[Closed] Wind down 95/5 MTA/mUSD EARN pool

Summary:

To wind down 95/5 MTA/mUSD EARN pool - which was used as a proxy to staking.

Abstract:

Staking V1 was announced on September 25 which provides a way for Meta holders to stake their MTA and earn both governance and earning power.

EARN pools are a key source of secondary market liquidity for mUSD and MTA where they help to facilitate trades outside of mStable especially for small transaction values where it might be cost-prohibitive. It is important for us to keep and incentivize this secondary market liquidity.

Balancer Pool Liquidity/Volumes:

Current yields:

Both 50/50 pools (i.e. WETH/mUSD and USDC/mUSD) are important sources of Balancer liquidity as seen from their trade volumes. One proposal would be to shift the rewards from the 95/5 MTA/mUSD pool into these pools with higher utility. For a start, 5K to each of these pools over two weeks until it’s fully winded down.

The other alternative is to simply not reassign these rewards to reduce sell pressure on MTA now that staking is live.

Would appreciate all thoughts, discussions and opinions - would put this through Snapshot for Meta holders to vote, hopefully, before next week’s EARN pools are funded.

Motivation:

As above, MTA staking is now live.

  • Remove 95/5 MTA/mUSD and move rewards to mUSD/USDC and mUSD/WETH
  • Remove 95/5 MTA/mUSD and not reassign rewards
  • Remove 95/5 MTA/mUSD and move rewards to staking
  • Abstain

0 voters

2 Likes

My 2 cents :parrot:

With staking V1 now live, we can refocus our EARN pools on bolstering liquidity and utility for mStable assets. The USDC and WETH 50/50 pools are both very important for this function, and since the USDC pool is only getting 10k MTA per week, the value of extra rewards to it I feel would go a long way. Rewards have been quite fragmented up till now.

Separately from a token emission perspective, I’m comfortable with us maintaining a level of 100k MTA as weekly emission to EARN pools. These EARN pools have created a strong base of support and deep liquidity for mUSD and MTA, and I see little being gained from reducing the total amount being emitted at this stage. The whole point of these rewards programs is to get a fair distribution of tokens across community members for governance, and constraining this amount by not reassigning rewards I feel works against this priority of distributing the token to as many future governors today as possible.

My vote is to remove the 95/5 pool down over a few weeks, and redistribute it evenly to the other 2 pools.

1 Like

I agree that we should wind down the 95/5 pool over the next few weeks, and redistribute it evenly to the other 2 pools. But I also think that we should consider redistributing some of the rewards towards staking. Recollateralizing the MTA basket (which will come in V2) will be vital for the healthy future growth and development of the protocol and so I believe it is vital that we incentivize community members as much as possible to help participate in growing and securing the network.

Thanks for laying this out @derc!

The 95/5 MTA/mUSD balancer pool serves as an option for bullish MTA holders to participate in liquidity mining rewards. This pool has the added benefit of supplying MTA liquidity to balancer. As v1 staking is now live, however, those bullish MTA holders can stake to receive rewards rather than provide liquidity. The 95/5 MTA/mUSD balancer pool has shrunk accordingly and no longer provides as much MTA liquidity to the balancer platform. It probably makes sense to end liquidity mining rewards to this EARN pool.

It might be best to reduce rewards to the 95/5 MTA/mUSD EARN pool slowly. A 5K MTA/week reduction for the next 4 weeks allows time for current liquidity providers to make appropriate changes. The community can decide to which pool the 5K MTA should be allocated each week. It seems the 50/50 USDC/mUSD balancer pool is a strong candidate for additional MTA rewards to reinforce a path for users to obtain mUSD without undergoing the gas intesive minting process and also perhaps increase the demand for mUSD.

1 Like

I had always wondered why the mUSD/USDC and even a (hypothetical) mUSD/USDT pool wasn’t viewed as the most important pool. It maintains the peg and provides deep liquidity for mUSD.

That being said, I don’t know how to vote because this fees like it’s too late. MTA holders are going to vote in what is in the best financial of themselves without respect to what’s best for the project to be a success. I think too much emphasis has been put on valuing the governance token early on and I don’t know how we come back from that.

Focus for mStable or any project should be on acquisition of users, actual swaps performed generating a fee, and other “paying customers” along the way.

