Iron Defi Coin Review: A Multi-Chain Partial-Collateralized Stablecoin

About Iron

Iron Stablecoin – a digital asset that is pegged to fiat currency – is considered as the most important cornerstone in DeFi. Stablecoins provide an excellent method to park money during trading or to use as a base currency. The most prominent use case of stablecoins is stability and how it helps cryptocurrency users, especially traders, hedge against volatility. There are several types of stablecoins, including fiat-backed, crypto-collateralized, and algorithmically stabilized stablecoins. While fiat-backed stablecoins are not 100% decentralized, crypto-collateralized stablecoins like DAI have issues of over-collateralization.

Iron On the other hand, purely algorithmic protocols such as Basis, ESD, DSD and others provide a very noble solution to establish stablecoins with no backed assets. The issue with purely algorithmic protocols is their ability to react on volatility, which results in many of these algo-stablecoins ending up in deadzone. Inspired by FRAX – the unique fractional-algorithmic stablecoin on Ethereum, using the same design, we’d like to introduce IRON, the first partial-collateralized stablecoin on Binance Smart Chain.

Quick Fact About Iron

Capital Efficiency

In traditional markets, the term “capital efficiency” is often used to refer to the ratio of money that a company must spend to receive a certain return. It speaks to the return on investment a company receives for a certain investment, product or service. This term is often used in reference to marketing. For the crypto market — particularly for stablecoins — the way they think about capital efficiency is entirely different. In this chapter, they are discussing capital efficiency in crypto, and why fractionalized stablecoins like IRON are more efficient than their over-collateralized alternatives like USDC, USDT, DAI and others.

Price Stability

The IRON token’s price stability is supported by multiple mechanisms. The main pillar of price stability comes from the possibility of redeeming IRON token for approximately one U.S. Dollar worth of tokens.

Another mechanism to support the price peg is the arbitrage opportunity offered by the minting and redeeming functions.

If the price of the IRON token is less than one U.S. Dollar, then anyone can purchase it on the open market and redeem it for approximately one USD worth of value when there is a profitable arbitrage opportunity.

If the price of the IRON token is more than one U.S. Dollar, then anyone can mint it with the protocol for approximately one USD worth of value and sell it on the open market when there is a profitable arbitrage opportunity.

Price

The live Iron price today is $0.749512 USD with a 24-hour trading volume of $631,510 USD. Iron is up 0.56% in the last 24 hours. The current CoinMarketCap ranking is #2766, with a live market cap of not available. The circulating supply is not available and the max. supply is not available.

STEEL Distribution

Community (80%)

80% or 80 million STEEL tokens will be emitted (distributed) in various forms to liquidity farmers and token staking users over a period of 36 months. The daily emission of STEEL is subject to change, as the team creates new pools, deactivates pools, changes the rate of rewards for some pools or allocates some STEEL rewards as boosted rewards to incentivize a pool with a partner of IronFinance.

Team (20%)

20% or 20 million STEEL tokens of the total supply is reserved for the team of IronFinance. This amount is paid to the team linearly over a 12 months period. These funds will be used to pay for salaries, marketing expenses, audit costs and all other expenses the team must pay for to grow the protocol.

Algorithmic Token

STEEL – Iron Share – is the algorithmic token which accrues seigniorage revenue and excess collateral value . IRON is a stablecoin pegged to $1, partially backed by collateral like BUSD, USDT and partially backed algorithmically by STEEL. The ratio of collateralized and algorithmic, so called Collateral Ratio (CR), depends on the market pricing of IRON.

The ratio of collateralized and algorithmic assets will depend on the market price of IRON. If IRON > $1, meaning the market’s demand for IRON is high, the system can de-collateralize by decreasing the CR. If IRON.

Iron Finance USDC vault

USDC tokens used as collateral for the minted IRON stablecoin tokens is stored in the protocol’s time-locked collateral smart contract, however, in optimal conditions, the daily redemptions are only a small part of the supply of IRON token. In this case, a large portion of this collateral is idle and economically speaking inefficient.

Vaults changed this by investing a large portion, but not all of the USDC token collateral to generate passive income to the protocol and to the TITAN single token staking pool to incentivize TITAN purchases and staking.

Out of all the USDC the protocol stores as collateral, a maximum of 75% is invested into Vaults, while the remaining 25% is kept by the protocol to serve the daily redemptions of IRON token.

If this 25% of all the USDC collateral, stored in the protocol’s time-locked collateral smart contract, serving the daily redemptions of IRON token, decreases to 15% or less, then the Vaults will withdraw some of the invested USDC tokens back to the protocol.

Liquidity and Partners

IRON liquidity on Polygon is placed with QuickSwap and Sushi Swap. The DEX aggregator partner is 1inch. IronFinance’s partners for auto-compounding vaults as well as IRON and TITAN pools are Beefy Finance, Polycat Finance, Eleven Finance, Adamant Finance and Auto Farm. For a detailed list of available vaults, pools and farms, see Pools and Vaults.

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