What is Shield Protocol (SID) | What is Shield Protocol token | What is SID token
In this article, we’ll discuss information about the Shield Protocol project and SID token
Traditional assets face the problems of poor anti-censorship capabilities, high transaction costs, geographical restrictions and poor liquidity. It is quite difficult for the general public to invest in small amounts. Tokenized assets on the other hand can be divided infinitely, globally accessible, low-cost and readily available for transactions which gives them great potential to break these barriers with the help of blockchain technology. With this in mind, we present to you Shield protocol, a series of smart contracts that allow anyone to issue and trade tokenized assets. The price and state of the real-world assets are tracked and monitored by an oracle. A dynamic balance mechanism is implemented to enable minters and traders to obtain maximum benefits. In the meantime, the staking pools ensures the market price is stable and full of vitality. Shield protocol has the potential to enhance democracy and freedom by making tokenized assets accessible and available to anyone in the world.
Shield is a protocol that allows anyone to issue and trade synthetic assets that track the price of real world assets — everything from traditional equities to real estate. Shield unleashes the full power of asset tokenization to offer globally accessible, transparent and affordable access to financial assets.
How it Works
Shield’s unique sAsset minting mechanism can bring all financial assets on chain. Tokenized assets are transferable, storable and slicable which significantly lowers the barriers for participants.
- The collateral ratio of minting sAssets is at minimum 150% to ensure the stability of the ecosystem
- Track real asset prices by using the oracle mechanism to adjust prices through market behavior
- Minted sAssets with a collateral rate lower than the minimum will be liquidated to maintain market vitality
Basic Operations.
A synthetic asset issued on Shield is called an sAsset. For instance, a synthetic version of real-world asset Google would be called sGoogle. The following are the main operations enabled by the Shield Protocol:
• Mint: Anyone can mint an sAsset by locking up collateral, either in the form of a stablecoin(USDT), the platform token(SID) or a different sAsset. The required collateral is decided by the sAsset itself and is at least a minimum multiple of the asset’s value (the minimum is 150%). For instance, if stock Google is reported to be trading at $100, minting 1 sGoogle would require at least $150 in stablecoin or in a different sAsset.
• Closed Position: A closed sAsset will be destroyed and the original collateral will be released.
• Trade: sAssets can be traded through AMMs market where users could purchase and sell them easily.
• Liquidity: SID can be earned through providing liquidity.
• Lock: Earn high rewards in the prize pool through locking SID.
Shield Participants
• Minters: Minters are those who mint sAssets with USDT, SID or other sAssets. While minting, the value of the collateral must be higher than the minimum pledge ratio of the sAssets (set by the community). The referenced price in minting is provided by the oracle, so minters should operate flexibly according to the market conditions of the sAsset. As long as the pledge ratio is higher than the minimum limit, the collateral can be withdrawn. Minters can adjust the pledge ratio by burning sAssets or depositing more collateral.
• Traders: Traders are those who buy and sell sAssets over MDEX with USDT and benefit from it.
• Lockers: Lockers earn SID token rewards by locking LP tokens or SID tokens (through the community). LP token lockers get rewards through SID inflation, and SID lockers get rewards through minting fees. When users lock the SID tokens, they will be eligible to participate in community voting, and the voting shares will be calculated based on the the amount of locked SID tokens. Community voting is an essential way to get new sAssets on the platform and to change protocol parameters.
• Oracle: The oracle is a designated user, responsible for providing accurate and up-to-date price pushes for a specific sAssets, and is the only user who is allowed to update the sAssets. Because the oracle plays an important role in the market of sAssets, when the oracle is inaccurate, it will be quickly dismissed by the community.
Liquidity, Governance and the SID Token
The Shield protocol utilizes AMMs (automated market makers) to facilitate sAssets trading against stablecoins, eg. trading against an sTSLA/USDT pool on PancakeSwap. Minting and liquidity provision are essential services without which Shield protocol would not be able to function. It would therefore be natural to incentivize minting and liquidity provision, the Shield protocol rewards liquidity providers with:
• Trading Fees: All sAssets trades go through AMMs. Only a very small amount of commission is generated and collected by a third-party market.
