Capital Efficiency in mStable

There are several mStable contracts that could deploy deposited capital more efficiently.

  • MTA Staking: there is over 7 million MTA tokens (more than 1/3 of circulating supply) that could be deployed on, for example, a Balancer in an 80/20 MTA/ETH pool. Stakers would additionally earn trading fees and BAL, while creating a very deep MTA market.

  • mUSD Save: over 25 million mUSD in Save that could be deployed in the mUSD/3Pool Meta Pool on Curve earning CRV and trading fees for savers, which would be additional to income earned from the mUSD bAsset interest and swap fees. Deploying a meta-stablecoin to earn additional yield in this way is something only mStable can do as a meta-asset protocol. Another option for yield would be the mUSD yVault.

  • wBTC bAsset on COMP: the WBTC in mBTC’s contracts could be deployed on Compound to earn some base-line and safe lending income for imBTC holders.

  • mBTC Save on Cream - Cream Ironbank could be a venue where mBTC Save could allocate a portion of mBTC to either earn a baseline yield or use as collateral to leverage some kind of other yield through a market neutral strategy.

  • fPool mBTC in CREAM or other - same as above but with fPool mBTC. fPools are a standard LP structure so the users may be more open to higher yielding, more risk strategies like leverage here, when compared with users in Save.

  • fPool mUSD in CREAM (on Ironbank currently) /AAVE (team currently working on getting it added)

  • collab with utilising mBTC on Badger

Not only would deploying these assets in ways like this increase the yield for all users, re-using the mAssets in both fAsset pools and Save (CREAM, AAVE, yVaults) is very powerful as it would unlock the supply and support deeply liquid markets for mAssets and enable users to borrow, use, trade, leverage, etc, significantly increasing mAsset utility.

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I like all the ideas included in your proposal excluding only the first one related to MTA staking.

I understand that deploying the staked MTA in a pool would earn stakers additional fees and enhance liquidity, but it would also increase MTA circulating supply.

I think there is a more substantial value accrual for MTA stakers in the token value increase due to low supply on the market with an increased demand.

I’d be glad to hear your thoughts on that.

Capital Efficiency is always good to pursue.

  • I like the idea of using the MTA to deepen the MTA/ETH pair. That goes particularly well with the recent change to reduce the liquidity mining for the MTA/ETH Uniswap pool (unfortunately). One thing to caution is the impermanent loss.

  • mUSD in Curve is a great idea, I wonder if mStable wants to position itself as a curve competitor. If yes then adding liquidity to curve would weaken mStable’s position. We do want users to swap these assets that are in the 3Pool on mStable rather than curve, right?

  • wBTC on Comp: great!

  • mBTC, fPool on Cream: Cream is a pretty good project, however, there was an issue with the iron bank in the past. I know it was not Creams fault and I don’t want to say that I think it is risky, but the community might not have the same trust in Cream as compared to Aave or Compound. Would be interested to gauge what the community says.

  • Badger collab would be interesting. Currently, I don’t think there is a vault that fits the requirements. But some new Product would be somewhat interesting.

MTA tokens (more than 1/3 of circulating supply) that could be deployed on, for example, a Balancer in an 80/20 MTA/ETH pool

it would also increase MTA circulating supply

How do you mean? Because each BPT is only 80% MTA, so it would reduce the total MTA units locked up by 20%?

I think the pros of the ~30% APY from BAL + ~10% APY from trading fees + deeply liquid market which could help us massively reduce emission, outweigh the cons of the IL and less locked up. At the very least, we could follows AAVE’s lead and offer both staking options: MTA or 80/20 BPT.

mUSD Save: over 25 million mUSD in Save that could be deployed in the mUSD/3Pool Meta Pool on Curve

I support this - this creates a deeply liquid market on a different platform and also generates yield for savers. At least, 25% of the SAVE collateral can be assigned to this to keep the risk profile to a minimum.

