White Paper
Search…
Anti Bear Market Protocol

Abstract

As the bull market is going on, people are very confident about their “long” positions on Bitcoin. But along with confidence comes a small pinch of doubt about losing their gains by rapid market decline overnight. Every investor goes through this dilemma, and this is when ABM Protocol(Anti Bear Market Protocol) was born.
Someone who is well versed with the crypto/stock market always knows that whatever that goes up always comes back down sooner or later. Knowing this, it is also our major responsibility to capitalize the opportunity when the asset price is on top and buy back the asset at the bottom .This is a basic yet most powerful and important strategy to abide by . It took bitcoin 3 years to get back to the peak again. The bitcoin might still grow unpredictably, and it is of atmost importance for anyone to capitalize on the gains and Stop/Prevent the market from eating your gains.

.BTC

The idea of capitalizing the upside potential and preventing downside, gave birth to "dotBTC" . The innovative derivative behind abm protocol, whose value mimics the BTC and keeps growing with BTC value as price grows , but stops mimicking BTC when its price declines and the price of "dotBTC" stays around ATH (All Time High) value keeping "dotBTC" investors in a safe spot preventing market to eat their gains.
Now, for all those who are puzzled , from where does “dotBTC” derive its value?
That’s pretty simple, “dotBTC” value is derived from vaults which hold assets whose value is always greater than derivative asset value.
during Uptrend: dotBTC follows BTC in an uptrend.
during Sidetrend: dotBTC stays constant(local high).
during Downtrend: dotBTC stays at the ATH.
About the ABM Protocol
The ABM Protocol, built on the Ethereum blockchain, enables users to create currency. Current elements of the ABM Protocol are the dotBTC , ABM Collateral Vaults, Oracles, and Voting. ABM DAO governs the ABM Protocol by deciding on key parameters (e.g., stability fees, collateral types/rates, etc.) through the voting power of ABM holders.

Introduction

Beginning in 2020, the ABM DAO project operated with developers working together on the first iterations of code, architecture, and documentation.
The white paper described how anyone could generate dotBTC using that system by leveraging Ethereum (ETH) as collateral through unique smart contracts known as Collateralized Debt Positions (CDPs).
The dotBTC System, today called the ABM Protocol, now accepts as collateral any Ethereum-based asset that has been approved by ABM holders, who also vote on corresponding Risk Parameters for each collateral asset. Voting is a critical component of the ABM decentralized governance process.

In ABM Protocol We Trust

Blockchain technology provides an unprecedented opportunity to ease the public’s growing frustration with—and distrust of—dysfunctional centralized financial systems. By distributing data across a network of computers, the technology allows any group of individuals to embrace transparency rather than central-entity control. The result is an unbiased, transparent, and highly efficient permissionless system—one that can improve current global financial and monetary structures and better serve the public good.
Bitcoin was created with this goal in mind. But, while Bitcoin succeeds as a cryptocurrency on a number of levels, it is not ideal as a medium of exchange because its fixed supply and speculative nature results in volatility, which prevents it from proliferating as mainstream money.
The dotBTC , on the other hand, succeeds where Bitcoin fails precisely because dotBTC is designed to minimize price volatility. A decentralized, unbiased, collateral-backed cryptocurrency that is soft-pegged to the ATH of dotBTC .

An Overview of the ABM Protocol and Its Features

The ABM Protocol

The ABM Protocol is one of the robust dapps on the Ethereum blockchain.
The ABM Protocol is managed by people around the world who hold its governance token, ABM. Through a system of scientific governance involving Executive Voting and Governance Polling, ABM holders govern the Protocol and the financial risks of dotBTC to ensure its stability, transparency, and efficiency. One ABM token locked in a voting contract equals one vote.

