A First In DeFi: Benchmark Protocol Launches MARK Token, An Elastic Collateral, Hedging Device

Blockchain alone, as well as bitcoin, lacks a utility component.

That’s according to David Mass, the Inventor of Benchmark Protocol, an uncorrelated, liquid, collateral utility. After a career focusing on blockchain application at institutional banking and consultancy firms, Mass leveraged his knowledge in investment management and derivative products to create a bridge, driven by stock market volatility data, connecting traditional finance to cryptocurrency markets.

In the simplest way, through the MARK token, a cryptocurrency listed on the ERC-20 ethereum-based blockchain, Benchmark Protocol provides market participants the first cryptocurrency hedge utilizing the Cboe Volatility Index (VIX), the world’s premier gauge of U.S. equity market volatility. The Protocol works off the notion that volatility, across digital and traditional assets, is correlated. Using VIX as a catalyst, Benchmark augments the total supply of tokens in its ecosystem.

“Benchmark Protocol is a supply elastic collateral and hedging device,” Mass said. “The two main imports, from a data perspective, are the CBOE Volatility Index and the SDR, which is the Special Drawing Rights produced by the IMF -- it’s arguably the most stable reserve currency in the world.”

Unlike legacy monetary controls which fail in their ability to effectively provide liquidity in periods of stress, when volatility rises, the supply of MARK token automatically increases. Therefore, during a shocking event, MARK retains its store of value -- a first in the decentralized finance (DeFi) space.

“On a daily basis, once we start actually importing this data, we could remove or add tokens to the total circulating supply; it’s really interesting because we’re doing this conforming to capital markets, and there’s not really any other cryptocurrency that does that.”

In The Hot Zone: Benchmark Protocol’s MARK token was launched nearly a month ago, and the firm is in a marketing and exposure phase.

“Our TVL, which is Total Value Locked, jumped through the roof within the first 48 to 72 hours, or so, after we launched,” Mass said. “We had about $32 million of interest through different liquidity pools.”

In terms of roadmap, Benchmark honed in on scalability and validation.

“We’re in that hot zone right now,” Mass said in reference to the firm’s involvement in the DeFi space. “One of the biggest hurdles, in terms of blockchain scalability, is interoperability and really just pegging.”

Adding, the firm is bolstering security through smart contract audits conducted by CertiK, one of the top auditors in the space: “We’re going to continue to invest money into security because we want to protect the people that are backing MARK.”

Innovation Outlook: As the total AUM of the cryptocurrency market rises, primarily due to the drive for yield outside of bonds, Benchmark Protocol is determined to lead innovation in the space, equipping market participants with a new product that retains its store of value in periods of stress, and is not prone to inflation.

“Right now, we’re in a farming stage. The true utility is actually going to come to fruition in Phase II, where we will start importing the data from the CBOE Volatility Index.”

Mass noted that there’s a lot of inflation in the MARK token right now, primarily due to the Benchmark’s liquidity initiatives. In two weeks, however, the protocol will begin rebalancing at the closure of the New York Stock Exchange floor, daily.

“We wait for settlement of the CBOE VIX. That happens at 4:15 PM Eastern Standard Time, Monday through Friday,” Mass added.

Going forward, the self-funded firm will broaden its international presence, as well as launch various incentive programs that reward liquidity providers with MARK tokens.

“We’re trying to be robust in certain ways, and leverage partners that could provide higher clips of efficiency, by feeding through more transactions on the blockchain-per-second,” he said. “We’re wrapping up our first liquidity mining program this month; 9% of the entire network is up for grabs right now, and we’ll have another 27%. Then, the collateralization piece is also going to launch in the second half of 2021. That’s really our true bread and butter. That’s going to give us utility.”