I wonder if mStable wants to position itself as a curve competitor

No, I don’t believe we do. While we both now offer low slippage swaps on assets and do naturally compete there, I think we should respect Curves determined focus on providing the most efficient swap markets and re-focus our attention on making mAssets as attractive as possible for users. This includes fostering relationships with high volume markets wherever possible.

wBTC bAsset on COMP

No brainer - lets get it in. Even though the APY is ~1.3% for wBTC, it’s better than nothing.

mBTC Save on Cream

As above with mUSD SAVE, i think that creating a deep lending market here can only be a good thing. Personally I would opt for a low risk strategy and leave the leveraging up to protocols like ALPHA.

fPool mBTC in higher risk strategy

Would be keen to foster a relationship with ALPHA finance who could potentially create one at our request and we could simply deposit there, instead of having to manage that ourselves… could be mutually beneficial @james.simpson

fPool mUSD in CREAM (on Ironbank currently) /AAVE

Currently waiting for AAVE to move forward with their processes. Should that fall through, i’m in support of using CREAM, although would much prefer the network effects of AAVE and believe we have strong synergies there.

collab with utilising mBTC on Badger

I think this is a big one. The team from DFD working on ibBTC are open for collaboration, and suggested either they could use mBTC SAVE as a peak for ibBTC (although, this is external to us so not concerned here) or we could deposit some of our assets as collateral there. The only thing that is concerning is the IL of depositing assets there. We could certainly deposit fPool bAssets or mBTC bAssets there to earn yield, but if one of our deposits goes up in price, we may not be able to withdraw the full amount. Possibly we could keep a 1-2% buffer to avoid such a scenario, however it’s complex to think through and I dont have a specific map for that one.

Not only would deploying these assets in ways like this increase the yield for all users, re-using the mAssets in both fAsset pools and Save (CREAM, AAVE, yVaults) is very powerful as it would unlock the supply and support deeply liquid markets for mAssets and enable users to borrow, use, trade, leverage, etc, significantly increasing mAsset utility.

^ This is massive. We have ~$40m mUSD and ~$10m mBTC that can be deployed onto the market here, which would naturally open up a whole new layer of mAsset usage.

Great suggestions!

I agree on most points above, but specifically to the Balancer deployment, as I feel v2 will unlock super saiyan mode for MTA/WETH, and the Balancer team has been nothing but positive with protocol collaborations in the past:

I’m not sure if you guys have seen it, but here is a breakdown of the up and coming Balancer v2, and all the inherent benefits it brings with it.

Very notably would be a way to use the underlying deployed assets for further yield-farming strategies, that are all automated. If we could get MTA on any big platform, we would create an amazing opportunity for all Stakers to get additional yield on top of BAL rewards, trading fees, as well as our own rewards, on top of extremely gas-efficient trades to enter our MTA ecosystem.

I’m not sure if you’ve seen it, but Balancer currently also reimburses direct trades on their platform in native BAL as well, so the inherent partnership opportunity to cooperate with the team to deploy here to get people to trade MTA directly on Balancer would be big I think.

Finally, we’re currently on cap3 (10M) with BAL rewards, but if we deployed our MTA there, we could ask to put us into cap4 (30M), and thus gain additional BAL rewards for all stakers and MTA pools (including our Buyback & Make pool).

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I like the sound of a lot of this.

I agree in that I think Aave is definitely the place to integrate, if possible.

I really do think mBTC on Badger would be a big deal for Mstable. I appreciate it sounds complex but if we could make it happen I’d strongly support it.

One question I think we should keep asking ourselves with new proposals is how will this incentivise investment into MTA…

Would somebody be able to explain how incentivising pools on third party websites, e.g. Curve, is going to be good news for MTA holders?

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Hi,

I’m in favor of the different proposals, increasing capital efficiency, but also the composability and exposure of the protocol.

However, i have some concerns about deploying capital on Cream as they had their fair share of security issues. I mean what’s the point of having Massets, which reduce risk exposure to one asset, if the Cream protocol gets hacked ? There must be some serious guarantees in order to align with the high security standards of Mstable.

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