The dotBTC

The dotBTC is a decentralized, unbiased, collateral-backed cryptocurrency soft-pegged to the ATH of BTC. dotBTC is held in cryptocurrency wallets or within platforms, and is supported on Ethereum and other popular blockchains.
dotBTC is easy to generate, access, and use. Users generate dotBTC by depositing collateral assets into ABM Vaults within the ABM Protocol. This is how dotBTC is entered into circulation and how users gain access to liquidity. Others obtain dotBTC by buying it from brokers or exchanges, or simply by receiving it as a means of payment.
Once generated, bought, or received, dotBTC can be used in the same manner as any other cryptocurrency: it can be sent to others, used as payments for goods and services, and even held as savings through a feature of the ABM Protocol called the dotBTC Savings Rate (DSR).
Every dotBTC in circulation is directly backed by excess collateral, meaning that the value of the collateral is higher than the value of the dotBTC debt, and all dotBTC transactions are publicly viewable on the Ethereum blockchain.

What Properties of dotBTC Function Similarly to Money?

Generally, money has four functions:
  1. 1.
    A store of value
  2. 2.
    A medium of exchange
  3. 3.
    Satisfy Speculative demand
  4. 4.
    A standard of deferred payment
dotBTC has properties and use cases designed to serve these functions.
dotBTC as a Store of Value
A store of value is an asset that keeps its value without significant depreciation over time. Because dotBTC is pegged, it is designed to function as a store of value during downtrend.
dotBTC as a Medium of Exchange
A medium of exchange is anything that represents a standard of value and is used to facilitate the sale, purchase, or exchange (trade) of goods or services. The dotBTC can be used around the world for all types of transactional purposes.
Satisfy Speculative demand
The speculative motive of the people relates to the desire to hold one’s resources in liquid form in order to take advantage of market movements regarding the future changes in the rate of interest . The notion of holding money for speculative motive was a new and revolutionary Keynesian idea.
Similarly Holding dotBTC gives the holder an opportunity to make profit in both cases of price fluctuation above or below the target price of dotBTC
dotBTC as a Standard of Deferred Payment
dotBTC is used to settle debts within the ABM Protocol (e.g., users use dotBTC to pay the stability fee and close their Vaults). This benefit separates dotBTC from other stablecoins.

Collateral Assets

dotBTC is generated, backed, and kept pegged through collateral assets that are deposited into ABM Vaults on the ABM Protocol. A collateral asset is a digital asset that ABM holders have voted to accept into the Protocol.
To generate dotBTC, the ABM Protocol accepts as collateral any Ethereum-based asset that has been approved by ABM holders. ABM holders must also approve specific, corresponding Risk Parameters for each accepted collateral (e.g., more stable assets might get more lenient Risk Parameters, while more risky assets could get stricter Risk Parameters). Detailed information on Risk Parameters is below. These and other decisions of ABM holders are made through the ABM decentralized governance process.

ABM Vaults

All accepted collateral assets can be leveraged to generate dotBTC in the ABM Protocol through smart contracts called ABM Vaults. Users can access the ABM Protocol and create Vaults through a number of different user interfaces (i.e., network access portals), including ABM Borrow and various interfaces built by the community. Creating a Vault is not complicated, but generating dotBTC does create an obligation to repay the dotBTC, along with a Stability Fee, in order to withdraw the collateral leveraged and locked inside a Vault.
Vaults are inherently non-custodial: Users interact with Vaults and the ABM Protocol directly, and each user has complete and independent control over their deposited collateral as long the value of that collateral doesn’t fall below the required minimum level (the Liquidation Ratio, discussed in detail below).

Interacting with a ABM Vault

  • Step 1: Create and Collateralize a Vault
    A user creates a Vault via the ABM Borrow portal by funding it with a specific type and amount of collateral that will be used to generate dotBTC. Once funded, a Vault is considered collateralized.
  • Step 2: Generate dotBTC from the Collateralized Vault
    The Vault owner initiates a transaction, and then confirms it in her unhosted cryptocurrency wallet in order to generate a specific amount of dotBTC in exchange for keeping her collateral locked in the Vault.
  • Step 3: Pay Down the Debt and the Stability Fee
    To retrieve a portion or all of the collateral, a Vault owner must pay down or completely pay back the dotBTC she generated, plus the Stability Fee that continuously accrues on the dotBTC outstanding. The Stability Fee can only be paid in dotBTC.
  • Step 4: Withdraw Collateral
    With the dotBTC returned and the Stability Fee paid, the Vault owner can withdraw all or some of her collateral back to her wallet. Once all dotBTC is completely returned and all collateral is retrieved, the Vault remains empty until the owner chooses to make another deposit.
Importantly, each collateral asset deposited requires its own Vault. So, some users will own multiple Vaults with different types of collateral and levels of collateralization.

