Liquidity Reserve: Ensuring Stability

At MEDRE, we prioritize the stability and liquidity of our token. To achieve this, we maintain a robust reserve that guarantees a minimum of 10% of the total value of our underlying real estate assets is held in stablecoins. This reserve serves several crucial purposes:

1. Enhanced Liquidity

By having a significant portion of the asset value backed by stablecoins, we mitigate the impact of potential volatility in the real estate market on the MEDRE token. This helps maintain a more stable token price and reduces risks for investors.

2. Investor Protection

• Safeguarding Value: The reserve acts as a buffer to protect investors’ interests. In the event of unforeseen circumstances or market downturns, the stablecoin reserve helps to stabilize the token’s value and mitigate the impact of negative market sentiment. This helps to prevent a sharp decline in the token’s price and provides a degree of protection for investors.
• Transparency and Trust: Maintaining a transparent reserve policy builds trust with investors. We are committed to regularly disclosing the reserve holdings and providing clear information about how it is managed.

3. Reserve Management and Deployment

The stablecoin reserve is subject to the following management and deployment strategies to ensure its security, transparency, and efficiency:  

• Secure Custody: The stablecoin reserve is held in secure custody with reputable and regulated custodians to minimize counterparty risk.
• Regular Audits: We conduct regular audits of the reserve to ensure transparency and verify that it meets the minimum 10% requirement. To provide further transparency, when stablecoins are purchased for the reserve, we will publish the wallet address, allowing for a live audit of the reserve holdings.  
• Proactive Monitoring and Adjustment: The reserve is actively monitored, and adjustments are made at least annually to reflect changes in the value of the underlying real estate assets. More frequent adjustments will be made if necessary to ensure the reserve remains proportionate to the overall value of the portfolio.  
• Addressing Market Conditions: The reserve provides MEDRE with the flexibility to respond to unexpected market fluctuations or events that may impact the value of the underlying assets, ensuring the long-term stability of the MEDRE token.  
• Managing Token Supply: In the future, MEDRE may consider using a portion of the reserve to manage the token supply through buybacks or burning mechanisms, which could help stabilize the token’s price and benefit token holders.  
• Active Deployment Strategies: To further enhance the utility of the reserve, MEDRE will actively deploy a portion of the reserve funds in reputable lending and/or staking protocols. This will allow the reserve to generate additional yield, further strengthening its ability to support the MEDRE token and potentially provide benefits to token holders. It’s important to note that generating a 10% interest rate through these lending and staking activities is not unheard of, especially in the current DeFi landscape, where various protocols offer competitive yields. This potential additional income stream can be strategically used to:
  • Token Buybacks and Burns: Periodically buy back MEDRE tokens from the market and remove them from circulation, potentially increasing the value of remaining tokens.  
  • Dividend Distribution: Distribute a portion of the earned interest to MEDRE token holders as a reward for their investment.  
  • Organically Grow the Reserve: Utilize the earned interest to contribute to the growth of the stablecoin reserve, ensuring it maintains the required 10% ratio as the value of the real estate portfolio expands. This reinforces the stability and security of the MEDRE ecosystem.
  • Utilize realized interest to bolster acquisition funds: In addition to growing the stablecoin reserve, the earned interest can also be strategically allocated to the acquisition funds, facilitating the purchase of new properties and further expanding the MEDRE real estate portfolio.
  • Building an Insurance Reserve Fund: Allocate a portion of the earned interest to build a dedicated insurance reserve fund. This fund can be used to cover potential losses or damages to properties, reducing the reliance on external insurance policies and potentially lowering insurance premiums, which can be very high depending on the location, size of property, specific hazards, and the type of coverage required.

In summary, the potential uses of the interest accumulated from lending and/or staking activities offer a range of strategic options for MEDRE.  These options, while promising, require careful auditing to ensure their feasibility and alignment with the project’s goals and regulatory requirements.  The reserve itself remains dedicated to safeguarding the token price and ensuring compliance with MiCA’s liquidity requirements, demonstrating MEDRE’s commitment to building a sustainable and resilient platform for tokenized real estate investment.

4. Benefits for MEDRE Token Holders

• Peace of Mind: The reserve provides token holders with peace of mind knowing that their investment is backed by a significant amount of stablecoins.
• Increased Confidence: The reserve enhances confidence in the stability and liquidity of the MEDRE token.
• Alignment of Interests: By maintaining a robust reserve, we demonstrate our commitment to the long-term success of the project and the interests of our token holders.

The MEDRE reserve is a key pillar of our commitment to providing a secure and reliable investment platform. We believe that this transparent and robust reserve policy contributes to the overall stability and attractiveness of the MEDRE token.