# Mercurial Protocol Mercurial is building new liquidity systems to maximise the utility and yield of stable assets on Solana. As the DeFi ecosystem on Solana grows, there will be many different variants of collateralized, wrapped, and synthetic assets in the space. Our most immediate objective is to provide the best liquidity for all the major stable and pegged assets on Solana, which we started with our Mainnet beta. Our focus will be on stable coins because they represent a major part of the DeFi demand across synthetic assets creation, swapping, and lending. Robust availability of stablecoin liquidity is crucial to any DeFi ecosystem. Moving forward, we are focused on building **dynamic vaults**, which are market making vaults providing low slippage swaps for stables, while also improving LP profits with dynamic fees and flexible capital allocation. You can read about dynamic vaults [here](https://mercurial.finance/Mercurial-Lite-Paper-v1.pdf). **Community:**\ Discord - \ Twitter - **Litepaper:**\ **About $MER:**\ Where to buy $MER * [FTX](https://ftx.com/trade/MER/USD) * [Raydium](https://raydium.io/swap/) * [Gate.io](https://www.gate.io/) * [Hotbit](https://www.hotbit.io/exchange?symbol=MER_USDT) Where to Stake $MER * [Acumen Finance](https://app.acumen.network/#/deposit/MER) * [Port Finance](https://mainnet.port.finance/#/supply) Check out our Token distribution [here](https://app.gitbook.com/@mercurialfi/s/mercurial/v/master/usdmer) **Media Coverage** * [Podcast with Arcane Bear](https://youtu.be/VsZ3bbOi9QY) * [Podcast with Serum](https://t.co/MjvqRAd3LA?amp=1) * [Podcast with Journal Du Coin](https://youtu.be/2tSIeq08tmY) * [Review by @danku\_r](https://t.co/YYNHREYps6?amp=1) * [Tutorial - how to earn yield on @MercurialFi](https://youtu.be/fqaQQsSHjxw) * [Podcast with Terra Bite](https://t.co/BGRWDtYHz4?amp=1) * [CoinGecko Meetup](https://www.crowdcast.io/e/coingecko-meetup-14/register?0=\&utm_source=twitter\&utm_campaign=meetup-14\&utm_medium=social) **Latest News** * 21st August: Announcing the extension of $MER and $PRT rewards for our PAI 3Pool: * 18th August: Announcing Mercurial’s strategic partnership with Serum with the launch of Solana’s first on-chain cross-protocol aggregator: * 16th August: Port Finance now accept $MER as collateral: * 14th August: Announcing Mercurial community grant programs with @tiddernips as our first community writer. * 14th August: Acumen now accept $MER as collateral! **Education Campaigns** * [Quiz - What is UST?](https://learning.mercurial.finance/ust) * [Quiz - What is PAI?](https://learning.mercurial.finance/pai) * [Quiz - What is Port Finance?](https://learning.mercurial.finance/port) # Overview Mercurial is building **dynamic vaults**, which are market making vaults providing low slippage swaps for stables, while also improving LP profits with dynamic fees and flexible capital allocation. You can read about dynamic vaults [here](https://mercurial.finance/Mercurial-Lite-Paper-v1.pdf) Dynamic vaults will have the following key features: * Low slippage swaps for stable pairs and forex pairs * Dynamic fees that leverage market conditions to improve LP profits * Flexible allocation to external platforms like lending protocols to earn additional interest and yield By fully leveraging the power of Solana, Mercurial aims to build the next generation of market-making systems. We introduce two major innovations to the usual AMM model - dynamic vaults and dynamic fees. * Dynamic Vaults: Instead of having pooled assets to sit idle in liquidity pools, we will eventually enable the deployment of pooled