maintaining the peg. However, instead of BUSD and STEEL, they use the native token and DND. For instance, in the case of dBNB, we use BNB and DND tokens collateral.
raccoon, 19:20
The redeeming and minting function is the same as with IRON, so the price stability model is also the same. Very efficient system with a well proven track record.
ironstar, 19:20
the current jackpot is 51k IRON (=51k USD) https://dragonball.iron.finance/
we will add 100k$ to the prize pool when we hit 1B USD TVL (alpha leakz)
raccoon, 19:20
For the record, we’ve got dBNB, dBTC, dETH, dADA and dDOT. We may add more synths later.
Revolutionary Spaces, 19:21
[In reply to ironstar]
Love those alpha leakz
Azure, 19:21
[In reply to raccoon]
can I use those synthetics to convert to real tokens?
raccoon, 19:21
Also, we’re going to deploy our own lending platform, which is going to link these synths (dTokens) with IRON, so you’ll be able to lend and borrow in IRON and in dTokens as well.
raccoon, 19:21
[In reply to Azure]
Of course, you can redeem them for collateral just like you can redeem IRON for collateral, absolutely the same model.
raccoon, 19:22
This is how they’ve been stable.
Revolutionary Spaces, 19:22
You can learn more about DiamondHand here -> https://docs.diamondhand.fi/
ironstar, 19:22
[In reply to raccoon]
tldr:
use cases: iron minting, iron price stability, seigniorage revenue (our stakers receive stablecoin rewards!), lending collateral (own lending platform upcoming in June), synthetic tokens (upcoming in July). We besides that, we have been integrated with pretty much all popular dexes, vaults, 3rd party farms, stableswap, pools, etc.
Azure, 19:24
Nice, what does it mean that Iron is not fully collateralised?
raccoon, 19:25
[In reply to Azure]
It’s actually a bit misleading because it gives the impression that you may be able to redeem it for less than $1 which shouldn’t be the case. It simply means that we use the native token, USDC or BUSD as collateral partially, rather than using these fiat backed tokens only and when you redeem, you receive USDC or BUSD tokens which equals to the effective collateral ratio, the percentage of USDC or BUSD held in the protocol and the rest in TITAN or STEEL.
ironstar, 19:26
our current IRON supply is at 270M. Effective collateral ratio is 80.35% this means that 80.35% of our IRON token is backed by USDC. that’s around 215 million USD in our bank 😉. The remaining 19.65% (1-ECR, or 1–80.35%) is backed by our TITAN dynamically.
Note, this percentages change, this flexibility is part of the IRON price stability and a core IRON protocol mechanism.
raccoon, 19:26
This model is not only very efficient but it allows the users to take advantage of very impressive yields as well while investing into a stablecoin.
raccoon, 19:27
We’ve been offering one if not the highest APRs on BSC for over 3 months now and the same goes for Polygon ever since we launched on May 18.
raccoon, 19:27
All this with complete price stability.
ironstar, 19:28
to end this question, i can share a nice article which compares IRON and other stablecoins (DAI, USDT, USDC, and some other less successful ones). We are very capital efficient, more than all the aforementioned big stablecoins.
https://ironfinance.medium.com/fractionalized-stablecoins-and-capital-efficiency-6322ebb1b44
Revolutionary Spaces, 19:29
It might help to compare to other stablecoins:
1. Something like DAI is over collateralized: to make one you need 1.5x the collateral.
2. USDC is backed by $1 in Coinbase’s vaults
3. Tether is… well who the hell knows.
IRON is partially collateralized making it much easier to mint, use, and grow while remaining stable as a rock.
Azure, 19:30
This all seems really nice but what brought you over to Polygon from BSC?
raccoon, 19:31
[In reply to Azure]
Expanding to Polygon has obviously proven to be a good choice as we all can see, because Polygon is cheap, fast and efficient, so people naturally want to transact on it and it’s also more decentralised than BSC. With this move we became a cross chain protocol and has increased our footprint massively.
ironstar, 19:31
The hunger for more 😛
Trends, first-mover advantage, many partnership opportunities, low fees, fast blocktime, proximity to Ethereum, amount of bridges, DeFi growth potential on Polygon.
Azure, 19:32
Polygon is definitely the step moving forward and my next question you guys sort of answered already but you’ve grown quickly on Polygon to a TVL of 800M+ what do you attribute that to?
Revolutionary Spaces, 19:33
Hahaha…
I believe folks are seeing the system work during a very volatile period. IRON has gone through several different market events that shook things up (you all I am sure can think of them) but maintained peg as well or better than other major stablecoins like DAI or Tether.
raccoon, 19:33
People by now know that we’ve been safe, reliable and a prudent team.
raccoon, 19:33
We’ve been safe-keeping user funds ever since we have launched on BSC.
Revolutionary Spaces, 19:34
And providing high APR for HODLERS
raccoon, 19:34
And this has been the no.1 priority ever since we launched. Price stability, significant yields and safety.
ironstar, 19:34
[In reply to ironstar]
update: it moved 7M usd since start of AMA
Total Value Locked
$852,633,630
raccoon, 19:34
I think this has allowed us to grow rapidly in a very short period of time.
Azure, 19:35
What types of other features do you have in development on Polygon or BSC?
raccoon, 19:35
[In reply to Azure]
Right now synths and lending is coming to Polygon. Synths is already available on BSC.
Revolutionary Spaces, 19:35
We’ve started talking about it briefly, but we’re working on some pretty great stuff like synthetics and lending!
Azure, 19:36
Sounds like a packed roadmap
Revolutionary Spaces, 19:37
We’re excited for it and seeing even more use for the volatile token from those and future updates.
ironstar, 19:37
our lending platform will utilize our IRON stablecoin and TITAN token for collaterals, and other liquid cryptos (btc, eth, matic). it will be a great product, really.
raccoon, 19:37
[In reply to Azure]
We publish the roadmap in a few week increments because this gives us flexibility to quickly react and meet market demands, so we can best serve our users and this has been working very well.
Azure, 19:38
Ok so our last question, Where can our community find you guys and learn more about Iron Finance?
raccoon, 19:38
@ironfinance for Telegram
polygon.iron.finance
Twitter: https://twitter.com/IronFinance
Azure, 19:38
Excellent, I think we have a few minutes for a few questions from the community.
Join our CosmicSwap Community:
🌐 Website: CosmicSwap.finance
👩💻 Github: Github.com/CosmicSwap
🐤 Twitter: Twitter.com/CosmicSwap
📕 Medium: CosmicSwap.medium.com
◀ Telegram: t.me/CosmicSwapChat
📜 Documentation: docs.CosmicSwap.finance
