[Discussion] Move a portion of platform fees into a treasury fund

Summary:

Proposed by community member @skrew, a portion of the platform fees should go into a treasury fund. This fund will only consist of mAssets (and not MTA) and will be used as the first liquidation in case of a stablecoin coming off peg.

Abstract:

Initially it won’t hedge much risk for stakers, but over time, it can grow and take a substantial amount of risk away from stakers as opposed to selling MTA which will also face price pressure downwards.

Assume that a basket coin consisting of 20% fails completely, now we know for a fact that every musd is at worst worth .80c, and every mBTC is worth market value. Instead of selling off a large portion of MTA to the market, first, you redeem the BTC, then you redeem the 80% collateral from mUSD and attempt to fix the peg, then you sell MTA.

Motivation:

See above

Pros:

  • Having a treasury consisting of non-MTA gives mUSD holders additional security

Cons:

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Really interesting idea. I like a lot about it.

Main reservation:

  • MTA is designed to have diversified value streams. Compare this to a token like MKR that has one asset from which it derives value, i.e. DAI. If DAI fails then there is some likelihood of MKR going into a negative spiral. However, once mStable has an ecosystem of assets (mUSD and mBTC for example), MTA’s value will be significantly more robust. If DAI in mUSD fails and MTA is required to recollateralise, a negative spiral is much less likely as MTA would still be deriving value from mBTC - an uncorrelated asset.

In my view it is better to push this perspective on MTA rather than take the approach of an insurance fund which implicitly projects an insecure view on the value of MTA.

Interested in your thoughts here.

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