Development Blog
Check the development blog to get insights
into the growth process of MVL

Development Blog

Check the development blog to get

insights into the growth process of MVL

Blockchain[MVL 2.0 Concept Paper] 2. DeFi : Support Nation's Environmental Policies

15 Nov 2021

Last week (Nov 12), the theme of the MVL 2.0 Concept Paper was unveiled for the first time. The first concept was “MVLer and Wallet.” Through this concept, MVL introduced the missions and solutions to be carried out.

๐Ÿ‘‰ MVL 2.0 “ Wallet : Allow MVLers to Engage More in MVL Ecosystem”  

Through this blog, MVL expressed the ambition to establish an appropriate compensation system for "mobility users" who use MVL's mobility platform and "MVL holders" who hold MVL tokens.

And now, we would like to introduce the second theme of the Concept Paper, “Defi and Supporting Environmental Policies.” 

DeFi : Support Nation's Environmental Policies

“How does DeFi connect to eco-friendly policies?”

“How does DeFi relate to additional compensation policies for holders?”

Perhaps some of you had these questions as soon as you saw the theme of "DeFi : Support Nation's Environmental Policies.” Before we give you an answer, we would like to go through the definition of DeFi.

DeFi (Decentralized Finance) is a decentralized financial system, which is a blockchain protocol that can provide financial services such as deposits, loans, and currency exchange without a centralized institution. Still, most DeFi services are only used as speculation in the crypto market, but if their value can be linked to the real economy, they will have explosive power.

For example, the value of DeFi becomes even greater if the huge amount of money concentrated on DeFi is provided to real-world projects and the value is redistributed to DeFi participants. Let's take a closer look at the example in this part, citing the case of MVL and TADA.

MVL currently operates ‘TADA,' a ‘blockchain mobility service' that mainly operates in Southeast Asia such as Singapore, Cambodia, and Vietnam. The TADA services include ride-hailing, delivery, and logistics. Since the MVL ecosystem is centered in Southeast Asia, the service environment and infrastructure in Southeast Asia are very important factors that can directly affect both MVL's overall mobility business and ecosystem development.

These mobility infrastructures are closely linked to the livelihoods of TADA drivers, the largest partner in the MVL ecosystem. Producing ONiON T1, Cambodia's first electric three-wheeler is to help TADA drivers provide excellent services in a better working environment, as well as to provide them with a better profit model. Operating T1 is more eco-friendly and can provide a happier experience for both passengers and drivers than operating old three-wheelers* full of smoke.

*The main transportation and delivery systems in Southeast Asia are tuk-tuks and motorcycles. However, most tuk-tuks and motorcycles are made by importing old used motorcycles from overseas and remodeling them. One of the problems with such modified vehicles is that they produce a lot of smoke.

โ–ณ The road full of four-wheelers, three-wheelers, and two-wheelers in Cambodia

However, a fatal problem arises since most people cannot pay all in cash when they purchase cars. Most people usually take loans, such as credit cards or auto loans, when purchasing vehicles. Cambodia, MVL’s main business stage, has not yet advanced its personal credit evaluation standards like South Korea, so drivers' loan interest is quite high.

For example, if a local driver purchases a vehicle, the loan interest from the bank is issued at about 15% (the real interest rate is 30% if additional admin fees are included), which makes it more difficult to purchase a vehicle or raise living funds through loans than in South Korea.

This is why DeFi can play a big role in MVL projects for successful EV sales and local retention. With DeFi, EVs can be distributed more effectively and quickly with better conditions than local banks, and the MVL ecosystem will expand rapidly and widely.

DeFi: Financial products for all participants in the ecosystem

MVL DeFi is based on a ‘Landing Pool' where deposits and loans occur the same as a bank. Here, MVL is planning a model that allows some of the interest accrued on deposits & loans to be accumulated in the ‘Project Financing Pool,' and the funds accumulated in the Project Financing Pool are to be loaned by Governance so they can be used in the real economy.

In other words, DeFi users can use cryptocurrency deposits & loans services and supply funds to the real economy through the Project Financing Pool.

