First of all, Mercurial Finance would like to express their gratitude to all the community members who have been with the platform during the past 7 eventful months.


Mercurial Finance has had little movement in recent times as the project is still focusing on developing a new set of products including the AMM market-making system and treasury treasury. In addition, Mercurial Finance is also evaluating and planning future best actions.


Within the framework of this article, Mercurial Finance will share updates on the work they have embarked on, key lessons learned, and key conclusions and initiatives for the year. 2022. There will be a lot of real discussion in this post and especially the mistakes that the project has not been afraid to admit to the public.


Stable swap

Stable swaps are at the heart of Mercurial in 2021. The project has developed 3 main products related to stable swaps – token swap pools, mobile pools, and market maker Serum pools . Mercurial Finance pools currently have a trading volume of around 5–10 million per day, about 5–10% of 100 million TVL .


For multi-token swaps, Mercurial Finance solved several important technical challenges, including optimizing the stable algorithm for units of computation to accommodate Solana 's limitations. , build completely custom UX and API.


Mercurial Finance has also developed Defi's stable pools by leveraging an innovative mechanism with on-chain oracles to effectively maintain capital utilization between the 2 tokens in the pool, even if the value of one of the tokens tokens increase over time. For example, Mercurial Finance's non-permanent SOL/SOL pool has proven to perform exceptionally well over time, with the pool remaining balanced and highly efficient even though the price of SOL has diverged significantly.


Finally, later this year, Mercurial Finance partnered with Serum to develop the first AMM pool that could leverage the stable coin algorithm while driving nearly 100% liquidity to the Serum order book. Users can view the beta version here .


As Mercurial Finance distributes these important product suites, Mercurial Finance finds the current approach increasingly difficult to navigate, mainly due to three factors – the obsession with TVL in the ecosystem despite not having many. correlation with added value, difficulty in differentiating beyond liquidity mining and the increasing launch of stable pools, including from Orca, Raydium and Aldrin…


In the meantime, Mercurial Finance will work with partners to launch strategically important pools.


Jupiter Protocol

Starting with the goal of making all stablecoins as useful as possible, Mercurial Finance integrated Serum to develop the first cross-protocol swap aggregator . After receiving a warm reception, Mercurial Finance transformed them into a sister protocol called Jupiter, the platform quickly became the leader in swap aggregator on Solana ecosystem, aggregated on more than 10 exchanges Dex and surpassed the $5 billion mark in trading volume in just about four months since its launch.


Jupiter allows weak stablecoins like PAI and UST to gain immediate utility by being swappable to most other coins and provides the playing field for all AMMs and DEXs on Solana.


Although the Jupiter token has not been launched yet, the project has decided to allocate 5% to MER creators for two years from the launch of the MER staking pool. Any allocations accrued prior to the launch of Jupiter tokens will be distributed retroactively. Full details of the mechanisms will be announced when the staking pool is opened.


Mercurial Finance considers 5% to be a significant allocation, as Jupiter will be a low-emission project as it will likely not need much VC backing nor active LM, unlike most protocols. other liquidity orientation.


In addition, Mercurial Finance will continue to find ways for Jupiter and Mercurial to work more closely.


Institutional Vault (Cancelled)

One big project that Mercurial Finance has spent a lot of time researching is the institutional treasury mentioned in the Q4 update. Although the idea received a lot of support in the chats and the product was close to being technically finished, in the end Mercurial Finance decided to abandon the project for a number of reasons:


Mercurial Finance's main institutional borrower does not want to reveal its name and this will lead to a lack of transparency, users will be suspicious of this obscurity and doubt where their money is going.

Initial user feedback was against a withdrawal period of up to 2 weeks, as institutional partners needed a period of at least a week.

While there is a lot of interest in borrowing from institutional partners, interest rates are mostly around 4%, which is too low considering the lackluster and withdrawal window.

The lesson to be learned here is that it's important to put the community at the center of development throughout the entire development process, including the crucial submission of early drafts.


Community and communication efforts

Mercurial Finance has created multiple exchange channels on Telegram and Discord to optimize the reach of potential users.


Mercurial Finance has also spent a significant amount of time testing a number of initiatives aimed at increasing community engagement. For example, giving away NFT to active contributors in the community and educational campaigns for partners including Terra , Serum , Port Finance , Parrot ...


However, with the growth of its user base and day-to-day operations, Mercurial Finance finds catching up with engagement a challenge because Mercurial Finance's efforts are so spread out with so many different channels. Moreover, this takes up a large amount of resources but brings very little value to the user.


In 2022, Mercurial Finance aspires to a simpler approach, focusing on communication and updates with community members, regularly encouraging constructive discussions about products, marketing and topics other related.


Mercurial Finance will close the Telegram group to focus on the Discord channel, complete the devnet test soon, and involve the community in assessing the direction.


Mercurial Staking

Implementing protocol fees for existing pools would require a lot of effort at the current stage of development but would not yield much value. Additionally, giving rewards in MER governance tokens will increase LM while not increasing platform utility. Ultimately, Mercurial Finance still has problems generating productivity for high TVLs, which is getting worse as TVLs grow.


With these considerations in mind, Mercurial Finance will keep MER staking simple from the start, focusing on Jupiter token emissions over a 2-year period (mentioned above). At the same time, Mercurial Finance will move towards a comprehensive MER staking mechanism where there will be more token utility from profit mechanisms and the possibility of more advanced token models such as liquidity ownership protocols and other model.


Mercurial Protocol Upgrade

As discussed earlier, Mercurial Finance developed a wide range of systems while researching and developing alpha versions of Mercurial v2. With Mercurial v2, the project aims to solve the problem of capital inefficient AMMs by allocating assets to multiple lending protocols, where the profits generated can also be distributed back to the LPs. .


There are a bunch of important issues to deal with, mainly around ensuring liquidity available for swaps, smooth withdrawals, liquidation back to the vault, as well as bypassing Solana's compute units and transaction size limits…


This would require a mechanism with many different protocols, dapps, wallets, and could be generalized as a profit infrastructure API for projects of all types, which would fit very well with the development principle. develop Mercurial Finance infrastructure-level projects.


About Mercurial Finance


Mercurial brings DeFi's first mobile vaults for stablecoins, providing technical tools for users to easily deposit and create liquidity, stable assets for their own requirements or make them available to ecosystem participants with similar needs.