Source One Market - SRC1, USX, PRSX
An interoperable, multi-chain DeFi marketplace for lending, borrowing and staking digital assets
Outside of a small portion of stablecoins and market protocols such as UST, DAI and USDC, the top 200 coins by market cap do not have their own liquidity backing and are rooted in easily manipulated and speculative psychological valuations. For that reason, these protocols and applications are completely reliant upon daily transaction volume, the support of centralized exchanges and market participation, leaving them vulnerable to market instability, skepticism, slower adoption, volatile price fluctuations, and more.
With this in mind, the Source team has architected a robust marketplace that functions in concert with Source Token SRCX and prioritizes solvency, ease of use and automation. The concepts and functions have been in development since 2017, and will allow the ecosystem to absorb future institutional financial markets sustainably. This will set Source Protocol’s SRCX, Money Market and IBC-capable Source Chain beyond the crippling speculative valuation of legacy digital assets. While speculation has its place in creating market volatility, a truly solvent protocol will continue to drive growth and valuation that is no longer purely speculative alone. The solvency of Source One Market will ignite a path toward mass adoption of DeFi and the freedoms and benefits it can provide to the world.
Source One Market (otherwise known as Source One) is a multi-chain, interoperable and decentralized peer-to-peer financial services protocol and application suite for lending, borrowing and staking crypto assets, and eventually other assets like NFTs, virtual real estate, synthetic stocks, etc. Built on Binance Smart Chain (BSC) and Cosmos HUB, Source One is being developed to be capable of supporting a variety of traditionally-siloed blockchains and audited crypto assets. Equipped with automated proprietary protocols designed to achieve solvency and self-sustainability, Source One will be a safe and secure environment for retail and institutional users alike. This will lay groundwork for Source One to quickly become the largest liquidity hub in DeFi.
Source One currently supports blue chip crypto assets such as Bitcoin, Ethereum, XRP, Cardano, BNB, and various stable coins like USDC, DAI, TUSD, BUSD, USDT, and as mentioned above, has plans to support a variety of assets from several chains in the future. The total supplied market asset value is what determines the market's TVL (Total Value Locked). The TVL is what supports the backing of Source’s native and decentralized stablecoin, Source USX (USX).
Market participants can lend and borrow against their collateralized digital assets and earn APY, or mint USX by-the-block within the marketplace. When assets are lent to the APY smart contract position, there is no time term or lockup period. The contract remains in interest gaining APY position as long as the user deems to acquire APY for their lent assets. Each digital asset has a specific collateralization ratio based on risk and volatility, which typically ranges up to 80%. Value can be collateralized against by any user's smart contract asset position at an interest rate with no term requirements. If and when the amount borrowed extends beyond the specific collateralization ratio, the loan will begin to accrue higher interest and can be liquidated by the liquidation engine. Source One allows access to instant on-demand liquidity, and allows the users to always retain custody of their funds.
Source One Market utilizes a native governance and reward token that goes by the same name, Source One SRC1, a stable coin Source USX USX, and in the future, a merchant processing token PROCXSS PRSX, to support the its various service offerings and functionality.
Source Marketplace UI Teaser
One of the mechanisms that makes Source One unique in comparison to other DeFi money market protocols is the integration of the smart contract token SRCX. The DCLP function of SRCX integrates directly into Source One, where it provides value-backing and liquidity via automated, optimized positioning in blue chip stablecoins and crypto assets. This function is an essential process that promotes and builds a self-sustaining and solvent network in SRCX, as well as supplies valuable additional liquidity backing to Source One Market.
Source One (SRC1) is Source One's native governance token and can be used to vote on community proposals, adding new cryptos or stablecoins to the market, feature requests, roadmap items, etc. SRC1 tokens are mined out and rewarded to Source One Market Suppliers and Borrowers. *When collateralizing digital assets in lending positions, users can also opt to earn increased APY in SRC1. This allows for fair distribution of SRC1 and organic, decentralized governance over the protocol.