assets to yield generating opportunities across the Solana ecosystem. No longer will LPs have to choose between earning fees or yields from other farms — with Mercurial, both can be done at the same time. * Dynamic fees improves profit potential of LPs while also compensating them for the IL risk in volatile environments. This protects LPs which encourages more participation from them, this leads to lower slippage and therefore increased trading volume which in turn results in more fees in aggregate for the system. # Design We are building dynamic vaults that aim to improve the profit potential of swaps and deposited capital. Each vault will have several key components. The vault itself, which acts as the automated market maker for swaps, the yield programs which run the strategy for the vault, as well as the dynamic fee and DAO programs, which will coordinate between all the various vaults. The key design principles of vaults include: 1. **Composability:** Ability to collaborate with other projects for benefits to user 2. **Liquidity:** Providing a high level of liquidity accessible for both swaps and deployment 3. **Secure:** Keeping capital secure, while catering to various risk profiles ![Key Aspects In A Mercurial Vault ](https://lh5.googleusercontent.com/NF5MzMoVo2TSMBMZzkc8VZZQCAwhsgdlNhcRCd9MpO7pcyk6wuFUrpsjbTyi80UT0n6gy-0u52pQRZY1xCzg-TPiHnKGAGQQDZ1tvZ-muTnSZ213Z6Fkin41sAeiOJAeJHjYlCUt) ### **1. Vault Program: AMMs Optimized For Stable Token Sets** Each Mercurial market making vaults implements a highly efficient, multi-token market maker with dynamic fees optimized for pegged assets, but generalizable for any token pair. Mercurial provides up to 100X better slippage for pegged assets swaps compared with traditional AMMs. ![](https://3176096322-files.gitbook.io/~/files/v0/b/gitbook-legacy-files/o/assets%2F-Mbz-hYsyHW7xPmePIji%2F-McOPh4mqfk3wZXw7FM9%2F-McOQKFEaVqWbqkyCdto%2FScreenshot%202021-06-17%20at%206.03.36%20PM.png?alt=media\&token=084986cf-e401-44a2-8c47-537d1ce6fef1) We are also implementing new pricing models that are generalized for non 1:1 token sets, including x:y pegs, as well as for assets that move within a given range, like forex sets. #### Stable Assets Not Pegged To Each Other In this category, while the different assets in the vault are stables in their own right, and their exchange rates can fluctuate around a narrow range for example USD/EUR etc. We will in turn utilize an amplified price curve to concentrate liquidity in the desired range. Users who trade when the exchange rate is out of range will get less supported liquidity. Assuming that we want to support two coins x1,x2, whose exchange rate fluctuates in the range p1, p2, so constant-products in each case are: $$ (x1+dp2)(x2+dp1)=d2 $$ $$ x1x2=d2 $$ By adding an amplification coefficient a, we form a formula for Stable swap in this case as: $$ a(x1+dp2)(x2+dp1)+d=ad2+dx1x2 $$ In which a is amplification coefficient and d represents for liquidity * If a is “close” to infinity, all liquidity are concentrated in the price range p1- p2 * If a is “close” to 0, the formula becomes constant-product. Hence the supported price range is \[0-infinity] ### 2. Dynamic Fee Program All the vaults in Mercurial share the same dynamic fees program. The program will store the market volume, and volatility data, and update the LP fees accordingly. The core algo of the fee programs runs with these goals: * High market volatility: Higher LP fees, reducing IL and capturing higher profits * Low market volatility: Lower LP fees to encourage trading For our first implementations, we