MCDEX (MCB)

Basics

• Founded in: 4-2020

• Mainnet release: 7-2020, live on Arbitrum (3-6-2021).
• Based in:
• A decentralized derivatives exchange.

• From DeFi Weekly (10-4-2020):

"Futures exchange with no KYC. This looks like a fairly polished product that is live and in production, doesn’t get much CT hype though. Maybe the builders are too busy shipping."

Audits & Exploits

• Bug bounty program can be found [insert here].
• Scored a 81% on DeFi Safety (11-2020); "​An audit was preformed by OpenZeppelin in June 5th." With the comment: "Scores pretty even across the board. Nothing weak, good overall protocol."

Bugs/Exploits

• From BlockThreat (26-7-2021):

• "MCDEX fixed an insufficient validation bug after it was responsibly disclosed by Lucash-dev using Immunefi bug bounty program."

Governance

DAO

• From their docs (4-6-2021):

"While launching the Mai3 protocol, we will establish MCDEX DAO based on MCB. MCB holders have the governance right of MCDEX DAO. MCDEX DAO applies the “Off-chain discussion, On-chain governance” method. Since the governance is on the chain, every proposal is essentially an executable smart contract. MCDEX DAO should provide a smart contract factory for the ease of initiating proposals."

The MCDEX DAO governance includes:

• Managing the specific usage of the vault asset;
• Running numerous perpetual swaps as operator;
• Electing a multi-signature address when necessary. This multi-signature address will complete the routine work representing MCDEX DAO as an operator;
• Upgrading MCDEX DAO smart contract

The MCDEX governance proposal needs to be initiated by MCB holders, and the initiator’s MCB voting power has to be no less than 1% of the issued total. The voting quorum has to be no less than 10% of the issued total.  

Treasury

• From their docs (4-6-2021):

"MCDEX DAO has vault. The asset in this vault comes from:

1. Share from the fee captured by MCDEX ecosystem
2. Newly issued MCB in the MCB tokenomics
3. Other payments made to MCDEX DAO The asset in the vault is used to assist the MCDEX DAO mission. Its specific usage includes but not limited to:
4. Liquidity incentive: Incentives for LP of AMM
5. Governance incentive: Incentives for MCB holders who participate in community governance
6. Development incentive: Incentives for community starters and community managers
7. Audit fee and other required fee
8. Add liquidity to products in the MCDEX ecosystem
9. Buyback MCB from the secondary market. The MCB will be part of the vault asset
10. Provide liquidity for MCB (in the MCB liquidity pool on Uniswap)"

Token

Token allocation

• From their blog (29-6-2020):

"Regarding the distribution, 25% of MCB tokens will be allocated to the team and initial investors, 25% will be allocated to the foundation for token sales, and the remaining 50% will be used as incentives for the stakeholders."

Utility

• From their blog (29-6-2020):

"To ensure MCDEX becomes a truly DeFi platform, both the software and the governance should be fully decentralized. In order to better implement decentralized governance, we plan to issue a platform token — the MCB. The MCB token will allow key stakeholders of the MCDEX platform, i.e takers, liquidity providers, contributors of trading strategies, DeFi developers, etc, to participate in the governance to achieve sustainable and robust development.

MCB token will be used for capturing the platform’s value, for providing liquidity to the AMM, and for taking the risk of liquidation and/or enjoying its benefits. The functionality and use-case of the MCB token will gradually expand thereby increasing the liquidity of the MCB tokens."

Tech

• Whitepaper can be found here (8-7-2020).
• Code can be viewed here (8-7-2020).
• Built on: Ethereum and Arbitrum (3-6-2021).

How it works

• From Bankless (8-7-2020):

"Currently, the ETH perpetual contract is live on main net using an on-chain AMM and off-chain order book hybrid model. With MCDEX, traders can long and short ETH with up to 10x leverage without taking custody of other assets, only ETH.

The most unique and innovative part about MCDEX’s ETH-PERP contract is the introduction of the AMM (Automated Market Maker), which generates the funding rate, provides on-chain liquidity, and ensures complete decentralization.

The AMM acts as a money lego for smart contracts to trade with MCDEX’s on-chain perpetual contracts, enabling them to arbitrage, speculate, and manage their portfolios.

Since the AMM has higher slippage than traditional CeFi exchanges, MCDEX has also introduced an off-chain order book for liquidity-sensitive users. The order book, which provides better liquidity than the AMM, is used as the main entry point for trading perpetual contracts."

Staking

• From their docs (4-6-2021):

"Stake MCB to get vMCB to participate in governance. As vMCB is a staking certificate, it is not transferrable. If the holder would like to unstake, there will be a 5% penalty of vMCB, which is distributed to other stakers."

Scaling

• From Paradigm (8-12-2020):

"MCDEX Launched on Arbitrum Rollup Testnet: The MCDEX perpetual swap platform platform is now able to be used on Arbitrum’s layer 2 rollup technology (testnet only for now)."

• Arbitrum is permissioned as of now (6-2021).

Roadmap

• Can be found here (8-7-2020):

"Q2 2020

• Launch of the perpetual contract

Q3 2020

• Launch automated trading and social trading products
• Initial MCB token sale
• Liquidity mining

Q4 2020

• New AMM formula for perpetual contracts
• Decentralized leveraged tokens
• MCB for AMM liquidity incentive
• MCB for on-chain governance
• MCB capturing platform fees
• Decentralized leveraged tokens
• IDO (Initial DEX Offering)

2021

• Enhancement of MCB
  • Use of MCB to provide liquidity for AMM
  • Use of MCB to cover social losses
  • Use of MCB to capture liquidation penalties
• Introducing an optimistic rollup mechanism to improve trading performance.
• Introducing more types of financial assets to the MCDEX platform."

Competition

• dYdX and FutureSwap

Team, Funding, Partnerships, etc.

Team

• Full team can be found [here].
• Liu Jie; founder (former architect of Baidu)

Funding

• Turned out (8-12-2022) to have sold $600k worth of tokens to Alameda.
• From their docs (4-6-2021):

"MCDEX DAO raised $7M from both institutin investors and community to bootstrap the liquidity when V3 launch. Total 700K MCB will distributed to the investors of this round. The MCB is from the community incentive part."

• Completed (12-9-2020) its first funding round with investments from DeFi stalwarts like Mariano Conti, Daryl Lau, and Robert Leshner.
• Sponsors DeFi Weekly (30-6-2020).

Partners 

• Member of Open DeFi (2-9-2020).
• Participated in the DeFi Alliance’s accelerator program (18-9-2020).