88mph products

88mph offers two non-custodial on-chain products:

1. A fixed-term fixed-rate yield product acting as an intermediary between you and third-party variable yield rate lending protocols to offer the best fixed yield rate on your capital, with a custom maturity up to 1 year.

2. A yield speculation instrument, called Yield Tokens (YTs), allowing users to speculate on the variable yield rate of third-party protocols such as Compound or Aave.

By using the fixed rate pools, users receive MPH tokens that can be used to obtain veMPH tokens to earn protocol revenues and exercise voting rights.

Fixed yield rate

88mph offers a fixed yield rate with a custom or preset maturity for various supplied assets, such as DAI, USDC, WBTC, ETH, etc. When users/protocols supply assets, 88mph acts as an non-custodial, fully on-chain intermediary between them and third-party variable yield rate protocols to offer the best fixed yield rate on their capital.

How it works

1.Deposit assets: provide any amount of assets with a maturity between 1 and 365 days to get the displayed fixed yield rate at maturity.

2.Your assets generate variable APY: your deposit generates a yield at a variable rate on third-party protocols, such as Aave or Compound, until it reaches its maturity.

3.Get a deposit NFT: fixed rate pool users receive an NFT (ERC-721) representing the ownership of their deposits and the related fixed terms. It gives you full control over your deposits. Think about it as your private key allowing you and only you to access the assets you provided via 88mph.app. Store it safely.

4.Get MPH rewards: by using 88mph fixed rate pools, you get MPH tokens.

5.Withdraw: withdraw, top-up, roll over your deposit + fixed-rate yield at any time.

For example, a 12-month deposit of 100 DAI will deliver a fixed-rate yield after 12-month of variable yield generation on a third-party protocol. If the fixed yield rate at the time of deposit was 10%, then the user get 10 DAI of yield when the deposit reaches its maturity one year later and some MPH tokens during the deposit duration.

Fixed yield rate model

88mph determines a deposit's fixed yield rate based on the 30-day exponential moving average (EMA) of the variable yield rate of the underlying yield protocol, such as Aave or Compound. 88mph offers between 37.5% and 75% of the EMA as the fixed yield rate based on the length of deposit, with longer deposits earning a lower rate.

Withdraw at any time

Each deposit has a maturity date, after which the owner can withdraw the deposited assets plus the fixed-rate yield.

Before the maturity date, the user can also withdraw either part or all of a deposit, though the fixed-rate yield would be forfeited, and an additional early withdrawal fee would be applied (0.5% of the withdrawn amount).

The forfeited yield would continue generating yield on third-party yield protocols to improve security.

The withdrawal fee would be distributed to veMPH holders as protocol revenues.

Topping up a deposit

The user may top up a deposit before reaching its maturity date, which essentially creates a new deposit with the same maturity date at the currently offered fixed yield rate, except it is merged with the existing deposit.

There are two benefits of topping up a deposit rather than creating a new one:

1. For regular users, the gas cost of topping up a deposit is cheaper than creating a new one.

2. For protocols, only a single deposit needs to be kept track of, reducing the amount of accounting needed.

Rolling over a deposit

After a deposit is mature, the user can roll it over to create a new deposit using the principal + fixed-rate yield of the old deposit. The maturity date is customizable just like regular deposits.

The benefit of rolling over a deposit rather than withdrawing a deposit and creating a new one is the cheaper gas cost and fewer number of transactions.

Deposit NFTs

After making a custom-maturity deposit, the user receives an ERC-721 NFT (Non-fungible token) that represents the ownership of the deposit and its fixed terms, which can be transferred or traded like regular NFTs.

Users have the option to customize the NFT's metadata: title, description, image, etc. Deposit NFTs are not burnt at any point, to preserve their artistic value.

It's an experimental feature allowing everyone to mix creative content with decentralized finance. For example, you can attach a GIF from your favorite crypto artist to a deposit and hang it up on a wall, staring at it every day, knowing that it has an intrinsic value generating a yield at a fixed rate.

Custom maturity

A deposit's maturity refers to the last date of a deposit's term. 88mph protocol allows users to customize the deposit maturity by selecting the number of days after which they will be able to withdraw their principal + fixed-rate yield earned. The maximum maturity available on 88mph is currently 365 days. Users can withdraw their principal at any time.

Yield tokens

Speculate on future variable-rate yields and strengthen the solvency of 88mph protocol.

Yield tokens or YTs are fungible ERC-20/ERC-1155 tokens that allow speculators to profit from the rise in the variable yield rate of lending protocols (such as Compound or Aave) or hedge part of their borrowing costs of a loan (e.g. Dai borrower on Compound would purchase cDAI YTs on 88mph).

YTs can be purchased by users when a fixed yield rate deposit is made on 88mph, as each YT is tied to a deposit. YTs give holders the right to earn all the future variable-rate yields generated by the corresponding deposit + the purchase cost of the YTs.