Liquidation of Risky ABM Vaults

To ensure there is always enough collateral in the ABM Protocol to cover the value of all outstanding debt (the amount of dotBTC outstanding valued at the Target Price), any ABM Vault deemed too risky (according to parameters established by ABM Governance) is liquidated through automated ABM Protocol auctions. The Protocol makes the determination after comparing the Liquidation Ratio to the current collateral-to-debt ratio of a Vault. Each Vault type has its own Liquidation Ratio, and each ratio is determined by ABM voters based on the risk profile of the particular collateral asset type.

ABM Protocol Auctions

The auction mechanisms of the ABM Protocol enable the system to liquidate Vaults even when price information for the collateral is unavailable. At the point of liquidation, the ABM Protocol takes the liquidated Vault collateral and subsequently sells it using an internal market-based auction mechanism. This is a Collateral Auction.
The dotBTC received from the Collateral Auction is used to cover the Vault’s outstanding obligations, including payment of the Liquidation Penalty fee set by ABM voters for that specific Vault collateral type.
If enough dotBTC is bid in the Collateral Auction to fully cover the Vault obligations plus the Liquidation Penalty, that auction converts to a Reverse Collateral Auction in an attempt to sell as little collateral as possible. Any leftover collateral is returned to the original Vault owner.
If the Collateral Auction does not raise enough dotBTC to cover the Vault’s outstanding obligation, the deficit is converted into Protocol debt. Protocol debt is covered by the dotBTC in the ABM Buffer. If there is not enough dotBTC in the Buffer, the Protocol triggers a Debt Auction. During a Debt Auction, ABM is minted by the system (increasing the amount of ABM in circulation), and then sold to bidders for dotBTC.
dotBTC proceeds from the Collateral Auction go into the ABM Buffer, which serves as a buffer against an increase of ABM overall supply that could result from future uncovered Collateral Auctions and the accrual of the dotBTC Savings Rate (discussed in detail below).
If dotBTC proceeds from auctions and Stability Fee payments exceed the ABM Buffer limit (a number set by ABM Governance), they are sold through a Surplus Auction. During a Surplus Auction, bidders compete by bidding increasing amounts of ABM to receive a fixed amount of dotBTC. Once the Surplus Auction has ended, the ABM Protocol autonomously destroys the ABM collected, thereby reducing the total ABM supply.
Example (Collateral Auction Process):A large Vault becomes undercollateralized due to market conditions. An Auction Keeper then detects the undercollateralized Vault opportunity and initiates liquidation of the Vault, which kicks off a Collateral Auction for, say, 50 ETH.
Each Auction Keeper has a bidding model to assist in winning auctions. A bidding model includes a price at which to bid for the collateral (ETH, in this example). The Auction Keeper uses the token price from its bidding model as the basis for its bids in the first phase of a Collateral Auction, where increasing dotBTC bids are placed for the set amount of collateral. This amount represents the price of the total dotBTC wanted from the collateral auction.
Now, let's say the Auction Keeper bids 2 dotBTC for the 50 ETH to meet this amount. The dotBTC bid is transferred from the Vault Engine to the Collateral Auction contract. With enough dotBTC in the Collateral Auction contract to cover the system's debt plus the Liquidation Penalty, the first phase of the Collateral Auction is over.
In order to reach the price defined in its bidding model, the Auction Keeper submits a bid in the second phase of the Collateral Auction. In this phase, the objective is to return as much of the collateral to the Vault owner as the market will allow. The bids that the Auction Keepers place are for fixed dotBTC amounts and decreasing amounts of ETH. For instance, the bidding model of the Keeper in this example seeks a bid price of 0.05 dotBTC per ETH, so it offers 2 dotBTC for 40 ETH. Additional dotBTC for this bid is transferred from the Vault Engine to the Collateral Auction contract. After the bid duration limit is reached and the bid expires, the Auction Keeper claims the winning bid and settles the completed Collateral Auction by collecting the won collateral.

