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Multi Explained

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What is Multi?

Multi is a new type of currency token backed by a basket of assets. What makes it unique is its adaptive asset backing. The community actively shapes and improves this backing over time via a performance-based system (the Foresight Protocol). Participants stake capital, putting 'skin in the game' behind the portfolio adjustments they propose. Positive long-term outcomes are rewarded, while bad decisions are penalized.

Alongside its adaptive backing, Multi is also designed for highly efficient trading. It connects to an Automated Liquidity Orderbook DEX. When users trade, the system adds liquidity using the asset reserve or Multi tokens it mints on-demand, feeding directly into the order book. This hybrid approach combines benefits of both AMMs and traditional order books, creating deeper order books with better execution prices.

How Multi Works

Multi has two key parts that make it unique:

1. Asset Performance Competitions

This system decides what assets back the Multi token. Participants compete by staking on portfolio ideas. The system rewards strategies that actually perform well over time. Think of it like a competition to build the best backing portfolio.

2. Automated Liquidity Orderbook DEX

This DEX is a new kind of order book. A liquidity provisioning algorithm runs in the background, using Multi's reserve assets to automatically add liquidity.

Learn more about how these parts work in the sections below.

Performance Competitions

You can participate in regular competitions to shape Multi's asset backing. During each submission window, participants propose changes and commit stakes. Once closed, the system implements these changes proportionally to stake size. Throughout the evaluation period, performance is tracked as stakes gradually unlock. If your strategy performs well, you'll receive your stake back plus rewards from underperforming participants and the system. If your strategy underperforms, your unlocked stake transfers to successful participants or the system.

  • Propose changes & commit stake during each submission window.
  • Changes are implemented based on stake proportion after the window closes.
  • Your stake size directly influences your proposal's impact.
  • Performance over time determines if your stake returns with gains or is redistributed.
Reserve composition being shaped through competition

Proof of Improvement

How does Multi self-improve? The system sets a performance benchmark based on its current asset mix. Participants whose strategies outperform this benchmark trigger the creation of new Multi supply as rewards. However, strategies that underperform the benchmark lead to Multi supply being burned. This "Proof of Improvement" mechanism ensures the system rewards demonstrated success and penalizes poor performance through supply adjustments.

Self-improvement mechanism illustration

Automated Liquidity DEX

Think of this DEX like a smart routing system combined with an order book. Before placing your order directly, the system checks if using Multi's unique ability to mint or redeem itself against any of its backing assets can instantly get you a better price. If this smart route involving mint/redeem is best, it's executed atomically; otherwise, your order interacts normally with the order book.

  • Place your trade order.
  • System searches for the best execution route.
  • Optimal route may trigger Multi mint/redeem.
  • Trade executes via the best route found (smart route or order book).
Scale illustrating balance and efficient trading

Multi is backed by a precise ratio of different reserve assets, reflecting its current value.

Set of starting backing tokens representing the defined ratio

The DEX algorithm identifies an opportunity to bundle trades across multiple assets.

Arrows indicating potential multilateral trade opportunity

The reserve grows uniformly without risk to existing Multi holders, as the same proportions are kept.

Backing tokens reflecting the precise ratio after atomic trade

Ecosystem & Growth

Multi is designed to grow beyond a single token. The vision is an adaptable ecosystem where Multi can integrate with various blockchains (using technologies like ICP's Chain Fusion) and expand its backing to include diverse assets, such as Real-World Assets (RWAs). This allows for the creation of specialized Multi variants tailored to specific markets or strategies.

  • Integrate seamlessly with multiple blockchains via Chain Fusion.
  • Expand backing to include diverse assets like RWAs.
  • Enable specialized Multi variants for targeted strategies.
  • Connect different token economies more efficiently.
  • Build a flexible foundation for future digital currencies.
Tree structure illustrating Multi ecosystem potential