The last few months have been incredibly active; we've been pushing boundaries, building, experimenting, fine-tuning, and deploying robust and secure products to create a unique DeFi ecosystem without limits. However, our journey is far from over, and it's time to provide you with a global update on our progress.

Our mission on MultiversX began with kickstarting DeFi and increasing on-chain DeFi TVL. Now, we aim to address the final piece of the puzzle that is still causing issues for both MultiversX and Hatom. The lack of stablecoin liquidity hinders our growth. The absence of an EGLD-backed stablecoin forces users to forgo exposure to their EGLD whenever they need liquidity, creating selling pressure on EGLD. This is what we aim to tackle with this protocol update, which will primarily focus on two of the most impactful products in the Hatom Ecosystem: Hatom USD (USH) and Booster V2.

Without further ado, let’s delve into these two modules in more detail:

Booster V2

While Booster V2 was initially designed to introduce additional features and improvements, we have further refined the model to enhance its utility.

Let’s break down the new features and implementations:

• Global Position Tracking: Optimizes boosting by monitoring a unified global position rather than individual positions, enhancing efficiency.

• Rebalance at Protocol Level: Reduces gas fees for claiming rewards by integrating rebalances directly at the protocol level.

• Multiple Deposit Options: Enables the deposit of HTM LPs and Metastaking tokens into the Booster Module, which will track only the HTM token's weight.

• Simplified LP/Metastaking Creation: Allows for direct creation of LP/Metastaking positions within the Booster Module itself, eliminating the need to use the xExchange dashboard.

• Reward Structure Adjustment: Shifts all rewards from USDC to EGLD, with claims exclusively in HTM to boost demand and buying pressure for the HTM token.

One new key improvement in the upcoming version of the Booster that has been added is the elimination of the HTM cap in the HTM Booster to achieve optimal boosting. Currently, users must deposit an equivalent of 10% of their collateral value in HTM tokens within the booster to attain the maximum Boosted APY on their positions. With the launch of Booster V2, this cap will be removed, allowing users to increase their APY in proportion to the amount of HTM they stake.

With the new implementation of Booster V2, rewards will be split into two batches.

In the first batch, users can achieve a certain APY by staking a specific ratio of HTM compared to the collateral they have supplied.

In the second batch, this cap will be removed, allowing users to increase their APY in proportion to the amount of HTM they stake. The more HTM tokens you stake beyond the threshold set in the first batch, the higher the APY you can achieve. However, this metric still depends on the value of your collateral and the total amount of HTM staked by other liquidity providers.

For example: (Please note that all the metrics provided are hypothetical and are intended solely to illustrate the concept.)

• In the current Booster implementation, there is a maximum APY (let's consider that the EGLD Booster APY is 6%) that users can achieve by staking 10% of the value of their collateral in HTM. Staking additional HTM beyond this does not increase returns, and the rewards from users who do not reach the optimal boost level within the booster are recycled.

• In the new implementation, we have opted for a dual-batch mechanism. The first batch is implemented to guarantee a threshold, maintaining the same rules as the old implementation. For instance, if users stake 5% of the value of their collateral in HTM, they could achieve an optimal APY of 2%. The remaining rewards will be distributed in a second batch with no cap, allowing users to potentially generate a higher APY than the 6% achievable in the previous implementation. This model allows them to earn rewards from users who didn't fully boost their position or to out-earn other users by staking more HTM.

To put it simply, the first batch ensures that a threshold ratio of HTM staked to collateral is met and maintained in the protocol. The second batch is where the majority of the rewards will be distributed and where strong competition will take place.

Hatom has invented the concept of the Booster, setting itself apart from other liquidity protocols by placing the HTM token at the heart of its ecosystem, thereby creating an entire financial economy around it. It's crucial for us to refine this model and iterate on it to maximize its impact while ensuring the best possible user experience. Hatom has already distributed millions of dollars in incentives, demonstrating the effectiveness of this model in attracting liquidity and sustaining a healthy ecosystem. As we move toward a sustainable state of incentivization, it is essential to ensure that the final implementation of the Booster is robust before integrating the governance module and allowing token holders to manage its parameters.

The process and user interface will be very intuitive and easy to use. Users will have access to a gauge that allows them to estimate the APY they can achieve by staking more HTM tokens, simply by adjusting it.

Hatom USD (USH)

From the start, we recognized the liquidity issue with stablecoins in the MultiversX ecosystem. With under $30 million in stable liquidity, the growth of DeFi products is restricted. The ecosystem needs a native stablecoin that not only offers a hedge against volatility but also provides a straightforward way for users to earn passive yield.

The low stable liquidity primarily affected the Hatom Lending Protocol, where high demand and positive market sentiment led users to leverage their positions for long strategies on chosen assets. Consequently, the utilization rates of both USDC and USDT exceeded optimal levels despite the constant increase in their respective TVL, driving interest rates to mid to high double digits during certain periods.