Key External Actors

In addition to its smart contract infrastructure, the ABM Protocol involves groups of external actors to maintain operations: Keepers, Oracles, and Global Settlers (Emergency Oracles), and ABM community members. Keepers take advantage of the economic incentives presented by the Protocol; Oracles and Global Settlers are external actors with special permissions in the system assigned to them by ABM voters; and ABM community members are individuals and organizations that provide services.

Keepers

A Keeper is an independent (usually automated) actor that is incentivized by arbitrage opportunities to provide liquidity in various aspects of a decentralized system. In the ABM Protocol, Keepers are market participants that help dotBTC maintain its Target Price : they sell dotBTC when the market price is above the Target Price, and buy dotBTC when the market price is below the Target Price. Keepers participate in Surplus Auctions, Debt Auctions, and Collateral Auctions when ABM Vaults are liquidated.

Price Oracles

The ABM Protocol requires real-time information about the market price of the collateral assets in ABM Vaults in order to know when to trigger Liquidations.
The Protocol derives its internal collateral prices from a decentralized Oracle infrastructure that consists of a broad set of individual nodes called Oracle Feeds. ABM voters choose a set of trusted Feeds to deliver price information to the system through Ethereum transactions. They also control how many Feeds are in the set.
To protect the system from an attacker attempting to gain control of a majority of the Oracles, the ABM Protocol receives price inputs through the Oracle Security Module (OSM), not from the Oracles directly. The OSM, which is a layer of defense between the Oracles and the Protocol, delays a price for one hour, allowing Emergency Oracles or a ABM Governance vote to freeze an Oracle if it is compromised. Decisions regarding Emergency Oracles and the price delay duration are made by ABM holders.

Emergency Oracles

Emergency Oracles are selected by ABM voters and act as a last line of defense against an attack on the governance process or on other Oracles. Emergency Oracles are able to freeze individual Oracles (e.g., ETH Oracles) to mitigate the risk of a large number of users trying to withdraw their assets from the ABM Protocol in a short period of time, as they have the authority to unilaterally trigger an Emergency Shutdown.

DAO Teams

DAO teams consist of individuals and service providers, who may be contracted through ABM Governance to provide specific services to ABM DAO. Members of DAO teams are independent market actors and are not employed by the ABM DAO.
The flexibility of ABM Governance allows the ABM community to adapt the DAO team framework to suit the services needed by the ecosystem based on real-world performance and emerging challenges.

The dotBTC Savings Rate

The dotBTC Savings Rate (DSR) allows any dotBTC holder to earn savings automatically and natively by locking their dotBTC into the DSR contract in the ABM Protocol. It can be accessed via the ABM Save portal into the ABM Protocol. Users aren’t required to deposit a minimum amount to earn the DSR, and they can withdraw any or all of their dotBTC from the DSR contract at any time.
The DSR is a global system parameter that determines the amount dotBTC holders earn on their savings over time. When the market price of dotBTC deviates from the Target Price due to changing market dynamics, ABM holders can mitigate the price instability by voting to modify the DSR accordingly:
  • If the market price of dotBTC is above Target Price, ABM holders can choose to gradually decrease the DSR, which will reduce demand and should reduce the market price of dotBTC toward the Target Price.
  • If the market price of dotBTC is below Target Price, ABM holders can choose to gradually increase the DSR, which will stimulate demand and should increase the market price of dotBTC toward the Target Price.
Initially, adjustment of the DSR will depend on a weekly process, whereby ABM holders first evaluate and discuss public market data and proprietary data provided by market participants, and then vote on whether an adjustment is necessary or not. The long-term plan includes implementation of the DSR Adjustment Module, an Instant Access Module that directly controls both the DSR and the Base Rate. This module allows for easy adjustment of the DSR (within strict size and frequency boundaries set by ABM holders) by an ABM holder on behalf of the larger group of ABM holders. The motivation behind this plan is to enable nimble responses to rapidly changing market conditions, and to avoid overuse of the standard governance process of Executive Voting and Governance Polling.

