[Discussion] Incentivise imUSD/MTA pool on Uniswap/Sushiswap

Summary:

Seed initial imUSD liquidity on DEXes with 10K weekly MTA rewards for 4 weeks then 5K weekly rewards thereafter (can decide actual amount later)

Abstract:

Hi guys, we have currently a couple of liquidity pools that qualify for EARN rewards. Since the purpose of LPs are to incentivize and bootstrap liquidity of mAssets, we have a couple of useful pools since.

Curve for stablecoins <> mUSD
Uniswap for MTA <> ETH
Balancer for mUSD <> ETH

We are also winding down the USDC/mUSD 50/50 pool as stablecoin routing can be served by Curve. Rewards are in the process of going to SAVE v2 which incentivizes mUSD > imUSD.

Now, it’s time to consider a liquid market for imUSD, or interest-accruing mUSD, which I’ll propose to seed with an initial 10K weekly MTA rewards, perhaps as a limited 4-week imUSD liquidity mining promotion, then lower to 5K weekly rewards thereafter.

My initial thoughts are ETH <> imUSD on Uniswap/Sushiswap for

  • MTA <> imUSD routing via MTA<>ETH<>imUSD - allows MTA rewards to be reinvested into SAVE
  • Allow imUSD <> MTA routing for governance participation.

Motivation:

  • Seed DEX liquidity and yield farming for imUSD
  • Allow MTA<>imUSD easy routing

Any thoughts? Poll below for signalling please. Opinions mine.

Should we incentivize imUSD DEX liquidity?
  • Yes, with 10K MTA weekly
  • Yes, with 5K MTA weekly
  • Yes, Others
  • No

0 voters

Hey!

A couple of questions that come to my mind:

  • Don’t you think that it will cannibalize the imUSD vault that has just been rolled out to production?
  • Don’t you think that it should actually be done by yield farming Partners, like ARCX did?

Overall, it seems to me that imUSD is an awesome tool to allow any other external project to use the yield bearing mUSD token. I think that mStable should mainly focus on incentivizing mUSD/ETH pools on sushiswap/uniswap, which is already the case, but maybe not enough?

1 Like

Cool suggestion, and makes a lot of sense to me moving forward with this. Definitely in favor of getting imUSD further out into the wild, to spread more liquidity amongst the mAssets ecosystem, and the wider crypto world.

A few thoughts as I was reading through this:

If we’re going to incentivize the liquidity of our interest bearing version of our stablecoin, we should start calculating how much cheaper or more expensive it is right now for different size trades to simply go to our page and mint the coin themselves, and at what point it is better or worse to go through an AMM instead. We should see how much of this difference would get subsidized by us in form of MTA, and then make an informed decision of this being a worthwhile step forward.

I think if people start trading imUSD, the first issue they’re gonna run into is the denomination of it, and this could potentially confuse new buyers on the AMM. If I want to trade 100 MTA for imUSD, I need to know the current ratio of imUSD, as otherwise the numbers will make no sense to me.

If someone mints them on our page instead, they’ll get a preview of numbers and will see how this number gets created in the first place.

I’m very curious though as to how an integration with the Compound pool on Curve could look like, and if this is even technically possible. I can trade between cDAI and cUSDC there, so wouldn’t it be possible to trade imUSD against the Compound pool or will this be impossible due to the flexible nature of the interest generated?

If it were possible, then not only would we give an easy entry into imUSD outside of our page, but we would also neatly find a bridge between any stable cAsset and our own imAsset. But maybe that’s just crazy, simply throwing ideas out :wink:

I think the reward amount seems fair though, and I love the gradual decline after 3 to 4 weeks, with the option to vote on a different number after we’ve seen the impact at the end of the initial period, while perhaps guaranteeing a minimum met, so LP can feel confident in further incentivization at a minimum rate for x weeks.