August 20, 2024
Mission briefing:
Of all of DeFi's foundational building blocks, credit and trading protocols are among the most powerful. They allow traders and smart contracts to lend and borrow tokens in a decentralized setting. This improves capital efficiency by creating a new source of on-chain yield and leverage opportunities.
Today, Mars brings its newest version of the credit and trading protocol to Neutron. With it, you can deposit assets for use as collateral for borrowing/shorting. With the upgrade, Mars also adds support for spot and margin trading on Neutron.
Importantly, it also lays the foundation for the rapid rollout of advanced features in the coming weeks/months including:
Read on to learn how to access Mars v2, and for estimates timelines for Mars’ upcoming upgrades.
Today’s initial deployment of Mars v2 brings a more powerful version of Mars’ Red Bank to Neutron. With it, users can deposit assets for yield and optionally use those assets as collateral for borrowing/shorting. The new Red Bank launched today with support for 10 key assets:
Starting now, explorers can navigate to app.marsprotocol.io, connect their wallets, and deposit assets into the new Red Bank on Neutron for yield.
Optionally, users can also tap their deposits as collateral to borrow additional tokens. For example, deposit $1,000 worth of dATOM and borrow up to $650 worth of ATOM (dATOM LTV 65%).
Please note that if you have pre-existing positions on Mars v1’s Neutron deployment, you should migrate them to Mars v2 now. Both deployments will continue to coexist on-chain, however, all upcoming features will be deployed on Mars v2. Learn how to migrate your Red Bank positions in the Mars docs now.
Explorers can always access their desired versions of the app here:
To prioritize stability and security, all assets will be subject to a deposit cap. The Martian Council will have the ability to raise deposit caps and add support for additional tokens that adhere to the Mars Risk Framework 2.0. Already, support for Drop Celestia (dTIA) is expected to be added soon.
Today’s arrival of the new Red Bank on Neutron brings with it a new feature on Neutron: spot and margin trading. With spot trading, users can swap the top crypto assets without leaving the interface at app.marsprotocol.io.
With margin trading, users can also long and short assets using leverage. The entire value of a user's account is used as collateral to long or short assets (over and beyond the sum value of the user’s deposited collateral).
For leveraged longs, users will be able to select an asset to sell/borrow from the Red Bank (typically a stablecoin) and an asset to buy/long. Behind the scenes, the credit account will automatically borrow stablecoins from the Red Bank and swap them for the desired asset. At the end of the trade, the user will hold more of their desired asset but have a loan in stablecoins. If the value of the asset increases, the stablecoin debt becomes profitable to repay.
Any asset that is borrowable in the Red Bank can also be used to initiate a leveraged short position. From the UI at app.marsprotocol.io, a user can select the asset to short and the asset to short it against (typically a stablecoin). On the backend, the short transaction involves borrowing an asset from Mars and selling it for another asset the user’s willing to hold for the duration of the short. This effectively creates a borrow position for the asset you are shorting. If the value of the asset decreases, you can repay your loan at a lower cost.
As with any form of leveraged trading, the potential for gains and losses is amplified. To avoid the risk of liquidation, ensure your credit account’s health factor is greater than 1. Learn more about margin trading in the Mars docs, then explore margin trading at app.marsprotocol.io.
Today’s release lays the foundation for additional DeFi functionality on Neutron. Beyond borrowing and lending, users will soon be able to use their Mars-based credit accounts for leveraged yield farming, high-leverage strategies (HLS) like leveraged staking, copy-trading vaults and perpetuals or perps, which will offer higher leverage than margin trading.
Developers will also have the ability to use Mars v2 as a core primitive for the creation of vaults, leveraged yield farms, flash loan protocols and more.
As previously mentioned, Mars v2 will be rolled out in phases on Neutron. Following today’s activation of the money market and spot and leverage trading, additional features are expected to launch per the timeline below:
Marsprotocol.io’s Terms of Service will prohibit use of Outposts on the web app from, or by persons ordinarily resident in, the United States and its territories and will have both IP-blocking and dynamic VPN-blocking to enforce this prohibition. This measure is being taken in light of legal uncertainties existing in the aftermath of the CFTC’s actions relating to bZx/Ooki protocol and to enable the web app to be used more broadly by persons outside the United States. A downside of IP-blocking and VPN-blocking is that “false positives” can occur whereby non-U.S.-residents could be blocked from the web app by mistake–to mitigate such issues, the web app code will be made open-source and can be run locally (subject to local laws). Please use caution and consult legal counsel regarding whether use of the Mars Protocol or local operation of the web app is legal in your jurisdiction.
Dive deep into Mars’ vision and capabilities in the Mars docs. Mars Protocol aims to recreate the CeFi trading experience in DeFi. With the Mars v2 deployment on Neutron, the journey truly begins. Follow Mars and Neutron on Twitter for critical updates.
Mars is a novel interchain credit and trading protocol primitive facilitating non-custodial borrowing and lending for the Cosmos ecosystem and beyond. Its hub and outpost architecture allows Mars to operate on any chain in the Cosmoverse, and enables a new primitive: Credit Accounts. Credit Accounts can give their pilots DeFi superpowers to engage in virtually every activity they might encounter on a centralized exchange: spot trading, margin trading, lending and borrowing, HLS Staking and Farm, and Perps — all in a single decentralized credit account represented by a transferable NFT. Explore it now at marsprotocol.io or in the Mars v2 Whitepaper.
Neutron is an innovative smart contract platform built on the Cosmos SDK, designed to empower developers to create decentralized applications (dApps) with seamless interoperability. Utilizing Inter-Blockchain Communication (IBC), Neutron enables secure cross-chain transactions across the Cosmos ecosystem. Learn more at Neutron.org.
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Remember, Cosmos, Neutron, Osmosis and Mars are experimental technologies. This article does not constitute investment advice and is subject to and limited by the Mars disclaimers, which you should review before interacting with the protocol.