Let’s discuss the innovative design and progress on USH:

Facilitators

Different from USDC and USDT that must be brought into the ecosystem through the bridge, USH will be minted natively through multiple methods, also called facilitators. These facilitators will ensure that users are able to access USH in a simple and efficient manner.

At launch, USH will have two facilitators available:

1. Lending Protocol

Users will be able to mint USH directly within the Hatom Lending Protocol, an experience similar to taking loans. However, it’s important to note that 'minting' USH is different from 'borrowing' it. As a result, the rates for minting USH through the Lending Protocol are fixed and not influenced by utilization rates, unlike when borrowing assets like USDC or USDT.

These rates vary based on the discount factor of the collateral used; more liquid and stable assets yield better rates than less liquid ones. Note that USH cannot be minted through the Lending Protocol using EGLD or sEGLD; instead, these assets must be used via a separate facilitator, known as Isolated Pools.

1. Isolated Pools

The Isolated Pools represent a crucial component of the USH Ecosystem, offering significant revenue potential through its innovative mechanism. Users can deposit EGLD or sEGLD to mint USH under specific conditions:

• Minting USH with EGLD:

Users can deposit EGLD at a 0% Supply APY to mint USH with no minting fees. The deposited EGLD is staked in Liquid Staking to obtain sEGLD, which is then deposited in the Lending Protocol to earn a base supply APY.

• Minting USH with sEGLD:

Similarly, users can deposit sEGLD into the Isolated Pools to mint USH without a minting fee. When using sEGLD, the users’ exposure shifts entirely to EGLD, as all rewards from sEGLD are retained by the protocol to boost the Staking Module yield.

The Isolated Pools provide a key advantage by allowing users to mint USH with no fee while maintaining exposure to potential price increases in EGLD. This setup enables users to leverage the stability of USH without the concern of interest rates that could lead to position liquidation.

Moreover, this module is poised to become the top revenue generator within the protocol. Assets deposited in the Isolated Pools generate income through Liquid Staking and the Lending Protocol. In the future, we can explore the possibility of using a portion for Leverage Liquid Staking strategies when conditions are favorable, further optimizing the returns.

USH Staking Module

Establishing robust facilitators to enable the safe and reliable minting of USH was crucial; however, we also recognize that building a powerful stablecoin requires strong utility and significant benefits.

While users will benefit from fixed or even zero minting fees, along with numerous integrations within the MultiversX ecosystem, our goal is to ensure a robust mechanism for users to generate high yields on their stablecoins.

Through the Staking Module, users can deposit USH or USH LP tokens, such as USH/USDC, USH/USDT, USH/EGLD, and USH/HTM, to generate yield on their positions. We have designed the source of this yield to be as organic as possible, using the revenue generated by all the USH facilitators.

Consider this example based only on the revenue from the Isolated Pools:

Suppose $100M worth of EGLD and sEGLD are deposited in the Isolated Pools. Since it's an over-collateralized minting, let's assume $50M worth of USH will be minted to maintain a safe health factor. This collateral is minting at 0% interest and will generate a 7% APY through Liquid Staking and the Lending Protocol, equivalent to about $7 million annually or $580,000 monthly in rewards for USH stakers.

Since the protocol earns rewards on $100 million but distributes them to just $50 million worth of USH, the APY for USH stakers effectively doubles, reaching 14%. With EGLD's inherent volatility, any price increase in EGLD further boosts the APY, motivating additional USH buying/minting and thus increasing liquidity for USH.

To integrate HTM within the USH ecosystem effectively, we are excited to announce that all rewards in the Staking Module will be distributed in HTM tokens. The revenue generated from users minting USH through the Lending Protocol and Isolated Pools will be used to purchase HTM tokens from the open market and distribute them to stakers.

USH will be the highest revenue-generating product on the MultiversX Blockchain, with all that income redirected to the HTM token.

This strategy will create millions of dollars in additional buying pressure on HTM, significantly boosting demand for the token without direct community involvement. The buyouts will happen on a daily basis and will constitute the largest buyback module of an ESDT to date.

Please note that a portion of the rewards generated by the USH facilitators will be allocated to incentivize the Lending Protocol Markets, alongside other sources of revenue. This ensures that the protocol is driven by its utility and remains fully sustainable. This approach is designed to eliminate our reliance on the treasury for offering protocol incentives, promoting a more self-sustaining ecosystem.

Booster V2 x USH Staking Module

We went a step further in developing a strong utility for HTM in the USH Staking Module; given the real success that Booster V1 had at launch, we have decided to offer a similar implementation for users in the USH Staking Module.

We are pleased to announce that Booster V2 will now play a significant role not only in the Lending Protocol but also in the USH Staking Module.

Here are a few of the benefits of the Booster V2 in the USH Staking Module:

• Yield Optimization: Earn rewards for your USH LP & farm tokens in addition to the USH staking module yields.

• Booster V2 Implementation: Users can access a base APY when staking USH in the Booster, with additional rewards earned when staking HTM tokens. Staking caps will be removed, allowing users to stake any amount they choose, with yields increasing proportionally to the amount of HTM staked.