Principle

YTs are more than an instrument for speculating on yields.

88mph by essence is highly dependent on market rate volatility. Let's say one depositor brings 1 WBTC with fixed terms (3.75%/1y maturity) and the variable rate of WBTC on the underlying lending protocol then decreases drastically (ie from 10% on avg to 1%). The protocol then needs to find 2.75% extra yield to ensure the redeemability of the 1.037 WBTC owed to the depositor at maturity.

Knowing the above, the protocol needs to insure itself against market rates' volatility. While surges in variable rates are beneficial to the protocol, drops, as in the example above, are less desirable.

For this reason, 88mph transfers this volatility to other actors looking to get exposure to market rate volatility with significantly smaller capital requirements than the deposit tied to the yield token. Therefore, the leverage available can be tremendous for Yield Token holders (pay 0.035 to earn a variable rate on 1.035).

So to summarize it, YT holders are the agents ensuring the protocol against drops in market rates, making sure that the protocol has always enough reserves alongside the net interest margin to stay solvent.

Yield payment

The yield payment to yield token holders is automatically triggered whenever part or all of the corresponding deposit is withdrawn, and it is also possible to manually trigger it via the Claim Button in the user interface or by calling the contract functionDInterest.payInterestToFunders().

Yield token holder refund

When the underlying deposit of a set of yield tokens is withdrawn before maturity, the token holders will receive a refund, the amount of which is the minimum of an estimated lost yield calculated using the average floating yield rate and the fixed-rate yield offered on the withdrawn funds. If the deposit is withdrawn completely, the yield token holders will no longer receive interest payments, and a new yield token contract will be created when the user tops up the deposit in the future. The possibility of early withdrawal makes the return on yield tokens less certain, making it more difficult to price them.

Protocol fees

• A fee of 20% is extracted from the fixed-rate yield generated by the user's deposit. The fixed yield rate displayed on 88mph is after fees.

• A early-withdraw fee of 0.5% is extracted from the user's deposit if the deposit is withdrawn before the maturity date is reached.

• Incentives distributed by the underlying protocols used by 88mph, such as AAVE and COMP tokens, are collected by 88mph and redistributed according to the protocol revenues distribution.

Risk mitigation

The main risk of depositing funds into 88mph is the risk of insolvency, the situation where 88mph does not have enough funds to return the deposited funds plus fixed yield to a user.

88mph and CADLabs have worked together to create a radCAD agent-based model to simulate liquidity and network revenue dynamics for the 88mph v3 protocol. To understand how 88mph model works to mitigate those risks, we invite our users to read the analysis of 88mph protocol dynamics using radCAD pubished by CADLabs.

88mph relies on three lines of defense to mitigate the risk of insolvency (listed in order of which gets rekt first):

1. An oracle that can accurately price (not necessarily predict) future yield. This ensures that yield tokens get sold most of the time.

2. Frequent early withdrawals, which allow 88mph depositors to accumulate the forfeited yield to build up a surplus that acts as a backstop.

3. Volatile floating yield rates in the underlying yield protocols, which allows 88mph to use the surplus yield from deposits that were offered low fixed yield rates to subsidize the deficit caused by the deposits that were offered high fixed yield rates.

Fixed yield rate oracle

For the first line of defense, building oracles for pricing future yield is quite difficult, since there is not a lot of prior work on the matter. Realistically speaking, 88mph will probably settle with building an oracle that offers a rate lower than the market rate most of the time, which trades efficiency for security.

Yield surplus

For the second line of defense, integrating with other protocols, specifically vaults a la Yearn, will likely help a lot. Vaults generally have frequent deposits & withdrawals, and whenever an early withdrawal happens, not only is the forfeited yield used for 88mph's risk mitigation, an early withdrawal fee is also taken. Using MPH incentives to get vault protocols on board will probably be worth it.

Yield balancing

For the third line of defense, there's not much we could do about it. Vault integrations will likely help a bit though, since frequent deposits & withdrawals mean there will be diversity in the fixed yield rates offered to deposits, giving the balancing act more to work with.

MPH Tokenomics

MPH token address: 0x8888801af4d980682e47f1a9036e589479e835c5​

MPH Total supply: The total supply of the MPH token is capped at 1,888,888 tokens.

To avoid a limitation on the future growth of 88mph, the keys to mint MPH tokens will not be burnt, so that after January 1, 2026, MPH holders may vote to ratify a new token supply cap if desired.

Governance

MPH holders have the power to shape the future of the protocol. A dedicated Snapshot is live to enable the community of users to signal their preferences on the project developments.

The governance process works by having users signal their preferences with their veMPH tokens on various proposals ranging from protocol parameters to smart ways of using the treasury for allocating grants to teams and individuals who want to shape and help the growth of the 88mph and Ethereum ecosystem. The 88mph community can vote on 8IP - 88mph Improvement Protocol - proposals using their veMPH as their vote's weighting.