3 Likes

I agree a gradual winding down of the pool, a 5k MTA weekly transfer from it to wherever it gets allocated (assuming it goes to other pools or staking) is a good way forward here. I state this explicitly here since the proposals above don’t specify the cadence with which these rewards would be reallocated from the 95/5 pool.

I agree, there’s no choice where to move the MTA and how much. The two most used Balancer pools have the least amount of MTA rewards. I would prefer a vote to see which of the existing pools would get the 20K rewards and how much each of those pools should get.

I think some credence will need to be given to a split – some to staking, some to other Earn pools. The final makeup of that split is important, but I feel like the signal we’re getting right now is that directing these MTA in only one direction is not the best way forward.

1 Like

Just my 2 cents as a moderately sized LP currently for the 95/5 MTA/mUSD pool.

I am in favor of winding down the rewards for the pool over a 4 week period and reassigning the 20k MTA. My suggestion would be to add 5k to the 50/50 wETH/mUSD Balancer pool, 10k to the 50/50 USDC/mUSD pool and 5k to the staking rewards pool over a 4 week wind down period.

My reasoning behind all of this is 1. This pool was meant to serve as a stop gap until staking was released and since that is now available + the volume on the pool was already abysmally low, I see no reason to keep it around. 2. The USDC/mUSD pool serves as vital liquidity for mUSD and boosting the rewards a bit would help ensure ample liquidity as we grow along with the wETH/mUSD pool. 3. The staking rewards APY are starting to drop significantly as more people stake and since people are locking tokens for a long period of time we should ensure that the rewards for doing so stay in line with being an LP and push more people to lockup and stake which is all around good for the protocol.

2 Likes

If team is not planning to shift 100% of MTA/mUSD pool into staking then I would
suggest doing 15k into staking and 5k into wETH/mUSD pool.

Why should we encourage using Balancer to swap between Stablecoin <> mUSD,
when folks can come and mint them inside the application?

How about just deposit in the MOONBASE w/ BASED? They are an extremely good community to have on our side and perhaps knock the VC stigma w/ which META has been branded.

It might be best to create proposals that offer more simple decisions for mStable governance. A proposal that combines two decisions that might otherwise be separate (deprecate 95/5 MTA/mUSD EARN pool MTA rewards & reallocate MTA rewards to other EARN pools or v1 staking) may be more confusing and cause a loss of signal.

What if we have a voting structure that makes these decisions more distinct?

  • Vote 1: Wind down the 95/5 MTA/mUSD EARN pool 5K MTA each week for 4 weeks? Yes/No
  • Vote 2-5 (weekly): To which pool should we allocate 5K MTA this week? List all options
5 Likes

Awesome suggestion @chuckle17.

We should probably do that.

In the current mStable situation, i think it is of paramount importance that mstable should be adopted into yearn’s strategy.
Check out the discussion below.

I think what is needed on this issue is that when Yearn’s vast assets are accepted, they should be adjusted to achieve “maximum efficiency at the minimum necessary compared to other strategies”.
To that end, I’m in favor of weekly adjustments.
(Too many rewards are also a waste of Token.)

In addition, I believe that the rewards for those who have locked up for a year are down and should be compensated to some extent.

yearn could easily 3-4x it (currently 7 million), which would drastically reduce the APR from the MTA.
I was also concerned about this, good point. the BAL rewards wouldn’t change much, but the MTA definitely would.

Voting in Progress

Proposal 1: Should the 95/5 MTA/mUSD EARN pool be retired? #QmP1DYY

Proposal 2: Over what timeframe should the 95/5 MTA/mUSD EARN pool be retired? #QmdQuo2

Proposal 3: Where should the MTA rewards from the 95/5 MTA/mUSD EARN pool be allocated? #QmaiFjP

Vote closes Oct 11, 2020

1 Like

The vote closed with the following outcomes:

  • 67 members of the community participated in the vote.
  • 96.2% of the voting power voted Yes in favour of the proposal to retire the 95/5 MTA/mUSD EARN pool

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  • 63 members of the community participated in the second vote
  • 75.3% of the voting power voted to wind down the pool Immediately

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  • 72 members of the community participated in the third vote on where the rewards should go
  • 63.55% of the voting power voted to redirect the 20K MTA rewards to MTA Staking

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We will be sharing further communications shortly.

3 Likes