This implementation allows users to boost the APY on their USH-staked positions within the USH Staking Module by allocating a specific amount of HTM to the Booster Module. Mirroring the design of the HTM Booster in the Lending Protocol.

Peg Mechanisms

The peg mechanism is the most important feature of a stablecoin, therefore we spent countless hours researching and adjusting our mechanisms:

Soft Peg Mechanism:

In the Lending Protocol, USH will consistently be valued at $1, regardless of its market price elsewhere. For instance, if USH is trading at $0.99 on a decentralized exchange like Ashswap, users can purchase USH at this lower rate and use it to repay loans valued at $1 within the protocol, thereby profiting from the difference.

Hard Peg Mechanism:

Through the Hard Peg Mechanism, if USH trades at a certain percentage below $1, Redemption Mode is activated. In this mode, anyone can seize users' collateral up to a specified "Borrow Limit Used" for the account. The process starts with the least solvent accounts and continues to the most solvent until the peg is restored. Unlike liquidation, redemption does not incur any penalty for users.

This update aims to provide an overall view of the entire design without overwhelming you with technical jargon. More detailed definitions and explanations of the concepts will be available in our updated documentation on USH.

Development Status

We are pleased to announce that the peer code review of all USH modules has now been completed, and both the audits and front-end integration will commence this week. We recognize the importance of these next steps and acknowledge the complexities and potential challenges they may entail. Moving forward, our focus will be on ensuring that the audits are conducted to the highest standards of accuracy and security.

USH is a complex protocol that aims to once again elevate the status quo of DeFi within the MultiversX ecosystem by solving real problems and enhancing user experience like never before. As we make progress on both the front-end integration and audits, we will be able to estimate an exact release date. However, as specified in Protocol Update #7, we are still targeting a launch timeframe of late Q2 to early Q3.

Go-To-Market Strategy

First, it's important to emphasize that Booster V2 and USH will be released simultaneously. We are developing a robust Go-To-Market Strategy for the launch of USH, focusing on the design's impact on the HTM token. Initially, a Private Mainnet for USH will be launched, operating exclusively with our network of partners and co-led with the MultiversX Foundation.

This Private Mainnet will operate for one month, using EGLD and sEGLD deposited by partners to generate our initial revenue. This revenue will be accumulated and used to buy back HTM tokens from the open market and distribute them as rewards. We anticipate a TVL in the seven-figure range during this phase, generating over $1.5 million in rewards for the first distribution.

At the moment we announce the public launch of USH, all rewards generated in the first month will be immediately used to buy back HTM tokens and transferred to the USH Staking Module to kickstart the protocol and to establish the bootstrapping APY for staked USH. This strategy will create significant buying pressure on HTM, positively impacting the token’s market value. We are mindful of potential slippage impacts and will limit this aggressive buyback strategy to bootstrapping.

Right after the launch, these continuous buyouts will occur on a daily basis, creating sustainable growth for HTM.

Regarding the USH Airdrop, all participants will receive their allocations shortly after USH is publicly launched on the Mainnet and stabilized. Until then, users maintaining a 200% Booster Percentage in the HTM Booster during the daily random snapshot will share the daily allocation based on their liquidity weight.

Accumulator

The Accumulator was initially designed to allow users to claim rewards in either USDC or HTM, offering a 5% bonus for choosing HTM. However, with the new change of distributing rewards exclusively in HTM, the Accumulator will serve a better purpose.

As an alternative, we are exploring an "Affiliate Program." This initiative will enable users to introduce others to the Hatom Ecosystem and earn a percentage of the rewards their referrals generate. For instance, if someone refers users who earn a total of $100,000 a month in rewards, the referrer would be entitled to claim $5,000 without affecting the earnings of the referred users.

While this is still in the brainstorming phase, we believe this could attract many new users to the ecosystem. We will provide more details about its implementation in future updates.

Soul

As we near the launch of Soul Protocol, we're excited to provide a brief update. Future updates will be shared via Soul’s official channels.

The development of the Soul Protocol has been a year-long journey marked by intense effort across all fronts, culminating in significant progress. We're thrilled to announce the official release of the website and documentation on Friday, May 24th. Concurrently, we will launch Soul’s official communication channels to foster direct engagement with the community.

This milestone signifies the genesis of the Soul Protocol. We're eager to demonstrate its potential to become a leading DeFi project, thanks to its innovative design and business model. Soul will serve as key infrastructure for all lending protocols, aiming to create a more cohesive and synergistic lending environment, unifying billions in liquidity across the entire space.

The feedback from our network of partners has been overwhelmingly positive, underscoring the protocol's potential and the quality of our work. We're optimistic about a successful journey as we continue development and move toward future stages in the protocol's lifespan.

We're excited for the months ahead, poised for growth given the rapid pace of our progress. We will continue to push for innovation, ready to transform the entire ecosystem. Your support is invaluable, and we want to thank you for being a pivotal part of this journey!