USX is Source Protocol’s Native Stablecoin. It is backed by a basket of crypto assets that are supplied by SRCX’s DCLP function and also by the assets supplied by Source Marketplace users. With our unique asset-backing mechanisms, USX will be a trusted and solvent stablecoin and hedge, not just for Source Marketplace, but the crypto ecosystem at large. USX is burned and minted to stabilize its valuation to the Total Value Locked (TVL) within Source One.
PRSX is a utility token linked to Source One that will be developed as an integrative solution for merchant processing and credit card payments. We plan on implementing a mobile dApp that allows fiat onboarding capabilities, as well as P2P payments within fiat and crypto. Procxss will enable crypto and non-crypto users to utilize blockchain transaction capabilities in and out of Source Marketplace and various protocols.
SRC1 tokens are used for controlling governance over the Source One Market protocol. Holders of SRC1 tokens can vote on proposals that make changes to variables and parameters that control how the Marketplace functions, add new S Tokens to the marketplace, delegate protocol reserve distribution schedules, and adjust variable and fixed interest rates for assets and stablecoins. They are open to vote on for a period of 3 days after which they either pass or fail. If a proposal is passed successfully, the development team begins implementing the changes into the protocol which takes approximately 1 to 2 weeks. SRC1 tokens can also be delegated to active governance participants to vote on their behalf. A user must hold at least 300,000 SRC1 in order to submit a governance proposal.
The Source One Market uses "sTokens" to represent a user's supplied collateral of a Binance Smart Chain asset. These tokens are smart contracts that act as a receipt of collateral that the user receives after executing a "supply" contract. They can be redeemed at a 1:1 value of their underlying asset in the marketplace protocol at any time by the user. These tokens are only redeemable in the underlying asset they represent. Therefore, sBNB can only be used to redeem BNB, sETH can only be used to redeem ETH, sADA can only be used to redeem ADA, etc.
For example, Bob supplies 1.5 BNB (smart chain network) to the marketplace protocol by approving and executing the BNB "supply" contract function with his Binance smart chain wallet. In return he will receive 1.5 sBNB that can be used at any time to redeem the original 1.5 BNB. When Bob is ready to claim his original BNB he can approve and execute the "withdraw" contract function. Once the withdraw contract is executed, Bob's 1.5 BNB is returned to him in exchange for his 1.5 sBNB that is simultaneously returned to the market and burned.
Source One Market suppliers are incentivized to supply their Binance Smart Chain digital assets to the protocol so they can earn APY. Suppliers receive sTokens as mentioned above in exchange for positioning their assets as collateral into the protocol. The value of collateral supplied is used to determine how much value the participant can then borrow. Supplied digital assets also earn APY at variable rates that are determined by market utilization.
Once a market participant has supplied digital assets as collateral, he/she will have the ability to borrow against that collateral. Collateralization ratios typically range up to 80% and are particular to each digital asset. The average collateralization ratio is 60%. So if Alice supplies $100,000 of digital assets to the marketplace protocol, she will typically be able to borrow up to $60,000 at an interest rate that is set by the protocol based on market utilization.
If a participant's borrow limit exceeds their collateralization ratio due to market volatility of their underlying assets, they are at risk of liquidation. For example, if Alice borrows 100% of her borrow limit of $60,000 and then her supplied collateral value drops to $95,000, a liquidation event will occur and use her supplied collateral to bring her collateral ratio back to 60%. Alice will also only be able to withdraw her supplied collateral when her loan is paid back.
Source One Market uses compounding interest rates to incentivize supplying and borrowing on the protocol. The interest rates are variable based on an asset's market utilization. When a supplied asset is under-utilized, its interest rate will increase to incentivize suppliers to earn a higher APY. When a supplied asset is over-utilized, the APY for supplying will be reduced. In contrast, when a borrowed asset is under-utilized, its interest rate will decrease to incentivize borrowers to borrow at lower rates. When a borrowed asset is over-utilized, its interest rate will increase as a way to incentivize borrowers to pay off their loans.