will use 2 volume measurements in a long window and short window to determine the fee. We use Exponential Moving Average (EMA) because it is quicker to react to volume changes than SMA (Simple Moving Average), and also easier to program than other more complex options. ![i) Exponential Moving Average (EMA) Representation Of The Volume (V)](https://lh6.googleusercontent.com/hUePf8ZEy_HiAlWx_echK0Mh3rigOnSEK28huGEXS3ySUtql_CyRRmam8h8HV-aCJuRAQQOR-r4gq0NcrW0pbDdixBz_dE8euSFVpWRo3chpiCNlYNg9aDhtXo24Xn5xu4ERhhmb) ![ii) Ratio (r) of the EMA in the short time window and the long time window](https://lh6.googleusercontent.com/U9Ux1G9G1JrxMr6evbmRmO34kBdpE5hTwZvlmBj6XIsniQG4v4MAWcDgUAH0SR6o-OlmXwGu6mn7vCqj9amHiubKJV4_cJAASgmPN9URCU2U1L0buTI6XMHBOM4P_azPxD9Wv0dK) ![iii) Fee (v) updates based on volume ratio (r)](https://lh4.googleusercontent.com/OxCiWiMOQV7R56AGPdUwvk8itaQg7n8zPOxLSovNii-jMatcYIYdc1P6eENjxHAk_PDN3QzG4A0d-Rllwq7qlXxakamO3BlvFrnCv6W5pASXs4VvET-kgUue1slYCYvjAH6PujXl) In which: * Vo, V1, … , Vn are on-chain volumes of the a pair, which are recorded in a predetermined epoch * represents the degree of weighting decrease * v is base fee variant , so our dynamically fee can be calculated as the formula feedynamic = feebase + v * 30\*z represents for max variant * r0 is cut-off ratio * g, f, l, a, b, c are constants, which are chosen the make the curve of v ![iv) Representation of how the fees will update based on changes in market volatility ](https://lh4.googleusercontent.com/L6jfUaBQSZLLLYTh-bgDVHnykCRecm5HfTzakNewrDqKM1PHk5MOeXJc6X8nX71-HDhewxm1l8QE4ycLFRxj-KlGovTWFSTUKeTisJR68oo6qBvqKRREtofHNXW6-wjYnl_GOzfq) By implementing as a standalone program, the fee program can be upgradable to cater for data points as we learn about the effectiveness, without having to update the core vaults in any way. ### **3. Yield Programs** ![Yield programs will run on-chain algorithms executed by off-chain bots](https://lh4.googleusercontent.com/B_5X8xbsV7ShvTYP-OjqDVR8dvFYRuyPTpYu9c3Zlp5lpf_hmGz6gNxo2nZ7NjLmcsU43aRejwx_r6C9xKj5FO14_1CUHHV0qSUbIAP93dGF9rXwB5z7eng2GH_UWg6k9V8Bz62v) Yield programs will be used to manage the dynamic allocation of assets from each vault to external platforms via on-chain algorithms. This management also includes interest and yield collection, exiting certain platforms, liquidation of earned assets. These yield programs will need to be approved by the DAO before they can deploy capital in the vault to external platforms. The % of deployable assets will also be determined by the DAO for each vault. Deployment to external platforms includes flash loans, collateral for lending platforms, leveraged stable lending or even external vaults. Platforms will be selected based on the returns, risk profiles, and ease of retrieving liquidity. Yield programs make the market making pools highly extensible - new programs can be added to existing vaults to improve the earnings of the base capital. This is one of the most exciting aspects. Deployment of yield programs will depend largely on the evolution of the space in general, as well as some of the key technical ecosystem developments, including which programs are available to be leveraged. ### 4. DAO Program The DAO will decide key decisions and parameters for the vaults. These include: * Base fees and commissions: From the swap and vault operations * Usage of the fees: Whether the fees will be burnt or distributed * Deployment destinations: Where capital can be deployed to * Approve yield programs: Approve the yield programs that can access vault capital * Max loan to liquidity ratio: The maximum