COMDEX: UNDERSTANDING HOW THE COMPOSITE $CMST MINTING MECHANISM WORKS IN THE HARBOR PROTOCOL

4 min readOct 4, 2022

What do you know about $CMST stablecoin? This article is here to answer the questions you have.

First, $CMST is a stablecoin representing a stable value of purchasing power, which is collaterized with the values of IBC-enabled assets. This stablecoin is a product of Comdex, a decentralized finance blockchain layer of the Cosmos ecosystem.

$CMST helps traders avoid the danger of making payments with weak fluctuating assets in value. This is why the stablecoin is incentivized with the values of assets pooled in the interblockchain (IBC) protocol.

Assets pooled together from two and more blockchains form stable values in the crypto market.

Vaulting

You can easily mint your Composite stablecoin in the Harbor Protocol, a decentralized app on the Comdex blockchain that allows the $CMST to be locked with secured assets and minted in vaults.

Powered by smart contracts such as the CosmWasm and the Cosmos SDK, the Harbor Protocol supply its users with locked-up interest from their $CMST deposits.

This process is known to be called vaulting and is a vital tool for the operators of the Harbor Protocol. Vaulting enables collateral agreements to be struck during loan deals between users and the Harbor Protocol.

You are able to lock up your digital assets as collateral, to be able to mint $CMST in the vaults. Your assets have to be interchain commodities, based on the interblockchain system, and the Comdex network can help you convert your assets to digital formats, based off on this system.

Using cryptocurrency such as the Comdex network’s $CMDX token and the Cosmos ecosystem’s $ATOM token, is possible (as collateral assets) as well.

Liquidation

You would have to mint a minimal amount of $CMST before opening your vault. If the amount required is not in your wallet, you can borrow by collaterizing your assets. A vault must keep the debt value of collateral in it stable, to make sure the $CMST debt value keeps its liquidity running.

When the assets collaterized in any vault lose their value, the price (or ratio) used to collateralize them drops below the minimal amount. This leads to the liquidation of the whole assets, which comes with a penalty, until the price is restored. The penalty fee frees you of incentives until your debts are supplied with enough collaterization.

Varieties

You can own more than two vaults to lock and mint your $CMST with the same listed collateral assets. The vaults can however be differentiated by stability fees that are based off on the minimum collateralization ratios placed in these vaults.

Vaults with lower MCRs give you freedom to borrow more $CMST tokens with same collateral assets, to reduce the dangers of liquidation. However, vaults with low MCRs need high stability fees to equate value. In a vice versa situation, the higher the MCR, the lower the stability fees.

The varieties of vaults provide users with various options which they can utilize to leverage their investments, via loans with longer timeframe and lower fees.

Debt Ceilings

This is a method of vaulting used to cover the total amount of collateral assets, by the prevention of these liquidated assets from dangers and some extreme fluctuations in the market.

This method serves as shield against barriers on the market liquidity of the specific collateral assets you are using.

Price Oracles

These are “feeders” through which assets used as collateral are priced. The values of assets are fetched via external sources, via the oracles, to set the collateral assets value and keep the Harbor Protocol stable (at $CMST = 1 USD), and overcollaterized.

Drawdowns

Vaulted $CMST generates passive yields, and its stability rates are charged for every transaction. These rates are modified via governance, to maintain the value of US$1 = 1 $CMST.

There are certain fees which are known as drawdowns, given when the stablecoin is minted, as zero percent of the minted stablecoin. This means that nothing is withdrawn from the minted $CMST, and the stability fees are still charged per block transaction.

Other News

In other news, Comdex launched the third testnet of Commodo Finance, the banking (lending / borrowing) sector of the network, at https://t.co/3xVZC5C04B.

From the last week of September 2022, Twitter Spaces would be held every week, to discuss the weekly advancement of Comdex’s diverse projects.

About Comdex

A decentralized infrastructure layer of the Cosmos ecosystem, Comdex makes use of its network of financial solutions, giving these to their investors, along with major know-hows about classes of assets as well as other beneficial projects.

To gain more further information about the network, follow the Comdex Network via the following links:

Website: https://comdex.one/home

Academy: https://academy.comdex.one/

Web App: https://dev-cassets.comdex.one/

Newsroom: https://comdex.one/newsroom

Newsletter: www.comdexnewsletter.com/subscribe

Twitter: https://twitter.com/ComdexOfficial

Telegram: https://t.me/ComdexChat

Medium: https://blog.comdex.one

Discord: https://bit.ly/ComdexOfficialDiscord

Reddit: https://reddit.com/r/ComdexOne/

cSwap Telegram: https://t.me/cSwap_DEX