• The Native Shield Token(SID): Shield defines a native token with a deterministic inflation schedule that rewards sAsset liquidity providers.
• Whitelisting Assets: Enabling/disabling assets that can be minted.
• Key Parameter Changes: Changing key protocol parameters such as the minimum collateral ratio and trading fees.
The Shield token is acting as both an incentive for liquidity providers and the primary governance vehicle. It can be used for collateral and to vote on key issues.
Oracle, Liquidation and Peg Incentives
A critical function of the Shield protocol is the ingestion of asset price data external to the blockchain. This is necessary for determining the amount of collateral required for minting an sAsset, and for assessing whether or not sufficient collateral is locked for existing sAssets. The protocol achieves this via an oracle mechanism. Shield token holders submit votes on each asset, which the protocol aggregates to compute a median weighted by each holder’s Shield token stake. The Shield oracle submits prices at a high frequency to accommodate real-time pricing of exchange-traded assets.
The Mirror oracle facilitates solvency of sAssets by triggering collateral liquidations whenever the collateral ratio of an sAsset (collateral value/asset value) drops below the governance-mandated minimum(150%). Other uses could auction the collateral at a discount until the collateral ratio reaches the minimum threshold.
In addition, the Shield protocol also encourages trades. If the price of an sAsset trades at a discount to the oracle price, users are incentivized to purchase and profit from the future rise of the price. Conversely, if the price of an sAsset trades at a premium to the oracle price, market participants are incentivized to mint and sell it at the premium price, thereby profiting from the difference. In both cases, a drift of the sAsset’s price away from the price of the real-world asset creates arbitrage that market participants will exploit until the peg is restored.
Incentives for Locking
Half of the SID obtained by liquidity providers will go into the lock pool of the week when claimed. Users could lock the SID they hold and earn the big prize of the lock pool. The locked period lasts for 13 weeks and all SID in the pool will be released afterwards. Through this mechanism, Shield could maintain the circulating amount of SID and ensure the benefits of liquidity providers and the stability and health of Shield ecosystem.
Shield is not a project but more of a movement, a wave, a trend that leads the future!
Roadmap
How and Where to Buy SID token?
SID token is now live on the Binance mainnet. The token address for SID is 0x9DadF352E3F997616F2562dd4Af246c971f6cb67. Be cautious not to purchase any other token with a smart contract different from this one (as this can be easily faked). We strongly advise to be vigilant and stay safe throughout the launch. Don’t let the excitement get the best of you.
Just be sure you have enough BNB in your wallet to cover the transaction fees.
Join To Get BNB (Binance Coin)! ☞ CLICK HERE
You will have to first buy one of the major cryptocurrencies, usually either Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Binance (BNB)…
We will use Binance Exchange here as it is one of the largest crypto exchanges that accept fiat deposits.
Once you finished the KYC process. You will be asked to add a payment method. Here you can either choose to provide a credit/debit card or use a bank transfer, and buy one of the major cryptocurrencies, usually either Bitcoin (BTC), Ethereum (ETH), Tether (USDT), Binance (BNB)…
Step by Step Guide : What is Binance | How to Create an account on Binance (Updated 2021)
Next step
You need a wallet address to Connect to Pancakeswap Decentralized Exchange, we use Metamask wallet
If you don’t have a Metamask wallet, read this article and follow the steps
☞What is Metamask wallet | How to Create a wallet and Use
Transfer $BNB to your new Metamask wallet from your existing wallet
Next step
Connect Metamask Wallet to Pancakeswap Decentralized Exchange and Buy, Swap SID token
Contract: 0x9DadF352E3F997616F2562dd4Af246c971f6cb67
Read more: What is Pancakeswap | Beginner’s Guide on How to Use Pancakeswap
The top exchange for trading in SID token is currently Pancakeswap v2
Find more information SID
☞ Website ☞ Website 2 ☞ Whitepaper ☞ Source Code ☞ Social Channel ☞ Social Channel 2 ☞ Message Board ☞ Coinmarketcap
🔺DISCLAIMER: The Information in the post isn’t financial advice, is intended FOR GENERAL INFORMATION PURPOSES ONLY. Trading Cryptocurrency is VERY risky. Make sure you understand these risks and that you are responsible for what you do with your money.
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