Below is an update on the acquisition of mStable by dHEDGE, including:
Handover of assets
Product sunset plan
Launch on Optimism
MTA Redemption
Handover of assets
The teams have come together to begin the transition plan of assets, beginning with offchain infrastructure. mStable multisigs will now be transferred across to 3/5 dHEDGE contributor signers.
Product sunset plan
dHEDGE has instructed and is working with the mStable team to cut MTA emissions and sunset products that have limited traction.
mUSD / imUSD will remain operational and the teams will explore options for revitalization of mUSD with the community.
The sunset execution has begun, including the following:
mBTC (due to limited traction)
Cut emissions to Feeder Pools
3Pool Convex Meta vault (Meta vaults to be relaunched with more competitive yield)
Staking / governance (to be relaunched with a new MTA staking mechanism as per proposal)
Automated tasks that are no longer necessary
The above will mostly follow MIP 31 sunset approach.
Launch on Optimism
mStable will shift focus to Optimism:
Boost MTA liquidity (current trading liquidity is low)
Launch competitive yield products (target to aggregate to a Meta vault)
Enable MTA redemptions
MTA Redemption
MTA will remain and will become a part of a redesigned governance system to be more aligned with the underlying mStable protocol.
As per MIP 33, MTA holders will be able to swap their MTA for stablecoins at a fixed floor price.
This will be available as follows:
MTA will be swappable for stablecoins on the Optimism network. This will be live by the end of April 2023. As per the dHEDGE forum proposal, redemptions will remain open until no longer deemed relevant by a future MTA governance vote.
MTA holders will be able to redeem liquid stables for their MTA at the floor price
The floor price for MTA will be determined by: Value of mStable liquid treasury (in USDC) / MTA eligible supply using data from the Overview of MTA eligible supply and Treasury Value and liquidation sections
The treasury will be placed in a mStable Treasury vault on Optimism, a private dHEDGE vault. There it will earn safe yield on stables (likely on Velodrome).
MTA holders will be able to redeem the mStable Treasury vault tokens with their MTA at the floor price. This will be available on the mStable dapp. The treasury vault tokens can then be withdrawn into stables of the user’s choice (eg USDC) via the dHEDGE dapp.
The redemption contract will enable a simple swap of MTA to the mStable Treasury vault at the fixed floor price in USD. The mStable Treasury assets will be transparent and visible via the dHEDGE dapp.
The formula used to determine the Eligible Supply for Redemption is the following:
Max Total Supply - (MTA held in Emission Controller Contracts + Plain MTA held by Treasury + Invested MTA held by Treasury + MTA costs (after 15th March) + MTA to be returned to addresses controlled by TreasuryDAO + MTA to be returned to addresses controlled by BuilderSubDAO)
Using this formula, the Eligible Supply for Redemption number is 64,614,909 MTA. Details on the calculation can be found on the third tab of this spreadsheet
By acquiring mStable and leaving MTA freely tradable, dHEDGE is acquiring 9,247,891 plain MTA and 2,475,654 invested MTA. Following the calculation of 3., these MTA are not part of the eligible supply and will not be redeemed by dHEDGE against Treasury Assets.
Treasury Value and liquidation
Estimation of value redemption
At time of writing (March 30, 2023), the latest value of mStable Treasury Assets (excluding MTA) is $2,089,540. It is assumed that there will be a funding surplus returned from subDAOs and ongoing costs to the TreasuryDAO between now and the end of April.
Hence, the Total Estimated Redemption Value is estimated to be close to $1,939,540.00. This total value will be divided by the total eligible supply of MTA to give a per $ value redeemable per MTA hold we’ll call floor price
Nature of redemption
All mStable Treasury DAO Assets would be liquidated for USDC by the dHEDGE team in the coming days after the publication of this post after the multisig handover from the mStable team
After the conversion of the Treasury DAO Assets to USDC, they will be transferred to a redemption contract designed by the dHEDGE team on Optimism
A quick note on this - the link here could be misleading as it shows all MTA in Sablier contracts. Not all of these token fall into this ineligible category (some early advisor and investor are fully vested and delivery will continue, and some tokens here will represent delivered but unclaimed MTA). The 1,107,000 shown in the table reflects the estimated total to be returned from unvested streams.
Also a quick question on point 3: “Notes on dHEDGE holdings of MTA”, the ~21m MTA from the Emission Controller and the ~1.7m to be returned from the Builder subDAO and Sablier streams would be treated in the same way, correct? So in total dHEDGE will hold ~35.4m MTA which will not be redeemed against Treasury Assets?
