DAM: Release long-tail asset liquidity for the Polkadot ecosystem

On July 13, 2022, the exchange rate between the US dollar and the euro reached 1:1, which is undoubtedly a historic moment. Since the financial crisis of 2008, the dollar has continued to strengthen against other fiat currencies. According to Brent Johnson of Santiago Capital's "Dollar Milkshake Theory," this dollar shortage arises from foreign governments and companies borrowing dollars to expand capital, but the circulating dollars are insufficient to pay off these debts, leading to "massive liquidity" and exacerbating inflation.

In this context, the cryptocurrency market increasingly needs USD-pegged stablecoins. Currently, the most circulated stablecoins in the market are "centralized" stablecoins such as USDT and USDC, which are realized through off-chain fiat collateral. Although this method can provide users with security, the costs of minting and redemption are high, there are centralization risks, and users cannot directly participate in governance. Therefore, decentralized stablecoins represented by MakerDAO have emerged. These protocols generate stablecoins using cryptocurrency collateral, transferring the minting and redemption mechanisms on-chain, with characteristics of decentralization and censorship resistance.

Currently, the total market capitalization of the cryptocurrency market is approximately $1.1 trillion, with BTC, ETH, USDT, and USDC accounting for about 58%. Most DeFi protocols are centered around ETH. However, nearly 40% of asset holders lack similar services, especially users in the Polkadot ecosystem. As a project that has long ranked in the top ten by market capitalization, the DeFi development of Polkadot is actually severely underestimated.

So how can we meet users' demand for stablecoins and Liquidity while providing services that align with the actual situation of the Polkadot ecosystem? DAM was born.

DAM( dPRIME Asset Modules Finance ) is a liquidity protocol built on Moonbeam that allows users to borrow the platform's stablecoin dPRIME with over-collateralization, releasing asset liquidity and fully participating in the Moonbeam and Polkadot ecosystem.

Moonbeam, as the "Ethereum" in the Polkadot ecosystem, bears the important responsibility of hosting smart contracts and is the parallel chain with the most ecosystems. DAM has chosen to deploy on Moonbeam, which is significant for providing lending services to current users as well as for releasing the liquidity of the long-tail assets of the entire Polkadot parallel chain in the future.

Unlike MakerDAO, which can only stake ETH to generate DAI, DAM targets the long-tail assets on the parachains within the Polkadot ecosystem to stake and generate dPRIME, such as GLMR, ACA, ASTR, etc. DAM places greater emphasis on the ecology and assets of each parachain in Polkadot, providing liquidity release services for every user participating in the Polkadot ecosystem.

The core of DAM consists of two tokens: the multi-collateral stablecoin dPRIME and the governance token DAM. Users can deposit collateral recognized by the protocol into DAM's linked-multi-collateral-vault(LMCV) to borrow dPRIME. dPRIME holders can mint, acquire on the secondary market, or convert into other assets. When a borrower's vault is unhealthy, liquidators can receive a portion of the collateral and a bonus.

The DAM token is not only used for community governance, voting, and deciding protocol revenue, but it can also mint collateral assets in the platform. Users can deposit DAM into the stableswap pool to obtain LP Tokens, and stake them on platforms like Curve to earn ddPRIME, which can be used to mint dPRIME or other collateralizable assets.

DAM recently completed a $1.8 million Pre-seed round of financing, led jointly by Jsquare and DFG, with participation from institutions such as Arrington Capital, Ledgerprime, and D1 Ventures.

As the first platform on Moonbeam to support over-collateralized long-tail asset lending, DAM is expected to gradually expand to all Polkadot parachains based on Moonbeam, providing services for every Polkadot ecosystem user. In the future, DAM may open new opportunities for the long-tail asset market in the multi-chain field, allowing every user's asset to "run."