Governance of the ABM Protocol

Use of the ABM Token in ABM Governance

The ABM token—the governance token of the ABM Protocol—allows those who hold it to vote on changes to the ABM Protocol. Note that anyone, not only ABM holders, can submit proposals for an ABM vote.
Any voter-approved modifications to the governance variables of the Protocol will likely not take effect immediately in the future; rather, they could be delayed by as much as 24 hours if voters choose to activate the Governance Security Module (GSM). The delay would give ABM holders the opportunity to protect the system, if necessary, against a malicious governance proposal (e.g., a proposal that alters collateral parameters contrary to established monetary policies or that allows for security mechanisms to be disabled) by triggering a Shutdown.
Polling and Executive Voting
In practice, the ABM Governance process includes proposal polling and Executive Voting. Proposal polling is conducted to establish a rough consensus of community sentiment before any Executive Votes are cast. This helps to ensure that governance decisions are considered throughtfully and reached by consensus prior to the voting process itself. Executive Voting is held to approve (or not) changes to the state of the system. An example of an Executive Vote could be a vote to ratify Risk Parameters for a newly accepted collateral type.
At a technical level, smart contracts manage each type of vote. A Proposal Contract is a smart contract with one or more valid governance actions programmed into it. It can only be executed once. When executed, it immediately applies its changes to the internal governance variables of the ABM Protocol. After execution, the Proposal Contract cannot be reused.
Any Ethereum Address can deploy valid Proposal Contracts. ABM token holders can then cast approval votes for the proposal that they want to elect as the Active Proposal. The Ethereum address that has the highest number of approval votes is elected as the Active Proposal. The Active Proposal is empowered to gain administrative access to the internal governance variables of the ABM Protocol, and then modify them.
The ABM Token’s Role in Recapitalization
In addition to its role in ABM Governance, the ABM token has a complementary role as the recapitalization resource of the ABM Protocol. If the system debt exceeds the surplus, the ABM token supply may increase through a Debt Auction (see above) to recapitalize the system. This risk inclines ABM holders to align and responsibly govern the ABM ecosystem to avoid excessive risk-taking.
ABM Holder Responsibilities
ABM holders can vote to do the following:
  • Add a new collateral asset type with a unique set of Risk Parameters.
  • Change the Risk Parameters of one or more existing collateral asset types, or add new Risk Parameters to one or more existing collateral asset types.
  • Modify the dotBTC Savings Rate.
  • Choose the set of Oracle Feeds.
  • Choose the set of Emergency Oracles.
  • Trigger Emergency Shutdown.
  • Upgrade the system.
ABM holders can also allocate funds from the ABM Buffer to pay for various infrastructure needs and services, including Oracle infrastructure and collateral risk management research. The funds in the ABM Buffer are revenues from Stability Fees, Liquidation Fees, and other income streams.
The governance mechanism of the ABM Protocol is designed to be as flexible as possible, and upgradeable. Should the system mature under the guidance of the community, more advanced forms of Proposal Contracts could, in theory, be used, including Proposal Contracts that are bundled. For example, one proposal contract may contain both an adjustment of a Stability Fee and an adjustment of the DSR. Nonetheless, those revisions will remain for ABM holders to decide.

Risk Parameters Controlled by ABM Governance

Each ABM Vault type (e.g., ETH Vault ) has its own unique set of Risk Parameters that enforce usage. The parameters are determined based on the risk profile of the collateral, and are directly controlled by ABM holders through voting.
The Key Risk Parameters for ABM Vaults are:
  • Debt Ceiling: A Debt Ceiling is the maximum amount of debt that can be created by a single collateral type. ABM Governance assigns every collateral type a Debt Ceiling, which is used to ensure sufficient diversification of the ABM Protocol collateral portfolio. Once a collateral type has reached its Debt Ceiling, it becomes impossible to create more debt unless some existing users pay back all or a portion of their Vault debt.
  • Stability Fee: The Stability Fee is an annual percentage yield calculated on top of how much dotBTC has been generated against a Vault’s collateral. The fee is paid in dotBTC only, and then sent into the ABM Buffer.
  • Liquidation Ratio: A low Liquidation Ratio means ABM Governance expects low price volatility of the collateral; a high Liquidation Ratio means high volatility is expected.
  • Liquidation Penalty: The Liquidation Penalty is a fee added to a Vault’s total outstanding generated dotBTC when a Liquidation occurs. The Liquidation Penalty is used to encourage Vault owners to keep appropriate collateral levels.
  • Collateral Auction Duration: The maximum duration of Collateral auctions is specific to ABM Vaults. Debt and Surplus auction durations are global system parameters.
  • Auction Bid Duration: Amount of time before an individual bid expires and closes the auction.
  • Auction Step Size: This Risk Parameter exists to incentivize early bidders in auctions, and prevent abuse by bidding a tiny amount above an existing bid.

