One of the first ventures to carry on-chain real-world properties, DeFi Money Market, unexpectedly reported last night that it has “ceased operations.”
The website issued guidance to users about how to redeem yield-bearing mTokens and said that on February 10, yields for the tokens would decrease to 0 percent.
As a result of regulatory inquiries, DMM is ceasing operations. mTokens can be redeemed with interest accrued to-date through the following link: https://t.co/mWB1WacKaH
— DMM DAO (@DMMDAO) February 5, 2021
Some also suggested that in its release, the regulatory attention cited by the team could be related to its failed token launch. Shortly after their token offer, there were rumors that records posted by the organization to show the loan backing unintentionally exposed the identity of loan investors.
DMM’s Shutdown
DMM’s complete statement is as follows:
As a result of regulatory inquiries, DMM is shutting down. Effective immediately, mToken minting is no longer available. mToken redemption will remain available indefinitely, though the interest rate on mTokens will drop to 0% on or about February 10th, 2021. Capital and interest are currently available to fund redemption of all outstanding mTokens plus accrued interest. Please redeem your mTokens as soon as possible.
An additional fund of available assets is being established to facilitate redemption of DMG tokens. Details will follow. We’re sure that you have questions, but unfortunately we are not able to answer questions at this time.
DMM regrets the necessity of this action, and would like to thank the DMM community for its support and active participation in this project.
The announcement has contributed to a precipitous fall in the DMG governance token of DeFi Money Sector. Since slipping from last night’s $.53 highs, DMG currently trades at $.093 cents.
However, there might be some hope for holders. The project claimed in DMM’s announcement that “An additional fund of available assets is being set up to facilitate the redemption of DMG tokens,” and that “will follow” more details regarding this fund.
What was DeFi Money Market (DMM)?
The DeFi Money Market, founded in Dubai in 2019, is the brainchild of the DeFi Money Market Base. The purpose of the project is to connect everyone and everybody with financial and blockchain resources, inspiring people everywhere.
The DMM ecosystem is: “a permissionless and fully decentralized protocol to earn interest in any Ethereum digital asset backed by real-world assets represented on the chain” according to the DeFi Money Market Protocol whitepaper.
In a manner that is far more robust than current DeFi protocols, DMM helps users to earn constant attention.
There is no fluctuation in the interest rate paid out by DMM securities. For those with a lower risk appetite, this allows DeFi more available. This is made possible because real-world properties that can be monitored using the blockchain are backed by DMM assets. This brings trust to the protocol and clarity.
DMM properties are therefore verifiably revenue-generating, which ensures that depreciation should not be included within the ecosystem as leverage.
There are still overcollateralized underlying assets included in DMM. Any underlying asset’s income is often greater than the annual percentage yield (APY) charged out of the DMM asset. In brief, it is assured that the underlying asset receives greater revenue than the asset given against it.
During the past year, DMM had announced integration with Chainlink oracles.
In addition, due to the incorporation of delegated transfers to Ethereum, the DMM ecosystem does not need any gas costs.
