[Closed] MIP-5 Tokenise mUSD SAVE, enhance capital efficiency and add deposit box

Simple Summary

mStable’s SAVE remains one of the most accessible, reliable and high-yielding products in DeFi. Elements of it’s design however limit the ability for it to be integrated across the broader DeFi ecosystem.

This MIP proposes that it be reconfigured to enhance the capital efficiency it offers to SAVE depositors and enable it to more easily be integrated into other DeFi, and CeFi, platforms. Additionally, under-utilised capital stored in SAVE can be put to work to contribute additionally to yield.

Abstract

We propose adding composability to mStable’s SAVE product to enhance its functionality, improve the potential capital efficiency for depositors in SAVE and increase SAVE’s potential integration across the DeFi ecosystem.

This proposal comes in 3 main parts:

  1. Tokenising the “Savings Credit”, creating a imUSD token that represents the yield accruing mUSD and can be transferred and used as collateral in DeFi

    • Core behaviour will be optimised in terms of gas usage
    • Initial ratio 10:1 imUSD:mUSD
  2. Enhancing capital efficiency by depositing X% of SAVE deposits elsewhere in the DeFi ecosystem (initially yEarn mUSD vault)

  3. Providing a imUSD deposit box, a place where long term savers can store their imUSD and earn MTA

    • This is aimed at supporting the migration of funds, and ensuring that recipients of system yield have a say in how it is distributed
    • To ensure long term alignment, earnings will be heavily boosted for MTA stakers, and lockups will apply

Links

MIP-5
Forum discussion

6 Likes

1/ good idea.
2/ i wonder what happens to the mUSD deposited into SAVE. i assume sent to curve or balancer pools in EARN?
3/ good idea too. stake ymUSD in EARN’s new mStable SAVE pool XD.

I love these 3 ideas. You will get my vote !

1 Like

2/ As I understand it, yEarn plan to launch a ymUSD vault in the coming days that will deposit into the mUSD Meta Pool on Curve, harvesting the yield there. In the future, having more native connectors may make sense (for example having mUSD listed on a lending paltform)
3/ This will be much different to existing pools, given that it has incentives for long term alignment through a boost and lockup

3 Likes

#1 - both thumbs up to this. Curious, why a ratio of 10:1? do you mean that for every 1 mUSD locked, 10 imUSD will be issued? 1:1 makes more sense.

Can you help expand/correct my understanding of the imUSD token. Currently, I understand that every token represents 1 mUSD locked and the associated interest with that locked token. Is this correct? If it is then we will need a way to show the true value of imUSD in terms of interest accrued. This also means that imUSD won’t have a universal value as it represents varying amounts of interest accrued.

#2 - yes, but this also increases risk and that must be accounted for. Does this also need to go through governance in terms of what % and where it is invested?

#3 - I don’t really understand the reason for imUSD holders being rewarded. #1 takes care of composability. #2 increases yield/returns

@regencrypto thanks for asking!

#1 - Having the yield accruing token start at $1 is a standard for LP tokens (Curve, yEarn) but a rationale for having it start at 10:1 (or $0.10 per imUSD) is that it would logically detract less from mUSDs value proposition as a stablecoin, much like cDAI or cUSDC. The imUSD will have a universal value, each imUSD will be exchangable for a given amount of mUSD based on the current exchange rate, which should always go up (but slowly)… so it should be priced in on the secondary markets.

#2 - Yes it should go through governance pipeline for sure

#3 - The rationale is that recipients of system revenue should have some say in how that is directed. If there comes a time when governance decides to redirect some % of the system revenue to a ‘buy and make’ model or redistribute it to governors (like Curves admin fee), it would be unfair for the actors in save not to have been given an opportunity to earn tokens and have their say. That is my understanding of the rationale

1 Like

An example of how a lockup would work. 20% unlocked immediately and 80% unlocked after 6 months. Using the time for the first action t1, and the time of the second action t2, the 80% is streamed linearly from (t1 + 6 months) to (t2 + 6 months).

1 Like

This proposal and two components were all approved in December 2020:

  1. Make SAVE Composable
  2. Where does the MTA come from?
  3. Length of Lockup and Vesting Schedule

SAVE v2 should be launched in the near future.