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September 4, 2020

Minter Vault 101

Everything you need to know about Minter Global’s latest service in plain English. What is Vault? Who’s its target audience? And how can you make use of it?

In short, Minter Vault is a safe that users put their BIP coins into, while Minter Global manages them on the most favorable terms applying the most efficient staking practices.

Minter Global OÜ is a licensed crypto broker, a European company registered in Estonia.

In other words, this is Minter Global’s trusted BIP custody and delegation service. Once BIPs have been transferred into the Vault, you will start receiving first-class treatment as deposited coins will have been delegated to the best validators carefully selected by the firm.

The custody itself is a MultiSig address managed by four addresses with the same weight, requiring a minimum of three signatures for a transaction to be confirmed.

For Whom?

The service is currently provided only to the clients of Minter Global OÜ who don’t want to:

  • research validators on their own
  • negotiate special terms and conditions a large stake could get them
  • double-check safety of their seed phrase
  • ensure that re-delegation is optimized
  • be bothered with uptimes and fines

Promo

Minter Vault is the most safeguarded place to store BIPs and get the maximum out of the Minter Network.

  • State-of-the-art multi-signature addresses
  • Managed by professionals
  • Hand-picked, time-tested validators
  • The most attractive terms in the market
  • No such thing as unbond period
  • Interconnection with the Ethereum network and Ethereum-powered projects

The MVT Token

MVT (Minter Vault Token) is an ERC-20 Ethereum token provided as a receipt that proves the amount deposited into the Vault. You can hold the MVT tokens in your preferred secure storage and transfer them freely between your addresses. Once you need BIPs, you can provide Minter Global with MVTs and receive the deposited coins plus the block rewards minus the company's fees that are limited to a small percentage of the block rewards.

Initially, the ratio was 1:1. Since the amount of BIP in the Vault is constantly rising due to the delegation mechanics and accumulation of the block rewards while the number of issued MVT tokens may remain constant (increasing only if there's a new BIP deposit), the ratio is subject to change. This means that the number of BIPs that can be bought for 1 MVT may or may not increase as well.

The formula is pretty simple:

RR = Total_BIP_Vault / Total_MVT_supply
  • RR (Redemption Ratio). MVT-to-BIP exchange rate
  • Total_BIP_Vault. The number of BIPs currently stored in the Vault (link)
  • Total_MVT_supply. The number of MVTs ever issued (link)

When you deposit BIP or request a withdrawal, you will receive or would have to provide an amount of MVT as calculated based on the current redemption rate. In the next 12 months, we may or may not expect an up to 100-percent increase of the redemption rate due to the network's rewards and compound percentage of re-delegation.

How to Purchase MVT

MVTs are not offered for sale by Minter Global but provided in exchange for delegated BIPs. As for BIP, you can purchase it with major crypto or fiat currencies (see here). Holders of MVT tokens are free to use them as they wish.

If you want to buy MVT, you may go to Uniswap and choose the available pair, which in our case is MTV/USDT:

Find the "Trade" button at the top of the page:

  1. Sign in via one of the suggested methods (for example, MetaMask)
  2. Top up your Ethereum wallet in advance with the required amount of USDT (don't forget about gas)
  3. Select direction, MTV -> USDT or USDT -> MVT, and enter the required amount
  4. Click "Approve" and confirm the operation in your wallet
  5. Press "Swap" to complete

What are the indicators below?

  • Minimum Received. The amount you're guaranteed to get (at the current rate)
  • Price Impact. Shows how the price will change once the transaction is made
  • Liquidity Provider Fee. The commission to be charged

The price is determined by the market, and one could expect that block rewards, reliability, freedom of transfers (no need to unbond), exchangeability (many options on the Ethereum network), multi-wallet support, etc. may also influence it.

Liquidity

By providing liquidity to the MVT/USDT pool, you can get part of the commissions that the smart contract allocates to the pool, namely .3% on each transaction.

How to Provide Liquidity

First, go to the MVT/USDT page and click on the "+ Add Liquidity" button:

  1. Once on Uniswap, sign in with your wallet as shown in the example above
  2. Make sure you have the required amount of both MVT and USDT tokens (when providing liquidity, you lock both)
  3. Enter the required number of tokens
  4. Confirm the operation by clicking "Approve"
  5. Supply your tokens to the pool by pressing "Supply"

The percentage of your participation in the pool is displayed above the "Share of Pool" label. Now, every time someone trades an MVT token in this pool, you will receive your share of the commission spent by another user.

Frequently Asked Questions

Answers to the popular questions from Minter Global CEO Dan Reitman.

If I buy MVT on Uniswap and hold in ETH wallet, for instance, will BIP be automatically delegated for me in the Vault, too? And can I use MVT to exchange for BIP in the future?

