Midas Dollar Peg Lost

Notice: This page is a freshly imported case study from the original repository. The original content was in a different format, and may not have relevant information for all sections. Please help restructure the content by moving information from the 'About' and 'General Prevention' sections to other sections, and add any missing information or sources you can find. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.

Notice: This page contains sources which are not attributed to any text. The unattributed sources follow the initial description. Please assist by visiting each source, reviewing the content, and placing that reference next to any text it can be used to support. Feel free to add any information that you come across which isn't present already. Sources which don't contain any relevant information can be removed. Broken links can be replaced with versions from the Internet Archive. See General Tutorial on Wikis, Anatomy of a Case Study, and/or Citing Your Sources Guide for additional information. Thanks for your help!

Midas Dollar

Midas Dollar was an algorithmic stablecoin which is designed to adjust the supply dynamically to maintain a price peg of $1. While a key part of the pitch was that the team was not anonymous, there were limited details available about who was behind the token. After many months of trading far above the peg, the coin appears to have lost it's peg between April 16th, 2021 and April 19th, 2021 and never recovered. Following that point, the treasury was subsequently depleted in the Value DeFi hack on May 16th, 2021. A new Midas V2 coin was launched and migration was open for several months, although at least 1.7m tokens never completed the migration. The present price of the Midas Dollar stablecoin is below $0.03.

The new Midas Dollar V2 coin does not appear to be monitored on most websites such as CoinMarketCap, DigitalCoinPrice, Messari, or Crypto.com, and presently has an even lower market value according to DexScreener. No updates appeared on the team's Medium account since July 12th, and it appears to be subsequently deleted.

This is a global/international case not involving a specific country.

About Midas Dollar

"Decentralized Stablecoin with an Algorithmic Central Bank. Established team, non-anonymous. Ready & real use-cases for $MDO algo stablecoin with Midas.eco."

"Midas Dollar Protocol is designed by the Midas Protocol team as the algorithmic stablecoin on Binance Smart Chain. Midas Dollar is an innovative solution that can adjust its supply deterministically to move the price of the token in the direction of a target price to bring programmability and interoperability to DeFi."

"Our Vision: To be one of the most completed, most profitable, billion $ marketcap blockchain technology companies in the world. Our Mission: To contribute to global adoption of blockchain technology by offering the most completed range of blockchain products and services for both corporate clients and global consumers. Values: Value creation through applications-focused innovation and customer-oriented creativity. Focus on building human capital and nuture innovative, empowering and inclusive working environment. Always reaching out to build highly creative partnerships for mutual benefits in order to invent and address to new demands/needs for and from the market. Being adoptable, flexible to navigate through everchanging technology landscape."

"Midas Dollar is an innovative solution that can adjust its supply deterministically to move the price of the token in the direction of a target price to bring programmability and interoperability to DeFi. One of the biggest issues of all current algorithmic stablecoins right now is utility. We are glad that MDO has use-cases right away."

"Inspired by Basis and its predecessors (Empty Set Dollar and bDollar), Midas Dollar is a multi-token protocol that consists of three tokens: MDO (the algorithmic stablecoin), Midas Dollar Shares (or MDS, which holders can claim MDO inflation when the network expands), and Midas Dollar Bonds (or MDB, which can be purchased at 1:1 rate when the network is in contraction and can be redeemed with premium for MDO the network returns to its inflationary state, above the $1 peg)."

"When MDO price is below the target price of $1, token holders can purchase Midas Dollar Bonds (MDB) by burning MDO to reduce the circulating supply with a 1:1 ratio, and Bonds will be burnt when users redeem MDO with a premium bonus. In case of redemption, an amount of MDO will be minted according to the TWAP at the beginning of the epoch (for example, if the MDO price is $1.1 then one Bond burnt will get back 1.1 MDO). Important to note is that Bonds have no expiry after purchase."

"When MDO price is above the 1$ peg, the token supply will have to expand to push it back down to 1$ and the contract will allow the redemption of the MDB. When the price of MDO continues trading above the $1 target price after bond redemption, the contract mints an appropriate amount of new MDO. This will be distributed to the Boardroom Stakers. This three token system creates incentives through seigniorage, always pushing MDO towards its peg. MDS is used to redistribute the seigniorage from inflating the asset, while MDB is used to establish a price floor while MDO is in its deflationary state."

"Midas Dollar is the latest product of the Midas Protocol ecosystem as we are strong supporters of algorithmic stablecoins in particular and DeFi in general. However, MDO is an experiment, and participants should take great caution and learn more about the seigniorage concept and supply expansion and contraction mechanism to avoid any potential loss."

The Midas Dollar peg appears to have been lost at some point between April 16th and 19th, 2021. The team announced on Twitter on April 19th, 2021: "We are stronger when we #BUIDL together! Join the #BSC #BUIDL movement and stand a chance to win $15 USD for 10 random winners."

"We loved the project, but we yield miners got crushed with $MDS price came down from ATH of $20K to $6000, and now below $2000, what you guys did is just kicked us out of chat rooms and discord, can't standing up to disappoinment and frustrations!! it's sad."

"As you may already know, the exploitation of Value Defi has affected both MDG and MDO [as of May 16th, 2021]." "We’ve lost about 41430 MDG, 67330 BUSD and 130 BNB. Most of the lost tokens are located in 3 liquidity pools WBNBMDG, MDGBUSD and bCashBUSD."

"IMPORTANT! Migrate your $MDO to $MDOv2 before Jul 13, 20:00 GMT+6." "We realized that there still are a large sum of MDOs not yet migrated to the MDOv2 version. Until the migration completes, we cannot proceed to upgrade the Midas Dollar protocol to a partial collateralization model."

"As previous announcement, the final deadline for MDO to MDOv2 migration is Jul 13, 20:00 GMT+6. Once the migration period is over, we will close the migration gateway — which means it is impossible to convert from MDO to MDOv2."

"Midas Dollar’s upcoming plans and programs will use MDOv2 instead. Hence MDO tokens will no longer be valued in the future. We estimate there are still almost 2 million MDO unmigrated left."

"Midas Dollar’s price [as of November 4th, 2022] is US$0.02252." "The live price of Midas Dollar is $0.0225236 per (MDO / USD)" as of November 8th, 2022.

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Midas Dollar Peg Lost

Date	Event	Description
April 19th, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $1,733,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

The total amount recovered is unknown.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Midas Dollar failed to back their token with sufficient collateral or insurance.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.