amount of capital that can be externally deployed per vault
# $MER ## Token Distribution 1 Billion MER tokens will be minted and distributed over the next few years. | | | | | --- | -------------------------- | -------------------------------------------------------------- | | 20% | Seed | 3 year linear, with a 1 year lock up | | 5% | Private Sale | 10% at token listing event, Linear for 2 years after one month | | 5% | IEO + Liquidity Provisions | 1% to IEO on different platforms, 4% for liquidity provision | | 30% | Liquidity Incentives | 40% first year. Halving each year after. | | 20% | Team and Advisors | 4 years linear, with a 1 year lock | | 20% | Ecosystem/Reserve | 20% a year for 5 years | # Investors We are excited to share that we have received investment and support from a range of the most active ecosystem players. | | | | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | |

  • Alameda Research
  • Sino Capital
  • Defi Alliance
  • Rok Capital
  • Genblock
  • Defiance
  • OKEx
  • Houbi
  • Solana Foundation
  • Solar Eco Fund
  • Bonfida Ventures Ltd
  • GBV Capital
  • imToken Ventures Ltd
  • Stacked

|
  • Raydium
  • Delphi Digital
  • Gecko Ventures Pte. Ltd
  • Parrot
  • Gate.io
  • Coin98
  • Kyros Ventures
  • Nansen
  • Unagii
  • Fantom
  • Petrock Capital Ltd
  • Incuba Alpha Labs LP
  • Signum Capital
  • Hyper Chain
| # Founding Team Mercurial is led by people with deep technical and operational experience | | | | ------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | | **Siong** | Founding engineer at Envoy (a16z funded, 500M valuation) and resident engineer at Expa. YC alum and UIUC CS graduate | | **Ming** | Strategic adviser to Instadapp, Blockfolio, Kyber Network. Founding team in WBTC, Handshake. | | **Pierre Arowana** | Solana hackathon OG, a very active member on Discord (Pikachoo), and a rock star at navigating the block explorer. | | **Andrew Nguyen** | Andrew was a Founding Engineer and Technical Manager at Kyber Network. He has deep expertise in automatic market making and DeFi strategies and is the author of DMM protocol. He was also the winner of the Maths Olympiad for University Students in Vietnam for 2010. | | **Ben Chow** | Founding team of Hive7, which he grew to tens of millions of gamers before exiting to Disney/Playdom. He also won a Red Dot Design award for an AR navigation system for cataract surgery. Cofounder of top 100 social app on the iOS AppStore. Prior to startups, he worked at IDEO and AKQA bringing innovative products to market for Fortune 100 clients. | | **Zhengyu Tay** | Zhengyu has experience developing in the Crypto space since 2018. Had prior working stints in FLOChip and Binance. | | **Izuddin Helmi** | Over 10 years of frontend engineering and product design experience. Previous jobs include Team design systems lead at Petronas Group Digital. | # Addresses ## Mainnet | Description | Address | | ---------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | | Mercurial Swap Program | [MERLuDFBMmsHnsBPZw2sDQZHvXFMwp8EdjudcU2HKky](https://solscan.io/account/MERLuDFBMmsHnsBPZw2sDQZHvXFMwp8EdjudcU2HKky) | | PAI 3-Pool Account (PAI-USDC-USDT) | [SWABtvDnJwWwAb9CbSA3nv7nTnrtYjrACAVtuP3gyBB](https://solscan.io/account/SWABtvDnJwWwAb9CbSA3nv7nTnrtYjrACAVtuP3gyBB) | | PAI 3-pool authority | [2dc3UgMuVkASzW4sABDjDB5PjFbPTncyECUnZL73bmQR](https://solscan.io/account/2dc3UgMuVkASzW4sABDjDB5PjFbPTncyECUnZL73bmQR) | | UST 3-Pool Account (UST-USDC-USDT) | [USD6kaowtDjwRkN5gAjw1PDMQvc9xRp8xW9GK8Z5HBA](https://solscan.io/account/USD6kaowtDjwRkN5gAjw1PDMQvc9xRp8xW9GK8Z5HBA) | | UST 