You must understand that once BIP tokens are put into the Vault, they are delegated and stay this way throughout the whole time they are stored there, regardless of who is the current holder of MVT. It means that if you get MVT from Uniswap, someone has put BIP tokens into the Vault, got their MVTs, and added them to Uniswap. MVTs are only created when a deposit is made into the Vault, meaning it doesn’t really matter how exactly you got your MVT tokens. If they were issued at all, there are delegated BIP tokens in the Vault corresponding to the MVT tokens.

Will I be able to get a certificate that I have funds in the Vault to get a loan from a European bank?

We are currently working on a legal framework that would allow us to issue such a certificate. You should understand, however, that the decision about whether or not to accept this certificate is ultimately made by the bank. I believe that if you have a specific bank on your mind where you intend to take out a loan, it would be better to discuss it with them directly.

What will happen to MVTs that users redeem for BIP? Will they be burned?

The MVTs sent to Minter Global to redeem stored BIP tokens will be either burned or offered to the new clients. There’s no much difference between these options, the main thing is that MVTs that return to Minter Global will not re-enter circulation unless a new deposit in BIPs is made.

What practical application does MVT have? Are there any examples of using this token?

The core application of MVTs is to serve as a receipt token, or the proof that you have a certain number of BIP tokens stored in the Vault. Since MVT is an ERC-20 token, it will be easier to introduce it into custody solutions provided by major institutions, and that, in turn, will make it potentially useful as a collateral for loans and similar things.

If I hold 500k MVT bought from Minter Global and decide to sell out 250k MVT, how can the other person redeem for BIP in the future?

They will need to pass the KYC/AML checks, and after that, request to redeem the respective amount of BIP.

How can I get the MVT tokens? What are the advantages of holding them?

To get MVTs at this point, you need to purchase a large amount of BIP from Minter Global and choose the deferred delivery option. The purchased BIPs will be moved to the Vault, and you will get a respective amount of MVT as a proof that we are holding BIPs for you. In the near future, we plan to open the Vault to the public so that everyone could deposit their own BIPs. As for the advantages of holding, you can redeem your BIP tokens at any time without having to worry about the delegation of your BIP tokens while they are stored in the Vault.

Is there a supply limit to MVT?

The redemption rate that determines how many MVTs are issued for each BIP deposited is calculated by dividing the total number of BIPs in the Vault by the total number of MVTs issued. It means that there is a limit to the MVTs simply because there is a supply limit for BIP tokens, and once all of them are stored in the Vault, no new MVTs could be issued.

What's the minimum deposit amount? What is the fee structure?

At the moment, the minimum amount is 10,000,000 BIP tokens. Due to the KYC/AML risks, at this moment, we only accept deposits in BIPs that have been purchased through Minter Global. As for the fees, we will take a small percentage from the block rewards generated by BIPs in the Vault. It is negotiated with each client individually and depends on the volume of participation; however, it will never exceed 10% and can go all the way down to 0 in some cases.

Could it be that the MVT rate in USD will be significantly higher than the BIP rate, making it unprofitable to exchange MVT for BIP through Minter Global?

While I believe this to be possible in principle, I doubt it. Secondary markets move in mysterious ways, but MVTs are mostly intended not as an asset to be traded, but as a receipt proving ownership of BIP coins in the Vault. So yeah, I can imagine a scenario where a strong secondary market emerges and the price increases independently from that of BIP, but I would be surprised to actually see that.

Irrespective of where MVT has been gotten and how long it's been held, when it's time to redeem, will all the delegation rewards from the initial issue of MVT be included?

When you redeem your BIP tokens from the Vault, in addition to the initial deposit, you will receive your share of block rewards generated by the amount of BIP since the moment it was deposited. You will also be able to calculate the amount of BIP you can redeem simply by multiplying the number of MVTs you hold by the current RR.

The Ethereum blockchain has many scalability issues . . . Why did you still choose it over other, more scalable platforms?

We do not expect MVTs to move a lot, they are a sort of receipt after all. One of the roles we have envisioned for them is to be used as a collateral when dealing with larger financial institutions, and since Ethereum seems to be the most widely adopted technology by the major players, we expect financial institutions to be more comfortable taking in ERC-20 tokens rather than developing the custody system for BIP from scratch.

What is the process of redeeming MVT for BIP from the Vault?

While these features are still under development (one of the reasons we are restricting access to the Vault at the moment), the redemption process is rather straightforward. If you have purchased BIPs from Minter Global, you can request redemption from your dashboard. Besides, several teams are preparing one-click BIP<->MVT exchange products.

How do I check the MVT/BIP rate?

A special page will soon be launched on minter.global. Until then, you can simply divide the number of delegated BIPs by the number of MVTs in a smart contract.

Summary

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September 4, 2020, 21:25
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