The first case (Use-Case) of DeFi project financing is scheduled for the sale of Cambodian EVs. If we proceed with large-scale projects such as road and power plant construction from the beginning, it will be difficult to get Governance approval, so we decided that the EV loan was appropriate for the first case.

And let's find out the main schemes of how the MVL DeFi project financing takes place.

1. For the rapid spread of ‘EV' in the MVL ecosystem, Cambodian drivers must be able to purchase it easily. However, if Cambodian drivers make loans from the bank and purchase EVs, the average interest will be around 15%. (the real interest rate will be 30% if additional fees are included)

2. For DeFi users in developed countries with a loan rate of 3%, it can be an attractive investment condition even if only 10% of profits return stably.

3. MVL Cambodia's TADA team proposes a project called "EV purchase and rental" to MVL DeFi Governance, and after the Governance is approved, the MVL TADA team will lend funds to the Project Financing Pool. Then, use these funds to proceed with the "EV purchase and rental" project.

4. Cambodia's TADA team accumulates the remaining profits in the project pool, except for some of the profits from the project implementation. This will be delivered to the Governance Token, or the MVLers holding the MVL Token.

5. This virtuous cycle loan system further promotes T1 sales and creates synergy with transportation infrastructure such as ONiON stations, which can rapidly build eco-friendly transportation infrastructure in Southeast Asia.

If MVL DeFi is established in this way, EV sales in Cambodia will be the first case (Use-Case) to link the real economy and the cryptocurrency economy, and it will be able to support the businesses of various partners, including the businesses in the MVL ecosystem.

In particular, many investors in developed countries want to invest in high-interest products in Southeast Asia, but it is a fact that it is difficult to proceed with investments due to risks such as creating and managing local accounts and distrust of local companies. The MVL team minimizes risks through blockchain-based decentralized financial service planning where real assets are secured as described above. At the same time, the MVL team built the model to be the basis for driving eco-friendly policies in Southeast Asia and built an eco-friendly mobility infrastructure with the De-Fi system in Cambodia.

The MVL DeFi project creates a connection between excellent companies and DeFi Governance, which initially carries out small projects such as EV Loans, gives them confidence in Governance, and gradually creates a structure to proceed with larger projects.

First, the PF (Project Financing) pool, a channel to fund real-world projects, is composed of collecting fees rather than using the deposits of DeFi investors. In other words, the MVL team will entrust the portion allocated to the team's sales, such as DeFi operation and maintenance fees, to the Governance to connect and support the real business and obtain the same profit as Governance. In the long term, as DeFi-based real business PF is activated and the need for expanding the PF pool increases, we will decide whether to expand the PF pool under the agreement of Governance.

In addition, the general PF business structure has a 1: 1 project-funding structure, so if one project fails, investors will receive damage. However, MVL's DeFi is a PF pool-used many-to-many structure that minimizes the risk of project failure.

Also, by configuring the interest pool separately, the disadvantages of the real business PF, which takes 1~10 years to generate actual profits, have been improved. This means, it is a structure that constitutes an interest pool in which the profits of various projects such as short-term, mid-term, and long-term are collected in one place, and the Governance holders receive profits at the time they desire.

In other words, the deposit and loan fees of unspecified DeFi users will be partially in the project Pool, and the profits of the project utilizing the funds collected here will be into a separate interest pool. The profit will be shared by the DeFi Governance token or Staking format by the existing MVL Token Holder. Therefore, a strategy to hold Governance tokens will also be available to earn high interest in long-term projects.

The MVL's DeFi project is currently undergoing internal testing, and the details will be available early next year.

Please look forward to the official launch of the DeFi service, which can make a significant contribution to the MVL ecosystem and earn high-interest rates. The MVL team will put best efforts to launch a successful DeFi project.

In addition, there is one more ONiON business strategy of the MVL team besides the DeFi policy mentioned above. It is ONiON sales promotion by ‘NFT.’

The MVL team plans to promote EV sales and build eco-friendly infrastructure through NFT.

The detailed ONiON business strategy will be released in the “NFT” section of the next Concept Paper, so stay tuned!

We will be back with the next episode.

Thank you.

Trust Driven,