Dynamic Supply Undergoes a Metamorphosis to Morph.Finance

Our mission is to balance inflationary growth with real value production from DeFi services

Receive a 1:1 migration to the new Morph Coin and Morph Tracker

Dynamic Supply is an algo based stablecoin, inspired by Basis protocol, which launched less than two weeks ago. Since then, we’ve added some features such as a new website, and a coin zapper that allows users of other projects to join Dynamic Supply. However, we’ve noticed many critical problems with Basis’ tokenomics, which makes it an unsustainable algo stable coin, as pointed out by Andre Cronje in this tweet.

We originally intended to solve the algo stablecoin issues by introducing new mechanics to help arbitrage away lop-sided sell pressure. For example, you could burn DSTR into DST when DST is above $1, and DST into DSTR when DST falls under $1. Unfortunately, DST dropped below $1 before we could introduce our Burner mechanic, and before any DSTR was burned first. Since DSTR is capped supply, the Burner is no longer able to be introduced.

Furthermore, Dynamic Supply has emission rates that are quite accelerated that added to the downward pressure, especially as the Reoptimizer stopped producing inflationary rewards, compounding the issue by removing DSTR staking incentives. Regrettably, the original team burned the keys that allowed us to make emission rate adjustments into a more sustainable model. Because of the way Dynamic Supply tokens and the ecosystem contacts are setup, it is near impossible to reconfigure the tokenomics of Dynamic Supply, without breaking the system. Thus we need to make a full migration into something new and better — Morph Finance.

Morph into Better Tokenomics

  1. Notes (bonds) are now removed
  2. DST replaced with MORC (Morph Coin) and DSTR replaced with MORT (Morph Tracker)
  3. Epoch length is now 8 hours; inflation rate of 1.1x remains the same and requires 2 epoch minimum lock to claim rewards
  4. Selling MORC when it is <1 DAI in value introduces a scaling burn tax, at a percentage rate of 1 minus [MORC price].
  5. 75% of the taxed amount of MORC is burned, and 25% of the MORC goes into the Reoptimizer.
  6. DST and DSN will receive 1:1 conversion to MORC, and DSTR will receive 1:1 conversion to MORT for the first 100k DSTR only.

To recap, MORC aims to peg its price to 1 DAI via an incentivized elastic coin model. When the price of MORC is over 1 DAI, new MORC tokens are minted as expansionary growth, and will then be sent to the Reoptimizer, where stakers of MORT will earn a share this MORC. When the price of MORC is less than 1 DAI, a tax is placed on every sell to Uniswap, where 75% of that tax is burnt and 25% is sent to the Reoptimizer, so that stakers of MORT will continue earning rewards even when the price of MORC is less than 1 DAI and inflation stops.

The further away MORC is below 1 DAI, the higher the tax will be. For example, if the price of MORC is 0.95 DAI, 3.75% of the sold amount will be burnt, and another 1.25% of the amount will be sent to the Reoptimizer, totaling to 5%. If the price of MORC is 0.75 DAI, the total tax (amount to burn plus the Reoptimizer share) will be 25%. This in turn places upwards pressure back on MORC.

Value Backed Stabilization

Dynamic Supply Migration

Dynamic Supply Reoptimizer will no longer issue rewards, and any new DSTR tokens minted beyond the 100k conversion limit will no longer be convertible.

New Twitter (https://twitter.com/morphcoin)
New Telegram (https://t.me/morphfinance) — this will be eventually renamed from the dynamic.supply TG, you do not need to switch to the placeholder one

You can begin the migration process now by navigating to morph.finance/migrate, to convert your DST, DSTR, or DSN to MORC and MORT. MORC and MORT will not be transferable or tradable until Saturday, January 16, 8pm ET/5pm PT (Jan 17th 1am GMT).

DISCLAIMER: Morph Finance, formerly Dynamic Supply, is an experimental DeFi ecosystem in an unregulated cryptocurrency space. Participation in the ecosystem does not constitute an investment and you risk any funds that you participate within the system.

Morph Coin (morph.finance) is an experimental algorithmic stablecoin that balances inflationary growth and Defi product value.

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