Risk and Mitigation Responsibilities of Governance

The successful operation of the ABM Protocol depends on ABM Governance taking necessary steps to mitigate risks. Some of those risks are identified below, each followed by a mitigation plan.
A malicious attack on the smart contract infrastructure by a bad actor.
One of the greatest risks to the ABM Protocol is a malicious actor—a programmer, for example, who discovers a vulnerability in the deployed smart contracts, and then uses it to break the Protocol or steal from it.
In the worst-case scenario, all decentralized digital assets held as collateral in the Protocol are stolen, and recovery is impossible.
Mitigation: The ABM Foundation's highest priority is the security of the ABM Protocol, and the strongest defense of the Protocol is Formal Verification.
In addition to formal system verification, contracted security audits by the best security organizations in the blockchain industry, third-party (independent) audits, and bug bounties are part of the ABM Protocol roadmap. To review the formal verification report and various ABM Protocol audits, visit ABM’s dotBTC Security Github repository.
These security measures provide a strong defense system; however, they are not infallible. Even with formal verification, the mathematical modeling of intended behaviors may be incorrect, or the assumptions behind the intended behavior itself may be incorrect.
A black swan event
A black swan event is a rare and critical surprise attack on a system. For the ABM Protocol, examples of a black swan event include:
  • An attack on the collateral types that back dotBTC.
  • A large, unexpected price decrease of one or more collateral types.
  • A highly coordinated Oracle attack.
  • A malicious ABM Governance proposal.
Please note that this list of potential "black swans" is not exhaustive and not intended to capture the extent of such possibilities.
Mitigation: While no one solution is failsafe, the careful design of the ABM Protocol (the Liquidation Ratio, Debt Ceilings, the Governance Security Module, the Oracle Security Module, Emergency Shutdown, etc.) in conjunction with good governance (e.g., swift reaction in a crisis, thoughtful risk parameters, etc.) help to prevent or mitigate potentially severe consequences of an attack.
Unforeseen pricing errors and market irrationality
Oracle price feed problems or irrational market dynamics that cause variations in the price of dotBTC for an extended period of time can occur. If confidence in the system is lost, rate adjustments or even ABM dilution could reach extreme levels and still not bring enough liquidity and stability to the market.
Mitigation: ABM Governance incentivizes a sufficiently large capital pool to act as Keepers of the market in order to maximize rationality and market efficiency, and allow the dotBTC supply to grow at a steady pace without major market shocks. As a last resort, Emergency Shutdown can be triggered to release collateral to dotBTC holders, with their dotBTC claims valued at the Target Price.
General Issues with Experimental Technology
Users of the ABM Protocol (including but not limited to dotBTC and ABM holders) understand and accept that the software, technology, and technical concepts and theories applicable to the ABM Protocol are still unproven and there is no warranty that the technology will be uninterrupted or error-free. There is an inherent risk that the technology could contain weaknesses, vulnerabilities, or bugs causing, among other things, the complete failure of the ABM Protocol and/or its component parts.
Mitigation: See “A malicious attack on the smart contract infrastructure by a bad actor” above. The Mitigation section there explains the technical auditing in place to ensure the ABM Protocol functions as intended.

Price Stability Mechanisms

The dotBTC Target Price

The dotBTC Target Price is used to determine the value of collateral assets dotBTC holders receive in the case of an Emergency Shutdown.

