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A web3 application native to the SOURCE blockchain network for peer-to-peer 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 peer-to-peer web3.0 application that prioritizes solvency, ease of use, and automation. The concepts and functions have been in development since 2017 and the application will serve as the foundation for white label blockchain solutions. This will set SOURCE 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 Market in conjunction with enterprise-grade white labelled applications will ignite a path toward mass adoption.
Source Market is an interoperable and decentralized peer-to-peer application for lending, borrowing and staking crypto assets, and eventually other assets like NFTs, virtual real estate, synthetic stocks, etc. Built on the SOURCE network, Source Market 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 Market will be a safe and secure environment for retail and institutional users, but more importantly, it will provide the foundation for white-labeled blockchain solutions that will be seamlessly integrated into enterprise-grade applications.
Source Market will support 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 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 Market allows access to instant on-demand liquidity and allows users to always retain custody of their funds.
Source Market utilizes the SOURCE native governance and reward token, a stable-coin named SourceUSX (USX), and in the future, a merchant processing token named PROCXSS (PRSX), to support its various service offerings and functionality.
Source Marketplace UI Teaser
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.
SOURCE native tokens are used for controlling governance over the Source Market. Holders of SOURCE tokens can vote on proposals that make changes to variables and parameters that control how the Market application functions, add new S Tokens to the application, 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. SOURCE tokens can also be delegated to active governance participants to vote on their behalf.
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 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.