DeFi Project Mercurial Plots Revamp and New Tokens Following 'Toxic' Association With FTX

Mercurial would launch some of its popular products as a separate project under the name Meteora.

AccessTimeIconDec 7, 2022 at 10:39 a.m. UTC
Updated Dec 7, 2022 at 4:20 p.m. UTC
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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.

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Mercurial, a decentralized finance (DeFi) platform that allows users to lend and borrow stablecoins on the Solana blockchain, is revamping its brand, community and token distribution, as per a Wednesday post.

The revamp plan, which being called the Meteora plan, was formulated in response to recent events, including a collaboration with crypto exchange FTX and its closely related trading firm Alameda, which has left a "toxic association" among the three entities.

The firm set up a new token and will migrate current MER holders to the new setup. It is also setting up a decentralized autonomous organization (DAO) to give the community more leverage over essential decisions. Mercurial holds over $27 million across two products, DeFiLlama data shows, and held over $200 million at lifetime peaks.

The plan will see Mercurial launch its lending vaults and automated market maker (AMM) pools as a separate project under the name Meteora. An AMM refers to decentralized exchanges that rely on smart contracts to source liquidity from users and price the assets within the pool using algorithms.

Mercurial said funds raised from the initial exchange listing (IEO) for its native MER tokens on FTX represented over 10% of the total funds raised for the project.

Alameda’s involvement in MER was in the form of 3% of liquid MER for market making that was bought at private round prices of 7 cents. An 1.5% of locked MER for seed investment was bought at a seed price of 2 cents, Mercurial said.

“In summary, the only liquid tokens in the market came from Alameda Market Making (3%), IEO/IDO participants (0.3%), private investors (1.6%) and the liquidity mining rewards for our stable pools,” the team stated. This created constant sell-side liquidity for MER tokens on the open market, which is now deemed detrimental given the troubles at Alameda and FTX.

“There still needed to be more clarity and certainty over MER’s tokenomics. The uncertainty is further exacerbated by the exploit on FTX, resulting in over [$800,000] worth of MER tokens in the hacker’s wallet,” the team added.


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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.


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Shaurya is an analyst/editor for CoinDesk's markets team in Asia.