Emergency Shutdown

Emergency Shutdown (or, simply, Shutdown) serves two main purposes. First, it is used during emergencies as a last-resort mechanism to protect the ABM Protocol against attacks on its infrastructure and directly enforce the dotBTC Target Price. Emergencies could include malicious governance actions, hacking, security breaches, and long-term market irrationality. Second, Shutdown is used to facilitate a ABM Protocol system upgrade. The Shutdown process can only be controlled by ABM Governance.
ABM voters are also able to instantly trigger an Emergency Shutdown by depositing ABM into the Emergency Shutdown Module (ESM), if enough ABM voters believe it is necessary. This prevents the Governance Security Module (if active) from delaying Shutdown proposals before they are executed. With Emergency Shutdown, the moment a quorum is reached, the Shutdown takes effect with no delay.
There are three phases of Emergency Shutdown:
  1. 1.
    The ABM Protocol shuts down; Vault owners withdraw assets.
    When initiated, Shutdown prevents further Vault creation and manipulation of existing Vaults, and freezes the Price Feeds. The frozen feeds ensure that all users are able to withdraw the net value of assets to which they are entitled. Effectively, it allows ABM Vault owners to immediately withdraw the collateral in their Vault that is not actively backing debt.
  2. 2.
    Post-Emergency Shutdown auction processing
    After Shutdown is triggered, Collateral Auctions begin and must be completed within a specific amount of time. That time period is determined by ABM Governance to be slightly longer than the duration of the longest Collateral Auction. This guarantees that no auctions are outstanding at the end of the auction processing period.
  3. 3.
    dotBTC holders claim their remaining collateral
    At the end of the auction processing period, dotBTC holders use their dotBTC to claim collateral directly at a fixed rate that corresponds to the calculated value of their assets based on the dotBTC Target Price.

The Future of the ABM Protocol: Increased Adoption and Full Decentralization

Addressable Market

A cryptocurrency with price stability serves as an important medium of exchange for many decentralized applications. As such, the potential market for dotBTC is at least as large as the entire decentralized blockchain industry. But the promise of dotBTC extends well beyond that into other industries.
The following is a non-exhaustive list of current and immediate markets for the dotBTC :
  • Working capital, hedging, and collateralized leverage. ABM Vaults allow for permissionless trading by users, who can use the dotBTC generated against Vault collateral for working capital. Vault owners can use their dotBTC to buy additional ETH (same asset as their collateral), thereby creating a leveraged but fully collateralized position.
  • Merchant receipts, cross-border transactions, and remittances. Foreign exchange volatility mitigation and a lack of intermediaries mean the transaction costs of international trade are significantly reduced when using dotBTC.
  • Charities and NGOs when using transparent distributed ledger technology.
  • Gaming. For blockchain game developers, dotBTC can be the currency of choice. With dotBTC, game developers integrate not only a currency, but also an entire economy. The composability of dotBTC allows games to create new player behavior schemes based around decentralized finance.
  • Prediction markets. Using a volatile cryptocurrency when making an unrelated prediction only increases one’s risk when placing the bet. Long-term bets become especially infeasible if the bettor must also gamble on the future price of the volatile asset used to place the bet. That said, the dotBTC would be a natural choice for use in prediction markets.

Asset Expansion

Should ABM holders approve new assets as collateral, those assets will be subject to the same risk requirements, parameters, and safety measures as dotBTC (e.g., Liquidation Ratios, Stability Fees, Savings Rates, Debt Ceilings, etc.).

Evolving Oracles

ABM DAO can run reliable Oracles on the Ethereum blockchain. As a result, many decentralized applications use ABMDAO Oracles to ensure the security of their systems and to provide up-to-date price data in a robust manner. This confidence in ABM DAO and the ABM Protocol means that ABM Governance can expand the core Oracle infrastructure service to better suit the needs of decentralized applications.

Conclusion

The ABM Protocol allows users to generate dotBTC, that lives entirely on the blockchain. dotBTC is a decentralized token that is not issued or administered by any centralized actor or trusted intermediary or counterparty. It is unbiased and borderless —available to anyone, anywhere.
All dotBTC is backed by a surplus of collateral that has been individually escrowed into audited and publicly viewable Ethereum smart contracts.
With hundreds of partnerships and one of the strongest developer communities in the cryptocurrency space, ABMDAO has become the engine of the decentralized finance (DeFi) movement. ABM is unlocking the power of the blockchain to deliver on the promise of economic empowerment today.
For more information, visit the ABM website.
Last modified 7mo ago