3-pool authority | [FDonWCo5RJhx8rzSwtToUXiLEL7dAqLmUhnyH76F888D](https://solscan.io/account/FDonWCo5RJhx8rzSwtToUXiLEL7dAqLmUhnyH76F888D) | | Mercurial Aggregator Swap Program | [AGGkJgAxYz4zyEtMqZpL22Bt6UiBi6JdqwDkV4s413VK](https://solscan.io/account/AGGkJgAxYz4zyEtMqZpL22Bt6UiBi6JdqwDkV4s413VK) | | Mercurial Token Address | [MERt85fc5boKw3BW1eYdxonEuJNvXbiMbs6hvheau5K](https://solscan.io/token/MERt85fc5boKw3BW1eYdxonEuJNvXbiMbs6hvheau5K) | ## Token Addresses | Token | Address | | ----- | --------------------------------------------------------------------------------------------------------------------- | | USDC | [EPjFWdd5AufqSSqeM2qN1xzybapC8G4wEGGkZwyTDt1v](https://solscan.io/token/EPjFWdd5AufqSSqeM2qN1xzybapC8G4wEGGkZwyTDt1v) | | USDT | [Es9vMFrzaCERmJfrF4H2FYD4KCoNkY11McCe8BenwNYB](https://solscan.io/token/Es9vMFrzaCERmJfrF4H2FYD4KCoNkY11McCe8BenwNYB) | | UST | [CXLBjMMcwkc17GfJtBos6rQCo1ypeH6eDbB82Kby4MRm](https://solscan.io/token/CXLBjMMcwkc17GfJtBos6rQCo1ypeH6eDbB82Kby4MRm) | | PAI | [Ea5SjE2Y6yvCeW5dYTn7PYMuW5ikXkvbGdcmSnXeaLjS](https://solscan.io/token/Ea5SjE2Y6yvCeW5dYTn7PYMuW5ikXkvbGdcmSnXeaLjS) | # Community Grant Program The goal of this program is to recognize exceptional community members and make it easier for them to contribute to this community and make it one of the best educated communities on DeFi. * We will have official roles for anyone who has been accepted to the Grant program. If you are accepted into a role, you can earn grants for taking on projects. * Current official roles * Writer Merc * Writing projects * Influencer Merc * Video projects * Compensation for writing/video projects will be 1K MER per project. * Projects can be proposed by the community or the team, but, they are approved by the team before being assigned. * Project proposals can be submitted in the #education channel on Discord # Communities Discord - \ Twitter - # Social Media ### Podcasts * [Podcast with Arcane Bear](https://youtu.be/VsZ3bbOi9QY) * [Podcast with Serum](https://t.co/MjvqRAd3LA?amp=1) * [Podcast with Journal Du Coin](https://youtu.be/2tSIeq08tmY) ### PR Media Kit * # Community Posts ### Multi token stable pools explained * [English](https://blog.mercurial.finance/mercurial-explained-multi-token-stable-pools-5d781c74fced) (Original by [@tiddernips](https://twitter.com/tiddernips)) * [Japanese](https://softgate-limited.medium.com/mercurial-explained-multi-token-stable-pools-japanese-be59aa3d9f33) (translated by [@SoftgateJa](https://twitter.com/SoftgateJa)) * [Turkish](https://yasinb61.medium.com/mercurial-a%C3%A7%C4%B1klamas%C4%B1-%C3%A7oklu-token-stabil-havuzlar-c7c772872b3) (translated by [@lingland09](https://twitter.com/lingland09)) * [Chinese](https://copyneko.medium.com/mercurial-%E8%A7%A3%E9%87%8B-%E5%A4%9A%E4%BB%A3%E5%B9%A3%E7%A9%A9%E5%AE%9A%E6%B1%A0-e3e990b9c74b) (translated by [@jdle6](https://twitter.com/jdle6)) * [Korean](https://medium.com/mercurialkorea/%EB%A8%B8%ED%81%90%EB%A6%AC%EC%96%BC-%EB%A9%80%ED%8B%B0-%ED%86%A0%ED%81%B0-%EC%8A%A4%ED%85%8C%EC%9D%B4%EB%B8%94-%ED%92%80-%EC%84%A4%EB%AA%85-b921550347b1) (translated by [@gmchung94](https://twitter.com/gmchung94)) * [Vietnamese](https://medium.com/@sunnwangie/gi%E1%BA%A3i-th%C3%ADch-c%C3%A1ch-ho%E1%BA%A1t-%C4%91%E1%BB%99ng-c%E1%BB%A7a-mercurial-multi-token-stable-pools-bb2c782e1180) (translated by [@SunnWangie](https://twitter.com/SunnWangie)) # Education Quizzes * [Quiz - What is UST?](https://learning.mercurial.finance/ust) * [Quiz - What is PAI?](https://learning.mercurial.finance/pai) * [Quiz - What is Port Finance?](https://learning.mercurial.finance/port)